After this year’s visit to the biggest dedicated Gaming exhibition and conference for the Gambling industry, the iGaming Supershow in Amsterdam, one “area” certainly caught my attention: the “social gambling zone” and its most interesting trend, peer to peer sports betting.
To me, social gambling translates into adding humanity back within the electronic gambling process. Before computers made it through, human beings needed to speak to one another in order to bet (or trade). Although, online betting seems more monetarily efficient by several orders of magnitude, lots of information is lost along the way, such as the number of people betting a certain way, how the weather on the pitch is (for example) or how easily it was for the other person to take one bet or the other. Whether you are betting against a bookmaker, a pool or a market in a gambling exchange, you are gambling against other PEOPLE. Thus, adding “social” into betting re-introduces some of the “humane” element involved in negotiating electronic transactions.
But the secret of making profit from social sport betting once the real money is out is yet to be unraveled. Well, at least until now that is, since many attempted but few succeeded in turning this business into a success.
However, peer to peer gambling has a real chance to turn the tides as it addresses the social sports competition experience. Consequently, even if there is no money involved, the gamblers’ winning desires and ambitions might be the missing link of the equation. Winning is more important than the lack of real money, we can all agree on that!
According to Sportradar’s data analysts, sports gambling revenues are worth somewhere between $700 billion and $1 trillion a year worldwide. Enhanced by an increasing use of smartphones and tablets by gamblers, betting has turned into a significant second screen accompaniment to live sport around the world. As a consequence, a new group of companies has soon arisen during the last few years attempting to change the business model on which sports betting is based. The first wave of new companies included Social Bet Inc (based in Silicon Valley) which launched peer-to-peer social betting services, enabling gamblers to bet against each other as individuals rather than against a market of betting odds.
You Bet Me by Social Bet Incorporated was the first social bet app to hit the stores. The company presented it as a mechanism for “virtual handshakes” on anything from a round of golf with some friend, World Series predictions or the arrival of the royal baby.
Gamblino is a more recent US entrant, presenting a mobile application offering users the opportunity to make sport wagers in custom groups. For example, they can join localized contests (in sport bars)to compete for same day prizes such as drinks or even food. They can also play season competitions against users across the entire app competing for items such as tickets to major sporting events. All betting is done with free Gamblino “points” and not with real money, giving users “the thrill and rewards of winning sports bet without the downside of losing anything”.
Last but not least I can’t skip a prominent market player like Blue Ox Entertainment and their enhanced Side Bets app which now features the ability for its users to post Side Bets victories on their Facebook or Twitter wall with a mere click. Users can also create “groups” for their friends for the first time, simulating a familiar/fantasy football model. SideBets also keeps track of losses and wins as well as the exchange of virtual currency and occupies a unique niche as the industry’s only socially focused sports betting app. While the money is fake, both the competition and the interaction are pretty real.
Meanwhile, competing for virtual points may be fun but the above mentioned companies still have to cope with a big issue: monetization. Social sports betting companies must find ways of “making money” although the betting transaction is between peers and doesn’t involve real money.
In social sports betting there obviously isn’t a normal parallel gaming currency such as poker chips, which is why companies like BuddyBet and others have developed their own virtual currencies (Buddy Bucks), which users can cash out for their prizes. Another great monetization opportunity comes from deals with local businesses that can be involved in the redemption of peer-to-peer stakes. Finally, we have the advertising revenue, which is a stream that social casino operators have been unsuccessful at developing (for example only 5% of Zynga’s revenue is from advertising). Since there are far more major advertisers more interested in sport than in poker, this could turn into a significant source of income if social sports betting firms can rapidly scale audience growth.
So, will this actually work? The terms social and gambling converging under a single “umbrella” might trigger one of the greatest successes on the market as the potential is definitely there. We’ll just have to wait and see whether following Youtube’s “next big thing” formula is the right track for this concept. “Let’s see if the thing gets popular first and then the way how to make money will be figured out on the way”.
One thing is for sure, I’ll certainly “bet” on it!
Aviram Eisenberg, Entrepreneur and acclaimed speaker, Aviram Eisenberg is the founder and CEO of Ignite – a global software development company with headquarters in Israel that specializes Mobile, Web and Gaming Development. Under his leadership, Ignite delivered dozens of innovative projects for start-ups as well as for industry leaders such as NokiaSiemens Networks, Microsoft, VMWare, AT&T and MTV. On his entrepreurial road Aviram became a co-founder of “LottoShelli” – a fresh approach of the lottery service to mobile.