MOBILE GAMBLING ABOUT TO FLY HIGH

15 February 2008

29 percent increase in global revenues over past years


The bullish new report by Global Betting and Gaming Consultants on mobile gambling is currently receiving wide media coverage in the European business press, and reveals that revenue from gamblers placing bets through mobile phones has grown by 29 percent a year...a rate set to continue increasing for the foreseeable future.

Although the sector accounts for less than 1 percent of total gambling revenue, mobile gambling has been identified as the fastest growing platform for bookmakers such as Ladbrokes, Betfred and Bet365 and National Lottery operator Camelot, says Warwick Bartlett, the lead partner of the consultancy.

Bartlett identified three three important factors that power the growing success of the medium:

* Better mobile phone handsets and the innovative Apple iphone are more functional and sophisticated with better screens
and keyboards, enabling easier mobile gambling.

* Traditional online and offline businesses have now reached maturity and gambling companies are seriously looking for new
products that can reach new consumer segments. Many, and in particular majors like Ladbrokes, William Hill and Bet 365 are
investing in mobile gambling and their marketing spend will do much to promote this hitherto neglected segment of gambling.

* Software providers have listened to their customers and responded with much more user friendly and easier to navigate products.

Bartlett predicts the market will grow at 26 percent CAGR up to 2012 with Asia representing 67 percent of the total market being the leader. The UK will take 11 percent, and the rest of Europe 22 percent.

"The area where it's going to be big is sports betting," Bartlett says. Experts predict Premiership football clubs will soon form alliances with mobile phone and gambling firms to text supporters, asking if they want to bet on matches in real time. Ladbrokes has offered mobile-phone betting for seven years. The firm says 25 percent of bets placed on mobiles are taken during a sports event.

However, Bartlett warned that with almost 100 percent penetration of mobile phones in Europe, social responsibility is a key issue. The industry must be mindful that a large section of mobile users are under 18 years of age and KYC (know your customer) software is vitally important.

The media seized on the story, with The Guardian commenting : "Any time, any place, anywhere is the gambling industry's idea of paradise. To have punters placing bets, even if they are miles from the nearest laptop or high street bookie, is their ultimate fantasy. Thanks to rapid advances in mobile phone technology, that dream is now coming true."

The newspaper went on to claim that Britain's biggest gambling firms are launching new games virtually every week. The latest is Ladbrokes, which is releasing Deal or No Deal, based on Endemol's TV gameshow, specifically for the mobile market. This week also sees the launch of its first 3D slot-machine game from Spin3, Pub Fruity.

"We're going like the clappers," a Camelot spokesman told the Guardian reporter, adding that in three years, the Lottery operator has secured three million interactive users, with mobile phone players growing in number.

"It is only now the potential of mobile is beginning to be realised," said Ciaran O'Brien at Ladbrokes. "The challenge is to raise awareness of our offerings."

The Guardian points to possible problem areas, claiming that the industry has difficulties ensuring the correct version of games, with the right settings, are delivered to each handset. This is not easy because there are so many handsets on the market.

"Mobile users are concerned that accessing the mobile internet will lead to expensive data charges," explained O'Brien. "But the network operators are quickly realising the revenue potential from accessing mobile internet content is significant and are introducing more user-friendly data tariffs."

Martin Higginson, the entrepreneur who founded controversial ringtone firm Monster Mob, is now chairman of NetPlay TV - a quoted interactive gaming firm that is growing rapidly. Last summer, it launched its first Mobile gaming product, 'Quids In' (see previous InfoPowa report). Today it has more than 50 000 regular players generating in excess of GBP 200 000 a month. He says mobile-phone gambling will become 'a serious proposition' from next year. Today, he says, just 20 percent of Britons have the necessary third-generation mobile phones.

The Guardian report echoes Bartlett regarding the importance of social responsibility in such a widely available medium.

"As mobile-phone betting increases, questions inevitably will arise about checks made on players to ensure they are over 18 and that problem gamblers are rooted out. Camelot stresses that it is a socially responsible operator and that the barrier to entry is high, with players having identity and credit checks. Camelot uses Experian to verify players' creditworthiness," it reveals.

In a recent wide-ranging Gambling Prevalence study commissioned by the UK Gambling Commission it was found that 1.3 percent of the punters were potential or actual problem gamblers, once National Lottery players were stripped out of the figures. The most vulnerable groups were among black and Asian gamblers; those who were separated or divorced; and people with few educational qualifications. The forms of gambling causing the biggest problems were spread betting, fixed-odds betting terminals and betting exchanges - all recent gambling innovations born out of technological advances.

Footnote : Global Betting & Gaming Consultants (GBGC), has moved its overseas headquarters to the Isle of Man.

Commenting on the move, Warwick Bartlett said: "This reflects our need to be closer to our customers so that we can meet their needs in a timely fashion. More than 60 percent of our revenue comes from outside the UK and we felt a need to position ourselves in a way that serves our customers best. We looked at various other jurisdictions and found that the Isle of Man suited us best. The communications are excellent and the Manx government has a positive attitude to businesses setting up here."

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