Facebook Enters Online Gambling

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A report in Financial Mail on August 7 states that the social networking giant Facebook has finally decided to enter the real money online gambling sector. To start with this venture will be limited only to the United Kingdom and obviously to players above the majority age of 18 years. Financial Mail says that now the speculation on whether Facebook, and other social networking sites, would offer real money gambling products to prop up revenues has ended. Facebook first made its inclination towards online gambling felt when it allowed online casinos to open pages on Facebook.

The first online gambling vertical to be offered will be bingo. Julien Codorniou, Facebook’s head of gaming for Europe, Middle East and Africa, pointed out that online bingo is already very popular and well regulated in the United Kingdom. For millions of bingo players it is a social experience and therefore the decision to start with this product. Facebook will launch the Bingo Friendzy app in a joint venture with Gamesys to target the social network’s immense online market. Gamesys is one of the largest online gambling operators in the United Kingdom. Codorniou said, “We are a distribution platform for Gamesys. They have the games and we bring the audience.”

Clive Hawkswood, the CEO of the Remote Gaming Association, reacted to this news item calling it “a significant development”. According to Hawkswood, bingo is at the softer end of the online gambling spectrum and it operates with chat forums. Therefore it is a perfect match for Facebook. Hawkswood explained that it is difficult for Facebook to monetize its core offering and entering into online gambling is one way of adding to the bottom line.

The news item also mentioned a bit about future plans. Slot machines will be added in the coming weeks. Facebook is in negotiations with other online gambling companies about offering products like casino games such as blackjack and roulette. However, there is nothing specific on the table and no time frame planned. Facebook has its base in the United States. But because of the uncertain legal and political climate prevailing, it will not be possible for Facebook to extend its online gambling venture there. However some European countries have put in place online gambling regulatory regimes and these are on Facebook’s radar. Zynga, Facebook’s largest gaming partner, already offers free to play games. Zynga is hoping to convert to real money gambling versions of its poker, bingo and slot machine games in 2013.

Online gambling is expected to grow despite the overall depressed economic climate. Market surveys predict a Compound Annual Growth Rate of 7.9% for the five-year period from 2011 to 2016. Facebook’s decision makes sense in the light of this projection.

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