If you said “gambling,” then nope. Or not yet, anyway. If you said “betting,” it’s probably just because you read the headline, but yes, good job! And if those two answers sound totally interchangeable to you, read on.

Zynga recently began to test the waters in the U.K., but real-money online gambling (that is, betting on games of chance like slots or bingo) is still outlawed in 47 states, and only operating in one, Nevada. In the U.S., though, players can legally bet cash on “games of skill” in 36 states; the appropriately named startup Skillz is now trying to make something out of that legal distinction on Android.

Gamers are familiar with betting virtual (fake) currency on games, said Skillz CEO Andrew Paradise — think Zynga Poker, which sells virtual poker chips in packs that can cost between 99 cents and $99.99. Skillz’s SDK, which launched in open beta late last month, cuts out the middleman: After a developer’s game has been reviewed and approved by Skillz, the company flips a switch that lets players directly bet on their ability to beat another human in a multiplayer game.

In other words, both players pay an entry fee, a cut of which gets split 50-50 between Skillz and the game developer. Then, one player finishes the game with a profit, and the cycle can restart.

Skillz spokesperson Molly Gerth said engagement and user retention for Skillz-enabled games has increased since the SDK launch, in one case by 110 minutes of additional gameplay per user in the two weeks with Skillz vs. the two weeks prior. Another game saw its total revenue triple in a little over a week, Gerth said.

Paradise made sure to say, though, that Skillz can complement rather than replace existing business models: Players can be served ads regardless of whether they bet with real money or virtual money, which is why those engagement numbers matter. He also proposed that the entry fee for a real-money game could be bundled with power-up items that would otherwise be bought in an in-app store as a sort of cheap sample (that is, rather than a free one).

Most of the people who play Skillz-enabled games currently do so with virtual currency, he said.

Skillz has to review the games that want to fully use its SDK because, in those states that allow betting on them, “games of skill” have to fairly allow players to improve over time with practice. “Skilled” players must be able to beat “unskilled” players in at least three out of every four games, Paradise said.

This is interesting because many popular multiplayer mobile games are already games of skill, or close enough to the legal definition that they could be tweaked to be in the clear. However, for the time being, Skillz’s baby beta is only available on 10 Android games, including one it publishes called 3D Cave Runner.

And why Android? Paradise said it’s because iOS has historically monetized far better than Android, even though the latter has a much larger user base. It’s not a gamble, though; he quickly added that he’s “excited about working with Apple in the future.”

“This was a critical decision, and one that I did not make lightly,” Mr. Christie said Tuesday in a statement. “But with the proper regulatory framework and safeguards that I insisted on including in the bill, I am confident that we are offering a responsible yet exciting option that will make Atlantic City more competitive while also bringing financial benefits to New Jersey as a whole.”

Read the rest of this post on the original site »

On Tuesday, Zynga appeased investors by beating its already lowered expectations for the period and exceeding analysts’ expectations.

It also showed critical progress on mobile, where one-quarter of the company’s monthly active users are now playing its games — that’s 72 million people out of 298 million monthly average users in total, making for a very large market across both Facebook and smartphones.

Just yesterday, there was some additional good news for the struggling games company.

New Jersey Governor Chris Christie gave conditional support to in-state Internet gambling, a market that will benefit Zynga as it looks for potential new revenue sources.

To date, most of Zynga’s real-money gaming efforts have been focused in the U.K., where online gambling has been legal for a while. Zynga confirmed on Tuesday that it still plans to launch games there during the first half of the year. Additionally, it said its real-money games would also be available on Facebook in the U.K., where the social network has only conducted a few minor tests to date.

Zynga’s stock soared 11 percent today, or 34 cents, to $3.43 a share. The stock has not traded that high — at least consistently – since July. While today’s rise is encouraging, shares are still down more than 75 percent from a high of $15.91.

Other gambling stocks also jumped following the news out of New Jersey, including Caesars Entertainment, which saw its shares rise 38 percent, or $3.84 a share, to close at $13.91.

What’s particularly important to note about the measure that Christie has endorsed is that it would permit a kind of reciprocity with other states where online gambling is legal. Zynga has already begun the long process of getting licenses in Nevada, so conceivably it would not have to jump through as many hoops to begin operating in New Jersey. And reciprocity would be essential to making a big enough market.

While many investors are obviously thrilled about the prospects of online gambling, it’s hard to know how much revenue it will produce. Dennis Farrell, a gambling-industry analyst for Wells Fargo, told The Wall Street Journal that online gambling could generate between $650 million and $850 million in annual revenue for the industry in the near term, assuming around 5.8 million people gamble on the sites.

As evidence of the impending launch, two websites have already gone live in the U.K. to start spreading the word. One is dedicated to poker, and the other features a variety of casino games, like slots, bingo and roulette.

But during Zynga’s fourth-quarter conference call yesterday, the company disclosed a new piece of information: Its real-money casino efforts will not be limited to standalone websites. In fact, Zynga will also be leveraging the Facebook platform.

Zynga Chief Revenue Officer Barry Cottle confirmed to AllThingsD: “We’ve been working with Bwin to expand the platform to ultimately be able to offer real-money gaming across the Web, PC download, Facebook, and then hopefully mobile, as well.”

Enabling Zynga to conduct real-money gaming in the U.K. is significant for both parties.

Zynga is by far the largest game maker on the social network, and its poker game is the third-most-popular game on the platform. By allowing Zynga to take and pay out real money in the U.K., Facebook is opening the floodgates to gambling. Likewise, by being allowed to operate poker or other casino games on Facebook, Zynga will be able to tap into its existing network of players more easily than it could from a third-party site.

“Poker on a global basis is a very successful franchise, with 37 million [monthly active users],” Cottle said, although he did not know the specific number of players in the U.K.

This will not be Facebook’s first foray into real-money gaming in Britain, where online gambling is legal for adults over the age of 18. In August, it allowed Gamesys to launch bingo, marking the first and only game on the network, but now that seems like a very small test. At the time, Reuters reported that Facebook had no plans to offer gambling in any other countries or with any other partners.

But a Facebook spokeswoman confirmed yesterday that things have changed, and that more rollouts were coming: “Real-money gaming is a popular and well-regulated activity in the U.K., and we are allowing a few developers to offer games there to adult users on Facebook Platform in a safe and controlled manner.”

