The Emergence of Online Social Gambling

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In the brick and mortal world the distinction between casino gambling and social gambling is clear. Casino gambling is a commercial enterprise that takes place at casinos, clubs or other designated places, where the organizer earns money through a house edge or rake and where public participation is largely allowed. Social gambling is gambling at private places, like homes, between friends and family. In social gambling usually the following rules apply. All the money collected as wagers must be distributed as prizes and nothing can be kept aside even for funding of drinks or meeting costs. No commercial activity like sale of liquor is allowed where social gambling takes place. What has been a problem is the prevention of illegal “social gambling” and convicting the offenders.

With the proliferation of the Internet almost every conceivable activity in our real world had been replicated in the cyber world. Commercial gambling at online casinos and poker rooms has been taking place since around 1995. Today most of the online gambling sites are under the same degree of licensing and regulation as their brick and mortar counterparts. Over the last few years the social networking arena has shown remarkable growth. Gaming has become an important activity at social networking sites. However, till recently these games did not involve gambling, because of legal restrictions imposed. In order to bypass the laws against gambling activities at such sites, the site owners sell virtual money that allow players to gamble online on games like poker. All the big social media sites are lobbying to make online social gambling legal.

In July 2012 the world’s first social gambling games Meetup was held in London at the Verve Bar in Covent Garden. The event had over 100 participants, which included gambling operators, game developers, investors and casino technology companies. There were two speakers at the MeetUp. The Managing Director of Enteraction, Andy Rogers, spoke on the opportunities in this market and the CEO of Plumbee.com, Raf Keustermans,spoke on securing finance for a social casino games company. The participants included Gordon Anderson, a consultant in the Mobile & Digital field, and Peter Ward, CEO of Quizzino Ltd, both of whom mooted the idea of a more structured and comprehensive MeetUp.

The response from the participants has led to the announcement of a second Meetup. This will be held on September 12 at the Google Campus building in London. There are several topics on the agenda. The regulation of casino-style social games becomes important in the face of the intent expressed by the United Kingdom government that it is considering the regulation of such games. The issues before the participants would be whether social gambling needs regulation, what would regulation mean to platform providers like Facebook and how would regulation impact the future of the social gambling industry. The second big issue is investment in social gambling. Answers will be sought to questions like what drives investors to social gambling and what do investors look for when analyzing investment opportunities in this sector. A larger and more widely announced conference, The Social Gambling Conference, has been scheduled for November 2012. Hopefully by the end of the year there will be more clarity on the future of social gambling, particularly if national government representatives participate in the November conference.

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