

Mobile Gambling Use Explodes: 94% Growth Last Year - davidtyleryork
http://betab.ly/n4qhLz

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rabble
Guess it's one of those 3rd screen things, sit back, watch the game, and make
bets on your ipad. Not sure it's safe for the pocketbook, or the ipad if you
spill beer on it.

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davidtyleryork
I think it's both that, and the overall convenience of mobile. In the past,
you would think, "hey, I can bet on that!" and then you usually aren't near a
computer (or a casino). Now you always have your phone with you

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tomkarlo
Given that most estimates of mobile app growth (that I recall) are well in
excess of 100%, does 94% growth (lagging the overall market) in any way
constitute "exploding"?

~~~
davidtyleryork
Hey tom,

100% growth of mobile apps overall doesn't constitute 100% increased mobile
app usage, it just means more downloads. This is usage, meaning how much
people are engaging with the app.

Even so, given that mobile gambling is in its infancy and that serious
marketing dollars have not been put behind it to the same extent that it has
been put behind the app industry as a whole. We expect mobile gambling to
increase dramatically as things ramp up.

~~~
tomkarlo
Actually, both mobile app and mobile web site usage - not downloads - are up
well over 100%. On mature sites I've worked on, growth is clocking in closer
to 200-300% annually. So it does seem kind of weak to tout 94% growth when
anyone actually working on mobile looks at it. Even the CAGR over the 5 years
of 2010-2014 is currently projected in excess of 100%
([http://gigaom.com/2010/04/12/mary-meeker-mobile-internet-
wil...](http://gigaom.com/2010/04/12/mary-meeker-mobile-internet-will-soon-
overtake-fixed-internet/))

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jay_kyburz
David, I'd like to ask you some more questions off line. I can't see your
email address in your profile.

~~~
davidtyleryork
Hey Jay, my email is tyler@betable.com

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noduerme
Sponsored by... Betable? Never heard of them before. Interesting site. It's
like a license in search of a casino, instead of the other way around.

They did get it right, though... the gambling model is FAR more profitable
than any other gaming revenue model out there. The question (I guess) is
whether their dev market understands what they're actually offering and how
hard it is to achieve. My feeling is that the UK has made acquiring a gaming
license so effortless, and game developers are so locked into the current in-
world rev and/or app-based models, that no one's paying much attention to
this. There have been a few stand-out articles on the subject, like this one
from Bruce Everiss, a probable basis for their service:
[http://www.bruceongames.com/2011/01/28/gambling-as-a-
video-g...](http://www.bruceongames.com/2011/01/28/gambling-as-a-video-game-
business-model/) but basically it's been ignored. And will continue to be
ignored as long as the market becomes more fractured, and the largest segments
outlaw anything of the kind, and Silicon Valley continues to treat gambling as
a toxic form of revenue.

Nonetheless, I think there are serious issues with Betable's business model,
not the least of which is that they have no way to certify what the games
tying into their API are actually DOING, or whether they're fair. That lack of
auditing in itself seems to pretty much explode any reason to acquire a legal
license in the first place. What's the license actually get you, then, if not
auditing and regulation? An ability to take payments for gambling? How is it
legal, if it's not audited? How do they guarantee on behalf of the government
that the sites they're putting under their license are running fair and
legitimate games?

Again, this is basically a license in search of a new kind of casino. But why
wouldn't a new kind of casino, or gaming site utilizing that model, just take
Bitcoin or Linden dollars? Why bother with all this licensing at all,
especially if it's just window dressing?

~~~
davidtyleryork
Hey Noduerme, great comment, let me go over each point individually. There's a
lot to cover here!

First off, you are right on our high level concept. "A license in search of a
casino" is an interesting way of putting it. The key value that we offer to
gaming companies is the ability to leverage our gambling license.

However, you _severely_ underestimate the difficulty of acquiring a UK
Gambling Commission license. In order to get the licenses that we now hold, it
took us over 18 months and $1.5 MILLION. This does not include the corporate
structuring and other things that were extremely difficult to navigate through
as a first-time applicant. These time & money costs are simply too great for
the vast majority of small & medium sized game studios, and the compliance
issues get increasingly prohibitive as you get into larger studios and finally
AAA gaming corporations.

Interestingly, we were initially concerned with gaming industry's opinion on
gambling like you mentioned, but we have found that that perception is not the
case at all. The vast majority of responses are positive and the majority of
markets that games work in are open to gambling games.

As for ensuring fair & legal applications of our API, we go through every game
before it goes live with our platform and make sure that it is administered in
an appropriate way. Our goal is to grow the entire social gaming + gambling
ecosystem (or "social gambling games" as we like to call them), and unfair or
predatory practices only damage the ecosystem as a whole. We take this very
seriously and already have systems in place that let users set their own
limits on deposits & losses, as well as a gambling addiction hotline.