Online gambling continues to be unregulated in the U.S., except for in a small number of states, including Nevada. Zynga has begun the arduous process of getting licensed there, but it will likely take months, if not more than a year. Even if it gets approved, it will only be able to operate in that state, so it’s unlikely that Zynga or Facebook will roll out gambling in the U.S. anytime soon.

During Zynga’s conference call, the company confirmed that its two websites — ZyngaPlusPoker and ZyngaPlusCasino games — will launch by the end of June. The additional platforms, including PC download and Facebook, are also expected to launch during the first half of the year, but not necessarily at the same time.

As a reminder of why Zynga is getting into the real-money space, Cottle said, “It was in response to our players. We did some research, and a subset of our players were either already playing or wanted to play [real-money games], and trusted the Zynga brand. Given that we have the largest online poker game in the world, it seems natural to offer that as an extension.”

According to a report by Envision IP, an intellectual property research firm, Zynga has grown its holdings from a single patent and nine pending a year ago to roughly 89 U.S. patents and 36 pending today.

A Zynga representative declined to comment.

A quick search on the U.S. patent site reveals that Zynga owns at least 50 patents for everything from “finding friends for multi-user online games” to “changing virtual items based on location-based actions” and “harvest mechanics for interactive social games.”

Envision Managing Director Maulin Shah explains that another 38 or so patents have been reassigned to Zynga by a company named Walker Digital. Of those, he said, 33 patents relate to casino gaming and gambling technologies.

The patents reassigned to Zynga range from technology that allows users to place wagers, to team play within a casino slot club, to making payouts based on predefined rules. Another five had to do with audio streaming.

Shah said a significant ramp-up in patent holdings can be normal, especially if a company is trying to expand into a new business line. “They probably found it prudent to get some patents before they entered the online gambling space,” he said.

To be sure, Zynga is serious about moving into real-money gaming from its core business of selling virtual goods on Facebook.

Last month, it launched two landing pages in the U.K. that will eventually become the home to 180 casino games, including slots, roulette and blackjack. Additionally, Zynga’s FarmVille brand is expected to be used for one of the slot games. It also began the arduous process of seeking a license in Nevada to conduct real-money gaming online. The process could take close to two years — in just one state.

The acquisition of licenses from Walker Digital is the most interesting part of this story.

In August, The Wall Street Journal reported that Walker Digital had filed about 30 lawsuits targeting hundreds of companies, including Amazon.com, Google and Zynga. Walker Digital, which is owned by Jay Walker, the founder of Priceline.com, is known for enforcing patents opportunistically (a.k.a. patent trolling).

Shah said on March 26 that the case was dismissed, just four days after Walker Digital reassigned the 33 patents to Zynga. However, the patent at issue in the lawsuit was not one of the ones reassigned.

It is completely unclear if those events are connected, or how much Zynga paid for the patents (if anything). But Zynga’s not talking. We also sent an email to Walker Digital, but did not hear back immediately. If we do, we’ll be sure to provide an update.

Today, Zynga is announcing that it will soon launch its newest casino title, Elite Slots, on Facebook.

The game will be the company’s third title in the casino genre, following poker and bingo. It is critically important for Zynga to do well with this game, given that there is already a healthy audience that enjoys spinning the wheels for a chance to win virtual currency on Facebook.

Of course, this has nothing to do with Zynga’s plans to generate big money online through real-money gaming. Those efforts are still a year or more away, so in the meantime, getting a base of free-to-play players should help its prospects when the time comes to add real online gambling.

Over the past two years, the casino genre has been quietly racking up significant interest on Facebook.

Zynga has been phenomenally successful with its poker game, which attracts more than six million people a day on the social network, but other companies have dominated the broader casino sector, which includes games like bingo and slots.

In January, International Game Technology, which makes games found on casino floors, acquired Seattle-based Double Down Interactive for up to $500 million. Prior to the acquisition, AllThingsD reported Double Down was generating $140,000 a day in revenue at the end of 2011. Caesars Entertainment also entered the space when it purchased Playtika, an Israeli game company known for its Facebook title, Slotomania. And on mobile, Bash Gaming is on track to gross $55 million on its one bingo game this year.

While that may pale in comparison to the money that casinos make, it shows there’s an appetite for players to have the same experience online, even if there’s no chance at winning real money.

Zynga previously launched a slots game on mobile, but the one launching soon on Facebook will be completely different, with more game elements.

“There’s already a slots audience out there, but for people who don’t like slots, it’s normally not deep enough,” said Jesse Janosov, a general manager at Zynga.

To get a sense of how Zynga added depth to a game that doesn’t generally require much skill, I got a thorough demonstration of Elite Slots from Nathan Ratcliffe, the design director for the game, who works out of the company’s Austin studio.

Slots on Facebook are very similar to what you see in Las Vegas. You place your bet, choose the number of lines you want to play and then spin the wheels. Facebook games usually give players a number of free coins a day with the option of buying more.

In that regard, Zynga’s game is no different — it provides all of the basics that a slot player will be looking for. But it also offers a couple of side games, which players can either choose to participate in or ignore.

The game is played simultaneously with 150 people in a room who are not necessarily friends, but can chat and share goals. Together, the players rack up points to hit certain targets to fight a boss. In a fairyland setting, that might be a witch, but in a winter wonderland, it could be an abominable snowman. Players choose their avatars for the fight, anything from a white owl to a chihuahua or a cute bulldog.

Ratcliffe says the game will launch with six different themes, with all hand-drawn original artwork. The game also has 50 minutes of original music to replicate all the normal sounds heard on a casino floor.

While slots is all luck rather than skill, there is some strategy to this game. For instance, picking the bulldog over the chihuahua will allow you to progress faster to the goal, and the more you bet, the more you will win, which will give you more strength in fighting the boss. It’s important to note that “fighting” doesn’t entail any weapons or special game skill. It just requires players to continue spinning the wheels — each win results in an attack on the boss; the spins eventually take their toll and kill him.

Ratcliffe said the strategy elements were borrowed from Blizzard’s World of Warcraft, while the avatar components were copied directly from Zynga’s popular Ville games, where expression and collecting items is popular. It’s the combination of the two that they are hoping will attract a wide audience from the existing poker base to its Ville players to new players who are playing slots elsewhere.

