Facebook bets on Real-Money Gaming in UK

The first real-money gambling application launched onto Facebook’s UK app store on August 7, 2012. Gamesys made social gaming history with the launch of its Bingo & Slots Friendzy app in what could be the first stage of revolutionising the online gaming industry.
Google lists Facebook with 900 million users, 920 billion page views per month and growing at an unprecedented pace. The Silicon Valley start-up that launched in 2004 has revolutionised social networking and enabled a gaming sector to materialise.
Until now, Facebook has not permitted any real-money wagering on the social network. Social casino games allow players to purchase virtual currency for quick progression in games and to rank above friends. Recent apps also allow players to win non-cash prizes like tickets and restaurant vouchers at casino resorts.
But following the social giant’s recent public listing, the gateway has opened for legal online gambling to increase revenue growth. Allowing the sector to emerge as a new avenue towards profit, looks less risky than its cloudy advertising business.
In a recent statement Facebook said, “Real-money gaming is a popular and well-regulated activity in the UK and we are allowing a partner to offer their games to adult users on the Facebook platform in a safe and controlled manner.”
The UK has one of the most “well-regulated” and “mature” online gaming frameworks and is the best jurisdiction to offer real-money gambling in a “safe and controlled manner”, according to Facebook. Only players in the UK over the age of 18 will be able to view the Facebook App or related adverts.
Facebook will use geo-location technology to determine whether a user is based in the UK by identifying the subject party’s IP address. Age-gating technology will be used to ensure under-18s and “vulnerable people” are also unable to access the app. This is important so operations are regulated under UK gambling legislation.
“Our Facebook application is not visible to under 18s and nor is any friend activity relating to the application,” remarked a Gamesys spokesperson, “Furthermore, users must pass stringent age and identity verification checks before being allowed to use the application.”
Gaming apps are currently taxed by Facebook at 30 percent of their revenue from purchased virtual currency, but it has not yet been confirmed whether gambling applications will be subject to additional rates. However, this high percentage will keep away serious gamers, who wager at online casinos with better odds.
“Facebook is keeping 30 percent,” commented Larry Chiagouris, marketing professor at Pace University in New York, “Every gambler knows that while the house keeps a certain percentage of the winnings, it is rarely as high as 30 percent.”
With casino games now the most popular form of gaming on Facebook, Chiagouris predicts people who like the social element of games will flock to the new offerings. Once attracted to real-money gambling and after doing the calculations, players could quickly become tempted to opt for an online casino. Gaming within the Facebook environment is also often slower than traditional online casinos, allowing fewer bets to be placed in a given timeframe.
However, the online dominance of Facebook, volume of users and integration with mobile technology will allow a social gaming market to expand and new innovations to emerge. Developers will be attracted to the environment with social-orientated themes that can be quickly implemented with social casinos.
Linda Griffin, a spokeswoman for Facebook, said that there are no plans to offer gambling in any other countries at this stage and they have not been considering other partners other than Gamesys. The Bingo & Slots Friendzy app will be closely monitored to determine whether gambling and social will effectively merge for companies to shift resources into the new environment.
The next question is whether gambling or social gaming companies will be better positioned to capitalise on this, and if Facebook will become a major force in gaming. Zynga, the social network’s largest gaming partner, said it plans to introduce real-money gambling versions of its popular social casino games next year, sending its stock price to an all-time high.