“The 170 million social gambling player base is over triple that of online gambling and is opening up gambling to a new pool of customers,” read a statement from Morgan Stanley.
On the issue of regulation, Morgan Stanley added: “Social gambling is unregulated and so thrives where online gambling is restricted.”
Much of the social gambling industry is averse to the regulation word being banded around. One of those opposed to the social gaming industry being treated as the same thing as the online gambling industry as a whole is Hussein Chahine, CEO of Yazino.
When asked about the issue of regulation in social gambling, he told CalvinAyre.com: “Regulation would be much more useful and accepted if the concerns about protecting consumers were clearer and non-enforceable, instead of automatically just treating social casino like the gambling industry.
“The two sectors are different on every level – product, user experience, reach, business models and platforms. The social gaming industry is breathing much needed innovation into casino gaming, introducing features like social connectivity and mobile platforms,” he said. “By contrast, the online gambling industry is simply watching – as usual. Nothing new will come out of the gambling sector; innovation will come from the outside. They bottom line is, they are focusing on regulating social gaming/casino instead of joining the revolution.”
The gambling industry has recently seen partnerships being signed all over the place by online gambling firms looking to get a head start in the social gaming space. Morgan Stanley think this approach will eventually be a fruitful one and added: “Zynga, bwin.party, 888 and International Game Technology all have exposure to growth in social gambling and are well positioned for ongoing convergence, we think. Other potential winners include Betfair, Paddy Power and WMS Industries Incorporated.”
A panel at the recent Social Gaming and Gambling Summit heard from panelists that IGT’s $500million outlay on Double Down Casino was in fact a bargain and that they should be applauded for the transaction. The Yazino CEO Chahine is a little more lukewarm on partnerships with online gaming firms as, after all, they did build their’s from the ground up.
“Pursuing partnerships with the gambling industry has proven very difficult on number of fronts,” he said. “Bridging social casino to the gambling market requires building a platform from the ground up in order to fully comply with gambling rules. The social gaming industry so far hasn’t given regulation any thought. The recent partnership of Zynga and Bwin-party shows that even the biggest social gaming developer with a successful suite of casino-style games is incapable of building its own gambling platform.”
The real challenge for the social gambling industry is still to turn the virtual money being used into real money and if they crack that then the $7bn figure being touted above could be a realistic one.