Zynga’s Elite Slots is an important game launch for the company since players have grown tired of the mechanics of its other games. Plus, Janosov estimates that slots makes up 80 percent of the casino genre, so while Zynga has dominated poker, it still has a way to go in the other categories.

The San Francisco social games company said today that it has filed an “Application for a Preliminary Finding of Suitability” in Nevada. The process, conducted by the state’s gaming control board, could take up to 18 months. If Zynga is found suitable, it could apply for a license, which could take another two to three months.

“Zynga has filed its Application for a Preliminary Finding of Suitability from the Nevada Gaming Control Board. This filing continues our strategic effort to enter regulated RMG (real-money gaming) markets in a prudent way,” said the company’s Chief Revenue Officer Barry Cottle, in a statement. “As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market.”

The company, which has been clear for awhile about its intention to enter the real-money gaming space, also recently partnered with bwin.party in the U.K. to roll out its first real-money gaming experiences in the first half of 2013.

Online gambling in the U.S. is still very much in the air. Last year, the Department of Justice ruled that online gambling is legal under federal law, but now it’s up to every state to pass legislation outlining operating procedures. Nevada and the District of Columbia moved quickly to enact laws, but clearly it will take time for every state to get a law passed, unless the federal government steps in with a national policy.

The founder’s comments during the call were much different from just three months ago when he blamed some of its decline on Facebook. But today, he took the brunt of the responsibility, and even praised Facebook at times. “The Ville missed our expectations, but FarmVille 2 and ChefVille did a great job. We see a lot of growth for us on Facebook by innovating in genres that have grown a lot this year.”

Why Pincus decided to dial back his previous statements is not clear. But given that the two companies are connected at the hip, it’s probably a good move. Zynga said today that 20 percent of its bookings are coming from mobile, which means the remainder still comes from the social network. Just yesterday, Facebook’s Mark Zuckerberg made a point to call out Zynga’s serious underperformance, which resulted in a 20 percent decrease in payment revenue coming from Zynga compared to a year-earlier. “Gaming on Facebook isn’t doing as well as I’d like,” he said.

But perhaps the only reason for Pincus’ more conciliatory tone was that the company did slightly better today than its worst projections, provided in a warning earlier this month. Investors were soothed by the results and its plans, which included cost-cutting measures and investments in mobile, third-party publishing, advertising and real-money gaming. The stock is up 14 percent in after hours to trade at $2.42 a share after hitting a new low yesterday.

—————————————————

A lot was already known about how Zynga was going to do in the third quarter since it released preliminary results earlier this month, warning that things wouldn’t be good.

But here’s the official report anyway, which is largely in line with what it was expecting — although a tad bit rosier than the ranges it provided.

In the third quarter, Zynga lost $52.7 million, or 7 cents a share, on revenue of $316.6 million. The loss was compounded by a $95.5 million impairment charge related to the purchase of OMGPOP, and charges related to stock-based compensation. Excluding those charges, the company would have made $400,000 and broken even on a per share basis.

Zynga had said it was expecting third-quarter revenue in the range of $300 million to $305 million and a net loss of between $90 million and $105 million, or roughly a 12 cent to 14 cent per share drop. Investors reacted positively to the better-than-expected results, pushing the stock up 15 percent, or 30 cents, to $2.45 a share.

“While the last several months have been challenging for us, Zynga remains well positioned to capitalize on the growth of social gaming,” said CEO Mark Pincus, in a release. “We’re implementing a number of steps to drive long-term growth and profitability.

The trend that worries investors is the declines that the company is seeing on a sequential basis. Compared to the second quarter, revenue dropped 5 percent. The drop was driven by a 2 percent decrease in virtual goods spending and a 24 percent decrease in advertising. The company is currently building a platform to boost advertising revenues across a variety of first- and third-party titles.

Yesterday, Zynga announced a resturcturing plan that included laying off 5 percent of its staff, or about 150 employees, and other cost-cutting measures. In the release today, Zynga said the plan is expected to generate savings in the fourth quarter of up to $20 million, excluding a restructuring charge of up to $12 million. It also said the board has asked the company to repurchase up to $200 million in shares.

Stay tuned for updates from the company’s Q3 earnings call at 2 pm PT

2:01 pm: Hey folks, the call is about to start.

Welcome! Mark Pincus, CEO, and Dave Wehner, CFO, are on the call. Things sure do change quick. Just last quarter, John Schappert was one of the key presenters, and now he’s gone. Lots of things to cover: real-money gaming partnership, layoffs, stock buy-back, employee retention plans, etc.

2:05 pm: Mark is up now, talking about the struggles Zynga is facing.

He says that social gaming is comprised of 235 million players of the 1 billion people on Facebook. Despite this, we didn’t meet our growth expectations. Why?

1. We experienced faster decline in bookings, we didn’t innovate on content and features, and we weren’t able to bring new games to market fast enough to offset these declines.

2. The faster-than-expected adoption of smartphones, which was distracting to its core social game players.

2:07 pm: He said FarmVille 2 and ChefVille are No. 1 and No. 3 on Facebook. Pincus said FarmVille 2 hit a new first: $950,000 in purchase volume in a single day, including the 30 percent it still has to pay to Facebook.

For some perspective, he said 70 percent of its daily active users engage with each other on Zynga’s network, “they generate 700 million social interactions, that’s more than the total ad clicks on Google in a single day.”

The Restructuring plan: This includes a reduction in data hosting spending, labor and outside services. “We also announced several studio closures, and a 5 percent reduction in staff.” They are also cutting 13 underperforming games (no details on which ones), and have a more stringent budget for games. “The Ville missed expectations, but we moved quickly to reduce and redeploy that team.”

On to mobile: Pincus said it has become the fastest growing platform for gaming. And, social games are the most engaging. “We have three of the top five most popular mobile games,” he says. “In the past year, we’ve generated a large audience and a business that represents 20 percent of our bookings.”

So, mobile = 20 percent of bookings.

He says they’ll be making more, high-engagement games, like Poker, for mobile. “We’ve reorganized game teams in Q3 to unite Web and mobile development. … That’s a huge change for our company.” Coming up in the mobile pipeline: Four games per quarter, which will cross Ville titles, casino and mid-core games.

