The Next Billion Dollar Opportunity?

No one seems more qualified to exploit the opportunity than social gaming company, Zynga, with their established user base, expertise in driving engagement and virality, and iterative data driven product development process.

Many believe that online gambling will soon become as simple as buying an e-book or streaming a movie, and that the convenience of being able to bet from your couch, will present incredible opportunities for entrepreneurs.

Given the lengthy licensing process and regulatory concerns, new entrants are looking to partner with currently existing casino operators.

Rational Group, the Isle of Man-based company that operates PokerStars, the world’s leader in real-money online poker, acquired the Atlantic Club Casino Hotel, one New Jersey’s 12 licensed casinos and will obtain and NJ Casino license with the transaction. Nevada’s law, signed on February 21st of 2013, lets land-based casino operators offer online poker only.

New Jersey’s Governor Chris Christie recently signed a law allowing Atlantic City’s casinos to run websites that take bets on games such as blackjack, slots and poker, but require bettors to be physically present in the state.

Concerns over social responsibility will have some consequences on investment considerations in the market. Juniper Research estimates that betting on mobile devices alone will be a $100 billion worldwide industry by 2017.

MGM Resorts and Boyd Gaming Corp, its partner in the Borgata casino in Atlantic City, have arrangements with Bwin.Party, which runs Internet gambling from Gibraltar.

If online gambling laws continue to be relaxed across the United States, it could represent a massive opportunity for entrepreneurs and investors. Schmidt, Google’s Executive Chariman.

Some large companies have policies against involvement with gambling, which reduces exit opportunities for companies in the business. Delaware recently passed similar laws.

In addition, some large public equity investors, such as hedge funds, have policies against investing in gambling related companies and some general and limited partners of venture capital and private equity funds have similar policies, which could reduce liquidity in private markets.

Offline gambling is a massive market with validated demand, and many believe online gambling will be llarger.

Chris DeWolfe, a co-founder of the pioneering social site Myspace, is launching a gaming studio with a gambling component. They’ve already hired an executivefrom 888 Holdings, a gambling company, begun investing in state and federal lobbying efforts, and have applied for an operator license in Nevada and expect to launch their first real-money gaming products in international markets in the first half of 2013. Investors include Jeff Bezon’s, Founder of Amazon, and Eric E.

Betable allows social game developers to add real, working gambling mechanics to their games.. Overseas, online betting is generating an estimated $32 billion in annual revenue — nearly the size of the United States casino market.

In the U.K., Zynga has partnered with Bwin.Party to offer games such as “FarmVille” slots for real-money betting

Leave a Reply