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No money in gambling

1/3/08

I once had a boyfriend who was a church junkie. He couldn't walk past one. He’d have to stick his head inside and have a look.

My addictions are more normal. Shoes, Starbucks and online poker. Poker is the new Golf: it’s what men do to get away from women and do business deals. Online poker is sums, stats and psychology. It seems logical that gambling will go mobile. Indeed it already has: Boss media is big in mobile gambling.

Strange then that you’ve never heard of them?

Numbers look huge,  $6bn spent in Europe. But when you investigate further it starts to unwind: That figure is turnover. The margin on gambling is small at around 5%. If  billing for mobile gambling is handled through the operator they will want 20% of turnover and suddenly the sums don’t add up.  And it’s only over 3m subscribers, something like $2,000 per active gambler  spread across  Europe. A tiny proportion of the mobile owning public. Some gambling WAP sites have tens or hundreds of users. No single network has enough gamblers to make the area attractive.

Networks dislike billing because a £500 gambling bill makes phone services seem expensive, people like to spend about £25 a month on their mobiles. When the customers get a big bill they cut down on the minutes next month and the networks make a lot more than 5% on those.

Gambling is a legal minefield.  Gambling tech companies grow from country to country following the legislation rather than the operators footprint, technologies or languages.  All code needs to be legally approved and certified.  This is not an area for established games players like Glu and Jamdat. It’s easier for the gambling companies to learn about mobile. Still  a major learning curve.

It will happen though. The Hong Kong Jockey Club takes more bets on mobile than on the internet. During a busy sporting week like the Cheltenham Gold Cup Betfair’s web site will handle more data traffic than all the European stock exchanges combined.

We live in a world where the operators are desperate to drive mobile data adoption and gambling might just be the (other) vice that does it.

It didn’t work out between me and the religious boyfriend. We just didn’t understand each other. It will be interesting to see if the mobile operators and the gambling companies can understand each other well enough to make that relationship work.  I bet it will, but don’t expect the results to show anytime soon. The two industries might be growing fast but the gestation period for offspring will be many years down the line.

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