Two new divisions that will be making revenue:

• Advertising: In past quarter, we added 12 new sales team members, and video advertising is a our fastest-growing category with a 142 percent jump from Q2 to Q3, Pincus said. (More info on the platform it is building here.)
• The second category is real-money gaming, as it announced today with its partnership with Bwin.

2:17 pm: Zynga’s CFO David Wehner is now going through all the financials.

“We aren’t satisfied and we are taking immediate action with a cost reduction plan,” he says. We’ve heard all the actions that they are taking before, so nothing new here.

The good news is that a better than expected Q3 means a slightly better full-year guidance, which I think has now been adjusted four times (so perhaps take it with a grain of salt).

Bookings are projected to be in the range of $1.09 billion to $1.1 billion.

Full-year 2012 non-GAAP EPS is projected to be in the range of two cents to three cents.

2:24 pm: Time for Q&A.

In after-hours trading, the stock is now up 11.8 percent, or 25 cents, to $2.38 a share. It’s worth noting that just yesterday, it hit a new low, closing at $2.20 a share.

Pincus dodges a question about how Zynga’s Q3 results fell despite Facebook reporting an overall increase in revenue yesterday: “We’re focused on building great games that can drive deeper engagement and consumer value. FarmVille 2 is a major breakthrough: We can bring a terrific 3-D game to the browser for free and we are seeing great results. We have a similar game with CityVille 2 coming, but we’ll continue to up the quality and engagement.”

Other categories, he says, that are coming include casino, player-vs.-player and core gaming, which has proven to result in better conversion rates.

The analyst presses again, asking about the algorithm changes that affected Zynga last quarter.

Wehner says: “Facebook makes changes to their algorithms all the time, we navigate those changes. We’ve been focused on operating on the Facebook platform and we continue to do that with FarmVille 2 and ChefVille. We’ve seen some declines in existing express and invest games, but we think we can continue to be successful.”

This is a different tone that Zynga is taking regarding Facebook, which it had blamed for some of its previous quarter’s woes.

2:39 pm: Bwin revenue forecasts, please?

Wehner: “There is a revenue share with Bwin on this, and we aren’t providing specific guidance at this time. We think this is a first step and is a long-term opportunity.”

A mobile question about the overlap of players on Facebook and mobile:

Pincus: “In terms of a carryover of Facebook to mobile, it’s tough to measure, but we’ve definitely seen among the Facebook-connected audience, a huge proportion, well over half, reactivated to our network because of mobile, or are playing on both web and mobile. The biggest example is our Poker game.

“In terms of Facebook driving mobile usage, we are excited about some of the changes it is testing, like new sponsored stories, and we are excited to see what the future brings.”

2:44 pm: Finally a more probing question: Why is Zynga losing share on Facebook, and when can you fix that? And, you have about $2 a share in cash, can you use that to grow?

Pincus: “In terms of our overall marketshare, we believe that our position on Facebook has been driven by our own execution. As we’ve said, we haven’t been happy about our execution. In some places, we are happy, but aren’t consistent. We are encouraged in some of our core areas, we’ve done a great job maintaining our market position. In Poker, we’ve maintained and grown, but in invest and express, we would have liked to have executed better. The Ville missed our expectations, but FarmVille 2 and ChefVille did a great job. We see a lot of growth for us on Facebook by innovating in genres that have grown a lot this year.”

Wehner says on capital, they are still looking at M&A, and that they’ll use it when highly strategic, and we continue to invest in core business on mobile and Web. Plus, the share repurchase program.

2:53 pm: A question about the advertising revenue dipping in the Q3 period vs. Q2.

Things can be seasonal, Wehner says. “Ads on the whole is growing for us and we are monetizing better and better on advertising. We are launching new products in advertising on the video side, that’s been a good growth quarter. In the third quarter, we had a sequential decline in users, which impacts ad revenue, but overall, we see it grow faster than user pay.”

2:55 pm: Question about whether the cost-cutting measures were deep enough, given revenue projections.

Wehner: The actions that we are taking will put it in the right place, and we’ll continue to invest in growth.

Pincus justifies the additional headcount and expenses: “If you compare us today to a couple of years ago, we are investing in more growth businesses than we were then. We’re investing in mobile, and network and platform, and advertising, and real-money gaming.”

3:04 pm: Analyst wants more color on future growth plans. Wehner says he’s got no more to say other than that they are on pace to launch two Web games per quarter and four mobile games per quarter.

3:05 pm: That’s it, call is over.

See ya next time, and thanks for tuning in.

Zynga Poker GM Lo Toney Unveils Zynga Casino at Unleashed 2011

But investors won’t like hearing this tidbit: AllThingsD has learned today that Laurence “Lo” Toney, former general manager of Zynga Poker, has left the company.

Toney has updated his LinkedIn profile to reflect his departure, and we were able to confirm with him separately that he is no longer at the company. During his nearly three years at the company, he spent two years as the general manager of Zynga Poker, which is the company’s longest-standing franchise. Following his stint in Poker, Toney held a general manager role in mobile, where he worked on its publishing efforts.

He confirmed via email that he has no immediate plans for what he will do next: “My departure is less about Zynga and more about the vast number of opportunities that currently exist in the Valley. I have been approached by several organization to lead teams and companies that I find exciting and compelling. It is the right time for me in my career to move on.”

Released in July 2007, Poker was Zynga’s first game on Facebook and continues to register nearly 40 million monthly active users.

It is the company’s roots in Poker that make it a strong contender in the online casino space. In addition to managing the game, Toney took charge of leading the company’s real-money gaming strategy, which involved making two acquisitions, including MarketZero of Austin. He also appeared onstage at the company’s Unleashed event last year to announce the company’s casino franchise, which now includes poker, bingo and Zynga Slingo (slots on a Bingo-style game board).

Last week, CEO and founder Mark Pincus said casino would be one of the company’s prime investment categories, after disclosing the news that the company would miss full-year projections for the second time.

Toney is one of the top employees to leave Zynga recently, along with various other C-level executives and general managers. Zynga’s retention has become a sore spot as the company’s stock price continues to plummet and Zynga struggles to make the transition from a Facebook games company to a mobile games company.

