Casino Social Gaming Ringing Up Big Business on Facebook

Facebook games are often compared to gambling because of their addictive qualities — both get consumers to spend a few more dollars to continue playing.

So what happens if you cut directly to the chase and build true casino games like slots, poker or bingo?

It turns out that rings up a pretty healthy business, too. The best part is that because of U.S. gambling laws, game players don’t ever get to cash out their winnings.

In other words, the house always wins.

In July, Sean Ryan, the director of game partnerships at Facebook, said the casino category is creating “unbelievable monsters,” and is still largely untapped by developers. “It turns out that people are completely okay winning virtual currency that they can never cash out,” he said.

But the category giant is no longer sleeping.

Earlier this year, Playtika, the developer behind popular Slotomania, was acquired by Caesars Entertainment Corp. for $80 million, and others are scrambling to keep up.

Today, Berlin-based Crowdpark has announced that it has raised $6 million in capital to help fuel its concept of social betting, where people can bet with friends on everything from who will win a football game to whether Angelina Jolie and Brad Pitt are getting married.

“This is just an entertainment product. You pay with Facebook Credits, so the players do know they don’t get any money back,” said Crowdpark’s co-founder and Chief Product Officer Ingo Hinterding. “It’s 100 percent legal.”

And there are many other players in the space, too.

Arguably, the first to establish the category was industry leader Zynga. In 2007, it launched Texas HoldEm Poker, a game that continues to attract close to 6.4 million users a day and is one of the company’s Top 3 revenue-generating titles. Two weeks ago, Zynga said it was expanding its casino games with an upcoming launch of Bingo.

Meanwhile, a number of lesser-known companies are literally hearing bells and whistles going off.

Seattle-based DoubleDown Casino, which has slots, video poker, blackjack and roulette in the same app, today launched a new game called Photo Booth Friends.

It falls under the “slots” category, which means you click to replicate the effect of pulling down the handle to see the reels spin on the screen. Photo Booth Friends lets you customize the reels with photos of your friends.

DoubleDown recently celebrated achieving one million daily active users, and has eclipsed other popular games like Zynga’s Mafia Wars, based on monthly active users.

Ryan name-dropped DoubleDown as one of the unbelievable monsters, and according to sources familiar with the company’s financials, we hear the game is now generating $140,000 a day in revenue. For reasons of competition reasons, the company declined to comment.

Others exploring the casino category include RealNetwork’s GameHouse and Electronic Arts through its recent acquisition of PopCap Games.

Here’s an infographic from Crowdpark, breaking down the social betting opportunity on Facebook:

Casino photo credit: FreeRishad.


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