What our service provides is the ability for game developers to incorporate
real-money play into their games, including cash-out. We are audited by the UK
Gambling Commission annually and we handle all gambling aspects of the games
we partner with, so we essentially deal with all of the legal & financial
issues. Game makers can simply plug in our API and have access to a very
engaging form of monetization without overcoming the massive initial hurdles
and dealing with the ongoing compliance issues. We think this is a pretty
compelling value proposition for game developers.

~~~
noduerme
Hi. Okay, I guess I shot from the hip on these comments (chalk it up to
someone who's spent a few years navigating the regulatory world of online
gambling). I do think what you're trying to do makes for a pretty compelling
proposition to games developers, and as you seem to be shouldering all the
risk and cost involved, it would be difficult to refuse that kind of
monetization without any research or overhead, especially the kind required to
achieve the gold-standard UK license.

I do think $1.5M was a bit expensive for the license. Your T&C state: "the
“Game Rules” (which are different for each Game), which explain the specific
rules of the Game and are available on our Game Rules page [Note to the
Gambling Commission: we propose to do this in a similar way to other
operators, see for example <http://casino.ladbrokes.com/en/live-> dealer/help
and <http://www.partycasino.com/games/more-games/>. The games (and, therefore,
the rules) have not yet been finalised, but in drafting the rules we will
comply with the “Fair and open” provisions of the Licence Conditions and Codes
of Practice];"

This sounds like a pretty pricey pay-to-play for rules that aren't yet
finalized (i.e. the assumption being that zero games are yet licensed on your
platform). You could have done the same thing in Curacao for about $60k, or
Malta for around $250k.

The question of whether there's an ecosystem like what you're describing, or
whether that's something that can be astroturfed, is open, but depends on regs
outside the EU and to a large extent individual jurisdictions' willingness to
play ball, and the ability to move money rapidly through local payment
options.

This still leaves open the question of what happens to a guy in Russia who's
making money by hosting a game that's monetized through your site, with other
Russian players betting on it. While the UK might have no problem with that,
the Russian / Chinese / Vietnamese / Australian / Japanese / Norwegian /
French / Italian / Greek / Israeli (and lots more) governments certainly do
have problems with any casino that's not specifically licensed and regulated
separately under their own jurisdictions. So a local developer in those
markets may not be violating UK law or WTO regulations, but could still be in
deep trouble with their own local law enforcement. If Her Majesty's MI6 is
going to spring rebel iphone devs out of a Tajik prison for that $1.5M, then
it was well worth it =)

As with all things online-gambling, there's a murkiness in the system, because
one country's laws state that doing X is legal in another country, and that
this license permits it. Likewise, a Costa Rican data processing company is
fully within its legal rights to run gambling in the United States, as far as
Costa Rican law is concerned. We know how that usually works out.

I think -- and I'm not trying to be harsh, because there may well be a market
for this (although the HN crowd probably isn't hip to how or why exactly, and
you'd do better on a gambling forum) -- but essentially you've prepaid for
prestige by the truck-load and are hoping a market exists to rent a piece of
it. It'll be interesting to see if it works. I think it's hard for any company
to justify the price of a UK license w/o a huge volume in sportsbetting
already coming through the door. What you're potentially tapping into here is
an unknown quantity, and everything (legally) is in flux right now around the
world, so it's an interesting time to try it.

I wish you the best, and apologize for coming off as rude. I've got my doubts,
but look forward to seeing your progress.

~~~
davidtyleryork
Hey noduerme, Thanks for the kind words, and no worries, we love getting
feedback from smart people like you because it highlights developers'
potential concerns and also some issues that we should iron out in-depth
answers for.

So you know, we got the gold standard license is because we wanted to have the
gold standard and face as little legal/regulatory issues down the road as
possible. Our goal is to build a reputable, legal business that operates
everywhere that gambling is legal. We have international payment providers and
again, assume full responsibility for gambling, so developers have nothing to
worry about, regardless of where their game is hosted and where their players
are. We specifically cite that this is legal for US developers because
gambling is 100% illegal in the US, so this is proof that use of our API does
not violate local law.

That said, the legal issues surrounding this are definitely the primary
concern among developers. We've been thinking of good ways to communicate this
(other than company lawyers of the developing firm, which have given their
employer the all clear every time thus far). We hope that this will be
alleviated to some extent as the first games built on our platform go live.

We do have partners already building on our platform, such as Lucky Derby by
Toy Studio. See here for more info:
<http://www.toystudio.com/2011/08/04/lucky-derby-coming-soon/>

Thanks again for a great conversation, and definitely ping us here or via
email with any more questions (I'm tyler@betable.com)

~~~
yakto
> We specifically cite that this is legal for US developers because gambling
> is 100% illegal in the US, so this is proof that use of our API does not
> violate any law.

I'm having trouble parsing that.

~~~
davidtyleryork
I see why this could be confusing. Essentially, online gambling is 100%
illegal in the US, but we are working with multiple US developers whose
lawyers have confirmed that our API is legal to use. It is also important to
note that players must be in a legal gambling jurisdiction to play.