However, Toney’s departure doesn’t necessarily leave a gap in the company’s leadership ranks for real-money gaming. In August, AllThingsD reported that Maytal Ginzburg was joining Zynga as the company’s chief operating officer in charge of new markets, including its real-money gaming efforts. Ginzburg joined from 888 Holdings, which offers real-money games such as poker, bingo and sports betting, in markets where online gambling is regulated.

AllThingsD has learned that Maytal Ginzburg is joining Zynga as the company’s chief operating officer in charge of new markets, according to her LinkedIn profile.

As recently as July, Ginzburg was the SVP of regulated markets at 888 Holdings, where she was responsible for acquiring customers and other operations.

888 Holdings operates an online portal at 888.com, offering real-money games such as poker, bingo and sports betting, in markets where online gambling is regulated. More recently, it started to investigate the opportunity in social and mobile gaming through the 2010 acquisition of Mytopia from Real Dice.

Ginzburg has not yet started to work at Zynga, but is expected to begin soon. Social Casino Intelligence was first to point out that she was hired by the company. A spokesman declined to comment.

The hire is important for the Facebook games maker because it shows that, while a number of executives have decided to leave, it can still recruit talent at a very high level.

During the company’s last earnings call, CEO Mark Pincus confirmed that Zynga’s first real-money products were in development, and that it believes it has a huge opportunity to leverage its strong casino presence on Facebook, including with Zynga Poker and newer properties, like Bingo and Slots. Pincus said he expects to launch Zynga’s first real-money gaming products in international markets in the first half of 2013, subject to licensing approvals.

At this time, it’s unclear what Ginzburg will be doing at Zynga, but from an interview she conducted with a U.K. publication, you can tell Zynga was very much on her radar.

She told Inside Poker Business that she believed it was important to integrate social features into 888’s existing products in order to make interactions less serious and more welcoming to casual players. One product that social features helped with was PokerCams, which allowed users to see who they were playing with online.

“We want to attract players who will play for casual entertainment, and we therefore needed to deliver social platforms that are easy to use yet provide all the interactive features users expect,” Ginzburg told Inside Poker Business, adding that “the biggest risk we were running was that casual players avoided the product because of a lack of interaction, which is why so many have gone to Zynga.”

On-the-job personal productivity start-up tenXer has raised $3 million in a Series B round, which it said it will use to accelerate growth outside its software industry market.

The San Francisco company, which was founded by longtime entrepreneur Jeff Ma, makes tools to allow a user or perhaps a company, track performance and progress using a number of different metrics. The presumable goal is to use social and gaming elements, along with this activity data, to help you do your job 10 times better.

Get it with the tenXer name now?

The new funding is led by True Ventures, and its partner, Puneet Agarwal, will join tenXer’s board of directors.

Radar Partners and Khosla Ventures, as well as angel investors, participated in the new round, for what the company describes as a “human capital management platform.”

Currently aimed at tracking the work of software engineers, tenXer integrates current tools such as GitHub, Pivotal Tracker and Jira.

Here’s a video interview with Ma — who gained fame for his gambling prowess as part of the MIT blackjack team, and also was one of the co-founders of Citizen Sports, which was bought by Yahoo in 2010 — about the new round, and also about where tenXer is headed next:

]]> http://allthingsd.com/20120828/jeff-ma-talks-about-tenxer-raising-3-million-more-to-help-you-judge-yourself-video/feed/ 0 http://allthingsd.com/20120801/poker-site-pays-731-million-fine/ http://allthingsd.com/20120801/poker-site-pays-731-million-fine/#comments Wed, 01 Aug 2012 10:00:24 +0000 Alexandra Berzon http://allthingsd.com/?p=236507 PokerStars agreed to pay $731 million to end a Justice Department lawsuit alleging bank fraud, money laundering and violations of gambling regulations against it and a another poker website.

Under the terms, PokerStars, based in the Isle of Man, will pay $547 million to the Justice Department and $184 million to poker players overseas owed money by it and rival website, Full Tilt Poker. As part of the arrangement, Pokerstars will acquire the assets of Full Tilt.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20120801/poker-site-pays-731-million-fine/feed/ 0 http://allthingsd.com/20120727/zyngas-john-schappert-talks-up-opportunities-after-a-shocking-quarter/ http://allthingsd.com/20120727/zyngas-john-schappert-talks-up-opportunities-after-a-shocking-quarter/#comments Fri, 27 Jul 2012 19:18:18 +0000 Tricia Duryee http://allthingsd.com/?p=234843 In an interview, Zynga’s COO John Schappert said the social games company still has many opportunities on the horizon, despite a shockingly poor earnings report on Wednesday.

Earlier this week, Zynga missed analyst estimates and slashed its 2012 guidance. The company’s excuse? It saw softness among its core games, delayed the launch of The Ville and witnessed an extreme dropoff in Draw Something players.

The bad news sent the newly public company’s stock into a tailspin. Today, it continues trading 70 percent below its offering price, at $3.12 a share.

The series of events also sent the company’s executives into a frenzy, trying to come up with the words that would reassure investors that Zynga has not lost the game — at least not yet.

In the interview Wednesday, Schappert, who left Electronic Arts to join Zynga, emphasized the opportunities lying ahead.

• On the immediate horizon, he said, the company will get a boost from big Facebook titles coming later this year, including ChefVille, FarmVille 2 and another unannounced ’Ville game. Another near-term project focuses on branching out from the company’s core female demographic, by making “mid-core” game titles.
• A bit further out, he said, the company has the opportunity to expand beyond Facebook into mobile. While its user base grew 50 percent to 33 million daily active users during the quarter, it has yet to develop games that encourage users to pay to play.
• And in the long term, he said, the company has an opportunity in real-money gaming. While the prospect of gambling tends to get investors excited, it’s still limited for now to Europe. Plans include launching internationally in the first half of 2013, subject to licensing approval. The company is also working on publishing third-party titles for the Web and mobile.

More from Schappert on those subjects and more:

Mid-core gaming: We saw some success around Empires Vs. Allies with player vs. player. It’s a category that intrigues us, absolutely. It’s a different demographic. We’ll make it social, free and accessible, just like we’ve done with Casino and Arcade. This is a category for male-oriented games, and yes, it will be equal [to Casino and Arcade]. It’s a big emphasis. We haven’t announced timing, but we are actively working on games in that genre.

