Mobile Gambling Use Explodes: 94% Growth Last Year
betab.ly
betab.ly
100% growth of mobile apps overall doesn't constitute 100% increased mobile app usage, it just means more downloads. This is usage, meaning how much people are engaging with the app.
Even so, given that mobile gambling is in its infancy and that serious marketing dollars have not been put behind it to the same extent that it has been put behind the app industry as a whole. We expect mobile gambling to increase dramatically as things ramp up.
They did get it right, though... the gambling model is FAR more profitable than any other gaming revenue model out there. The question (I guess) is whether their dev market understands what they're actually offering and how hard it is to achieve. My feeling is that the UK has made acquiring a gaming license so effortless, and game developers are so locked into the current in-world rev and/or app-based models, that no one's paying much attention to this. There have been a few stand-out articles on the subject, like this one from Bruce Everiss, a probable basis for their service: http://www.bruceongames.com/2011/01/28/gambling-as-a-video-g... but basically it's been ignored. And will continue to be ignored as long as the market becomes more fractured, and the largest segments outlaw anything of the kind, and Silicon Valley continues to treat gambling as a toxic form of revenue.
Nonetheless, I think there are serious issues with Betable's business model, not the least of which is that they have no way to certify what the games tying into their API are actually DOING, or whether they're fair. That lack of auditing in itself seems to pretty much explode any reason to acquire a legal license in the first place. What's the license actually get you, then, if not auditing and regulation? An ability to take payments for gambling? How is it legal, if it's not audited? How do they guarantee on behalf of the government that the sites they're putting under their license are running fair and legitimate games?
Again, this is basically a license in search of a new kind of casino. But why wouldn't a new kind of casino, or gaming site utilizing that model, just take Bitcoin or Linden dollars? Why bother with all this licensing at all, especially if it's just window dressing?
THIS IS COMPLETELY WRONG. There are at least 15 green countries on that map where gambling's either completely illegal, or else under so much regulation that their license would certainly not stand up in court. What they're trying to do is insane, stupid, and basically abusing the naivete of your average iphone developer. I pity the idiot that's their first guinea pig.
edit. Thinking about it more, the first guinea pig is probably going to be some poor guy who ends up getting arrested the next time he's in Russia (green on the map). I think the revocation of Betable's gaming license is going to be the least of their problems when that happens...
And no, we are not preying on anyone, developer or otherwise. We assume all legal responsibility and risk for the gambling aspect of any game, meaning any developer that works with us has no risk of legal action. We handle all aspects related to gambling. A developer from anywhere in the world, including the US, has no risk of getting arrested anywhere.
First off, you are right on our high level concept. "A license in search of a casino" is an interesting way of putting it. The key value that we offer to gaming companies is the ability to leverage our gambling license.
However, you severely underestimate the difficulty of acquiring a UK Gambling Commission license. In order to get the licenses that we now hold, it took us over 18 months and $1.5 MILLION. This does not include the corporate structuring and other things that were extremely difficult to navigate through as a first-time applicant. These time & money costs are simply too great for the vast majority of small & medium sized game studios, and the compliance issues get increasingly prohibitive as you get into larger studios and finally AAA gaming corporations.
Interestingly, we were initially concerned with gaming industry's opinion on gambling like you mentioned, but we have found that that perception is not the case at all. The vast majority of responses are positive and the majority of markets that games work in are open to gambling games.
As for ensuring fair & legal applications of our API, we go through every game before it goes live with our platform and make sure that it is administered in an appropriate way. Our goal is to grow the entire social gaming + gambling ecosystem (or "social gambling games" as we like to call them), and unfair or predatory practices only damage the ecosystem as a whole. We take this very seriously and already have systems in place that let users set their own limits on deposits & losses, as well as a gambling addiction hotline.
What our service provides is the ability for game developers to incorporate real-money play into their games, including cash-out. We are audited by the UK Gambling Commission annually and we handle all gambling aspects of the games we partner with, so we essentially deal with all of the legal & financial issues. Game makers can simply plug in our API and have access to a very engaging form of monetization without overcoming the massive initial hurdles and dealing with the ongoing compliance issues. We think this is a pretty compelling value proposition for game developers.
I do think $1.5M was a bit expensive for the license. Your T&C state: "the “Game Rules” (which are different for each Game), which explain the specific rules of the Game and are available on our Game Rules page [Note to the Gambling Commission: we propose to do this in a similar way to other operators, see for example http://casino.ladbrokes.com/en/live- dealer/help and http://www.partycasino.com/games/more-games/. The games (and, therefore, the rules) have not yet been finalised, but in drafting the rules we will comply with the “Fair and open” provisions of the Licence Conditions and Codes of Practice];"
This sounds like a pretty pricey pay-to-play for rules that aren't yet finalized (i.e. the assumption being that zero games are yet licensed on your platform). You could have done the same thing in Curacao for about $60k, or Malta for around $250k.
The question of whether there's an ecosystem like what you're describing, or whether that's something that can be astroturfed, is open, but depends on regs outside the EU and to a large extent individual jurisdictions' willingness to play ball, and the ability to move money rapidly through local payment options.
This still leaves open the question of what happens to a guy in Russia who's making money by hosting a game that's monetized through your site, with other Russian players betting on it. While the UK might have no problem with that, the Russian / Chinese / Vietnamese / Australian / Japanese / Norwegian / French / Italian / Greek / Israeli (and lots more) governments certainly do have problems with any casino that's not specifically licensed and regulated separately under their own jurisdictions. So a local developer in those markets may not be violating UK law or WTO regulations, but could still be in deep trouble with their own local law enforcement. If Her Majesty's MI6 is going to spring rebel iphone devs out of a Tajik prison for that $1.5M, then it was well worth it =)
As with all things online-gambling, there's a murkiness in the system, because one country's laws state that doing X is legal in another country, and that this license permits it. Likewise, a Costa Rican data processing company is fully within its legal rights to run gambling in the United States, as far as Costa Rican law is concerned. We know how that usually works out.
I think -- and I'm not trying to be harsh, because there may well be a market for this (although the HN crowd probably isn't hip to how or why exactly, and you'd do better on a gambling forum) -- but essentially you've prepaid for prestige by the truck-load and are hoping a market exists to rent a piece of it. It'll be interesting to see if it works. I think it's hard for any company to justify the price of a UK license w/o a huge volume in sportsbetting already coming through the door. What you're potentially tapping into here is an unknown quantity, and everything (legally) is in flux right now around the world, so it's an interesting time to try it.
I wish you the best, and apologize for coming off as rude. I've got my doubts, but look forward to seeing your progress.
So you know, we got the gold standard license is because we wanted to have the gold standard and face as little legal/regulatory issues down the road as possible. Our goal is to build a reputable, legal business that operates everywhere that gambling is legal. We have international payment providers and again, assume full responsibility for gambling, so developers have nothing to worry about, regardless of where their game is hosted and where their players are. We specifically cite that this is legal for US developers because gambling is 100% illegal in the US, so this is proof that use of our API does not violate local law.
That said, the legal issues surrounding this are definitely the primary concern among developers. We've been thinking of good ways to communicate this (other than company lawyers of the developing firm, which have given their employer the all clear every time thus far). We hope that this will be alleviated to some extent as the first games built on our platform go live.
We do have partners already building on our platform, such as Lucky Derby by Toy Studio. See here for more info: http://www.toystudio.com/2011/08/04/lucky-derby-coming-soon/
Thanks again for a great conversation, and definitely ping us here or via email with any more questions (I'm tyler@betable.com)
I'm having trouble parsing that.