Villes on mobile: Going forward, the emphasis in mobile is on creating games in higher monetizing genres, like Ville-style games. Casino monetizes well, and you see us doing slots on mobile, but there will also be more Ville-style games coming to mobile. … We do know that Ville-style works well on Web and mobile, and we are actively developing Ville-style games on mobile.

Draw Something’s Q2 dropoff: The game is incredibly successful and is close to 90 million installs. It was a very large contributor in the second quarter, and while the DAUs (daily active users) came down, there’s still a strong connection with its players. A third of the players have played in the past month, and it’s still contributing in a meaningful way, but it didn’t hit expectations and revenue projections.

]]> http://allthingsd.com/20120727/zyngas-john-schappert-talks-up-opportunities-after-a-shocking-quarter/feed/ 0 http://allthingsd.com/20120709/betable-could-bring-real-money-table-stakes-to-social-game-publishers/ http://allthingsd.com/20120709/betable-could-bring-real-money-table-stakes-to-social-game-publishers/#comments Mon, 09 Jul 2012 16:00:25 +0000 Mike Isaac http://allthingsd.com/?p=228148 There is far more money to be made on your virtual crops than just FarmVille cash.

No, not through virtual crop subsidies. I’m talking about money for the other guys, the game companies like Zynga, Nexon and Electronic Arts, all major publishers whose average revenue per user (ARPU) in casual social gaming is far lower than than it could — or should — be. Especially when you stack it up against that of real-money online gambling, with ARPUs ranging from 80 to 160 times that of the Zyngas of the world.

Betable, an online real-money gaming platform, wants to change this, offering itself up as the streamlined way for publishers to add real-money betting to their existing game portfolios.

Online gambling is obviously nothing new. The problem is, it’s an industry dominated by the existing players in the space, companies like 888, Bwin and Betfair. They already have the biggest barrier to entry for any business looking to institute online gambling: Licenses. If you want to participate in the real-money online gambling space, there are hoops to navigate, paperwork to fill out, and lines to wait in. That’s an 18-month minimum wait time, on average, and this is the case no matter what size the company, no matter how vast its resources may be.

In contrast to that, developers sign up for a Betable account, set up their apps and integrate them with Betable’s platform, and can launch their game within the span of a few hours.

Betable’s value proposition: It has already done all that homework. The company is licensed in the United Kingdom, and its license extends to work in any countries that legally allow online gambling. (Sorry, Stateside gamblers — no dice for you until the U.S. government decides to make online gambling legal in America again.)

A risky proposition, considering how many Americans may want to find ways to circumvent the rules? Perhaps, though CEO Chris Griffin says Betable has a number of safeguards to prevent this. Betable takes into account geolocation information from the access terminal, plus data from the initial signup process, and also pulls publicly available data from disparate sources like voting records and credit reports, all to verify you are who you say you are — or more importantly, where you say you are.

Most interesting to me, however, isn’t the possibility of turning Zynga’s play-money slots into real-money ones. It’s the possibility of monetizing existing games. Adding subtle forms of wagering to massively popular games like any of Zynga’s “Ville” games — or perhaps putting real-money stakes on games like Draw Something — could be far more lucrative than trying to attack the tiny 2 percent conversion rate that freemium models average.

The area is ripe for investment — and many have invested. Along with its private beta announcement, Betable’s recently raised seed round includes investment from True Ventures, Greylock Discovery Fund and CrunchFund, as well as from individuals like Howard Lindzon, Joshua Schachter and Dave Morin.

As of Monday, Betable is only opening its doors to some developers in a private beta. The company has already been working with a handful of companies in private alpha, and will choose those best-suited after developers sign up on the company’s site.

Will publishers buy in? Perhaps. Zynga has already expressed interest in the online gambling space, and rumor has it that Facebook has made inquiries as well.

]]> http://allthingsd.com/20120709/betable-could-bring-real-money-table-stakes-to-social-game-publishers/feed/ 0 http://allthingsd.com/20120406/casino-game-makers-outline-a-winning-strategy-on-facebook/ http://allthingsd.com/20120406/casino-game-makers-outline-a-winning-strategy-on-facebook/#comments Fri, 06 Apr 2012 22:34:03 +0000 Tricia Duryee http://allthingsd.com/?p=193967 Remember, the house always wins.

Increasingly, that phrase can be applied not only to Las Vegas casinos, but also to Facebook, which takes a 30 percent cut of game developers’ revenues for the right to be on the social network.

“Facebook is almost the same business [as casinos],” said Chris Satchell, CTO and EVP of research and development at International Game Technology, which makes both traditional casino games and social games. “Facebook has real estate and customers, just like the casinos.”

Since 1981, IGT has been developing and manufacturing slot and video poker machines for casinos. Some of its games include recognizable brand names such as Wheel of Fortune, Big Buck Hunter, The Hangover and Sex and the City. Now, the casino game-maker is trying its hand at social games.

To make the leap, in January IGT acquired Seattle-based Double Down Interactive for $500 million. This week, the company launched their latest social game, called American Idol Slot, within Double Down’s casino on Facebook, which ranks in the top 25 by drawing 5.4 million gamers a month.

The American Idol game lets people spin the wheels featuring the faces of Season 11 contestants with host Ryan Seacrest looking over their shoulder. The free-to-play game allows you to win additional chips. Those who aren’t as lucky can buy 75,000 for $1.

The company says the game was in development prior to the acquisition, but says it is an example of how the two companies make a great fit.

Satchell said the idea is to enable cross-platform gaming experiences, so that players can connect to games before, during and after visits to casinos. Obviously, using big names helps.

But he also sees Facebook as a way to introduce casino games to a younger crowd, who are more likely to go clubbing at a casino than play highly profitable slot games.

“If we could just get them to understand that it’s fun. Social gaming is a good way to do that, and it’s a good business in its own right,” he said.

It’s a good business now, but it may be an even better business in the future when online gambling is legalized.

Late last year, the Department of Justice issued a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the Act as only outlawing bets on sporting events — not all events and contests. With that clarification in place, it will now be up to each state to pass legislation outlining operating procedures.

Some states have already passed laws, encouraging several companies, including IGT, Zynga and Caesars Interactive, to place their bets.

]]> http://allthingsd.com/20120406/casino-game-makers-outline-a-winning-strategy-on-facebook/feed/ 0 http://allthingsd.com/20120402/accel-partners-bets-on-social-games-company-dragonplay/ http://allthingsd.com/20120402/accel-partners-bets-on-social-games-company-dragonplay/#comments Tue, 03 Apr 2012 04:00:25 +0000 Tricia Duryee http://allthingsd.com/?p=192301 Dragonplay, a Tel Aviv mobile and social games developer, has raised $14 million in a first round of funding from Accel Partners.

The company, which specializes in developing card and casino games for Android and Facebook, said the investment will be used for building more games, expanding to other platforms — like Apple’s iOS — and possible acquisitions.

Dragonplay says it is best known for Live Holdem Poker Pro on Android, which has more than 12 million installs and two million monthly active players.

To date, the casino category has been very successful on social networks, with Zynga’s Poker game dominating at the top of the charts. More recently, the attention has been turning toward real-money gaming as restrictions begin to relax in the U.S.

Accel’s Adam Valkin, who is joining the company’s board, said the company is currently focused on free-to-play social gaming, but Dragonplay will pursue other opportunities as they emerge.

Zynga and other companies, such as Double Down Interactive, which was acquired by a video poker company, and Caesars Entertainment, which went public, have been among the most vocal about going after the opportunity.

Dragonplay, which was founded in 2010 by Sharon Tal, previously raised seed capital from Entrée Capital.

]]> http://allthingsd.com/20120402/accel-partners-bets-on-social-games-company-dragonplay/feed/ 0 http://allthingsd.com/20120306/big-fish-scoops-up-mobile-casino-game-maker-self-aware-games/ http://allthingsd.com/20120306/big-fish-scoops-up-mobile-casino-game-maker-self-aware-games/#comments Tue, 06 Mar 2012 16:02:02 +0000 Lauren Goode http://allthingsd.com/?p=180885 Casual-gaming company Big Fish has acquired mobile social game developer Self Aware Games, makers of Card Ave: Casino, and its parent company, Social Concepts, in a cash-equity deal of an undisclosed amount. The acquisition comes as more gaming companies are exploring opportunities in gambling-themed games and U.S. states weigh the legalization of Internet gambling. Seattle-based Big Fish, which has more than 2,500 games in its catalog and 45 million game downloads per month, saw revenue north of $180 million in 2011, the company said.

]]> http://allthingsd.com/20120306/big-fish-scoops-up-mobile-casino-game-maker-self-aware-games/feed/ 0 http://allthingsd.com/20120208/caesars-ipo-hits-jackpot/ http://allthingsd.com/20120208/caesars-ipo-hits-jackpot/#comments Wed, 08 Feb 2012 17:55:29 +0000 Tricia Duryee http://allthingsd.com/?p=172596 Caesars Entertainment stock popped 82 percent on the first day of its public offering, trading at $16.39 a share. The Las Vegas company sold only 1.8 million shares, at a price of $9 each. Caesars, known for its casinos, is also betting on new online initiatives, such as social and real-money gaming. The IPO will provide an exit for some of its investors, who paid $28 billion to take it private four months ago. Because of its debt balance of $22 billion, some analysts view the deal as unattractive.

]]> http://allthingsd.com/20120208/caesars-ipo-hits-jackpot/feed/ 0 http://allthingsd.com/20120203/care-to-bet-which-other-social-games-company-is-about-to-go-public/ http://allthingsd.com/20120203/care-to-bet-which-other-social-games-company-is-about-to-go-public/#comments Fri, 03 Feb 2012 22:06:37 +0000 Tricia Duryee http://allthingsd.com/?p=171286 Caesars Entertainment may be known for its Las Vegas casinos, but it also has a burgeoning business developing way off the Strip.

In its roadshow presentation released online today, the Vegas-based company, which manages 42,000 hotel rooms, said one of the biggest opportunities it had going forward was on the Internet, including social games and real-money gaming.

Mitch Garber, the CEO of the company’s interactive division, said it recently launched Caesars Casino in beta on Facebook, making it the first time that a brand name was used to compete in the casino genre.

Garber believes that the game, which includes video slots, blackjack and roulette, will displace Double Down Casino as one of the category leaders. The developer of Double Down Casino, Double Down Interactive, was recently acquired by video poker giant International Game Technology for $500 million.

Garber said over the past 13 months, so much of the business has changed.

With the sale of Double Down, and the visibility into social games leader Zynga, which went public in December, and the release of more information this week by Facebook in its public filing, there are lots of verifiable signs that this is a big business.

For instance, on Wednesday, Facebook revealed that Zynga made up 12 percent of its overall revenues. Zynga’s Poker game is the leading casino-based game on Facebook, and more recently, it launched Bingo as part of a casino series.

Over the past two days, Zynga’s stock price has soared based on the Facebook news, rising 8.11 percent today alone to close at $13.39 a share.

Caesars said yesterday it was applying to be listed on the Nasdaq market under the symbol “CZR,” and that it was planning to sell 1.8 million shares between $8 and $10 apiece.

Caesars Chairman, CEO and President Gary Loveman was positive about a number of aspects of the business, as he should be in a presentation to potential investors, but one of the highlights was online gaming.

“This is a big deal for us,” he said, calling out the opportunity for gambling online, across both mobile and social networks and across multiple languages.

In addition to launching Caesars Casino on Facebook, the company has been building up its online gaming chops for some time.

Garber said this past year the company purchased Israel-based Playtika, which operates Slotomania, a very popular slots game on Facebook, iPhone and iPad. It also has two software partners that will enable it to expand into online gambling in the U.S. as soon as it becomes legal.

“We aren’t aware of any other bricks and mortar company that has the online experience that is preparing themselves as we are,” he said.

However, Zynga told All Things D it was currently seeking partnerships to pursue real-money gaming, and MGM Resorts also recently unveiled a plan to partner with online poker company Bwin.Party Digital Entertainment.

Of course, the big driver for everyone is that the laws are changing in the U.S., which makes it nearly a foregone conclusion that online gambling — at least some games — will become legal over the next year.

Late last year, the Department of Justice issued a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures.

“We see the odds being close to 100 percent,” Garber said. “It’s just a matter of whether it will be federally regulated or state by state. The states are already doing it, but the federal government is getting their act together, too.”

]]> http://allthingsd.com/20120203/care-to-bet-which-other-social-games-company-is-about-to-go-public/feed/ 0 http://allthingsd.com/20120126/zynga-calls-out-bingo-as-its-newest-casino-title-launches-on-facebook/ http://allthingsd.com/20120126/zynga-calls-out-bingo-as-its-newest-casino-title-launches-on-facebook/#comments Thu, 26 Jan 2012 18:00:50 +0000 Tricia Duryee http://allthingsd.com/?p=167668 Zynga is getting close to launching Bingo, its second casino game on Facebook, which could serve as a precursor to the company’s more official online gambling business.

Last week, Zynga confirmed to All Things D that it was actively investigating online gambling opportunities and is in talks with several partners.

The San Francisco social games company said Bingo is launching today in closed beta, and in the coming weeks will be available to everyone on Facebook. The game will become part of a larger franchise called Zynga Casino, which was announced in October.

Zynga’s version of the game is similar to the classic version found in bingo halls, where players watch for numbers as they pop up and mark them off on their scorecard. The first player to spell out B-I-N-G-O wins. In Zynga’s version of the game, players can compete against friends.

But for now, the closest the game gets to gambling is the casino theme.

Zynga dominates Facebook’s game chart today, but if it is able to get its toe in the door to online gambling — just as the laws change in the U.S. — it could be a big opportunity.

The casino genre has also been quietly racking up big numbers on Facebook for areas such as slots, card games and roulette. In particular, Zynga has been phenomenally successful with poker. Five years ago, it launched Texas HoldEm Poker, which continues to attract close to seven million users a day and is one of the company’s top three revenue-generating titles.

Zynga is not the only one investigating how to enter online gambling, potentially leveraging the popularity of social networks.

Video poker giant International Game Technology recently purchased Seattle-based Double Down Interactive for 500 million; Double Down develops games, including blackjack, slots, video poker and roulette. Caesars Entertainment also entered the space when it purchased Playtika, an Israeli game company known for its Facebook title, Slotomania.

Zynga’s Bingo game is not dissimilar to versions already on Facebook, such as BitRhymes’ Bingo Bash and Buffalo Studios’ Bingo Blitz.

]]> http://allthingsd.com/20120126/zynga-calls-out-bingo-as-its-newest-casino-title-launches-on-facebook/feed/ 0 http://allthingsd.com/20111227/states-cleared-for-online-bets/ http://allthingsd.com/20111227/states-cleared-for-online-bets/#comments Tue, 27 Dec 2011 13:00:40 +0000 Alexandra Berzon http://allthingsd.com/?p=157180 Some state lotteries are likely to take steps toward online gambling after a new opinion by the Justice Department that gives states a green light.

“We’ve built the system and had it on a shelf waiting for more legal certainty,” said Gordon Medenica, the director of the New York lottery, which is planning to start selling lottery tickets on the Internet next year. “We’re pleased for the opportunity this gives us.”

A number of statehouses and lotteries in search of new revenue have recently considered proposals to allow some form of online gambling. Washington, D.C., voted this year to allow its lottery to operate online poker, but the law hasn’t yet been implemented. Five state lotteries already offer modest Internet-based subscriptions for lottery drawings. Both Illinois and New York have drawn up more expansive plans to sell tickets online to their lottery drawings.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20111227/states-cleared-for-online-bets/feed/ 0 http://allthingsd.com/20111019/casino-social-gaming-ringing-up-big-business-on-facebook/ http://allthingsd.com/20111019/casino-social-gaming-ringing-up-big-business-on-facebook/#comments Wed, 19 Oct 2011 16:55:43 +0000 Tricia Duryee http://allthingsd.com/?p=133732 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.

]]> http://allthingsd.com/20111019/casino-social-gaming-ringing-up-big-business-on-facebook/feed/ 0 http://allthingsd.com/20110921/playhem-brings-gambling-to-online-gaming-sort-of/ http://allthingsd.com/20110921/playhem-brings-gambling-to-online-gaming-sort-of/#comments Wed, 21 Sep 2011 16:44:18 +0000 Tricia Duryee http://allthingsd.com/?p=122098 All forms of online gambling are illegal in the U.S., but there’s a small loophole: If you are wagering on yourself in a game of skill, it’s completely fair game.

That’s where Playhem enters the picture.

This week, New York-based start-up Playhem officially launched its gaming platform, which allows friends to compete against each other for cash or prizes or compete in tournament-style games.

In recent months, the federal government has cracked down on several foreign companies operating online gambling sites in the U.S. But Playhem co-founder Ryan DeSanto says what Playhem is doing is legal, except in about a dozen states, including Arkansas, Iowa, Maryland, South Carolina, Illinois and Vermont.

He says you purchase credits, you wager them, and then you can redeem them for cash and prizes.

While technically they could wager cash, he said, “We removed wagering with dollars because people are used to dealing with virtual currency and people like that more. It’s a softer entry point as well with our partners, publishers and media companies.”

The site went into beta in February, but is now live, allowing anyone to sign up and compete.

So far, it is allowing people to play console games, like Tiger Woods, FIFA or Madden, or online games, like StarCraft.

DeSanto compares it to Fantasy Football, except with videogames. “We sat down to build this so groups of friends can compete with each other,” he said. “I have friends across the country, and this is safe, secure and it’s actually legal.”

In the states where it’s not legal, people can still play — just not for cash.

In addition to catering to the guys on the living room couch, Playhem is also leveraging the platform it built for tournament-style games played by professional videogame players (Yes, they are real).

It has partnered with IGN Entertainment, a media company, and Caesars Entertainment, to help bring pro leagues to Caesars casinos. Playhem will manage the qualifying rounds that will be played online ahead of a tournament to take place in Atlantic City in October.

Playhem competes head-on against Major League Gaming, a professional video game league, as well as Virgin Gaming. As you might guess by the name, Virgin Gaming is backed by Richard Branson. It too facilitates professional tournaments or just friends playing for money. Virgin Gaming has a partnership with EA’s sports division.

Playhem is financially backed by angel investors and is currently seeking a first round of funding.

]]> http://allthingsd.com/20110921/playhem-brings-gambling-to-online-gaming-sort-of/feed/ 0