US video game developers eye online gambling potential

Online gambling legalisation moves in Delaware, New Jersey, Nevada and other US states are creating interest in the US video game industry, where developers are considering the potential of a new source of business, the San Francisco Chronicle reported over the weekend.

The publication gives as an example the case of Reno-based 3G Studios, which has hired almost 80 contractors in India and China and expects to have 200 people dedicated solely to making gambling games by the end of the year.

3G is one of a handful of game makers jockeying for gambling business, which is expected to boom once legalisation is achieved the newspaper reports. In addition to building to its own games, 3G has teamed up with Bally to help the land casino supplier develop online offerings.

3G chief executive officer James Kosta says online gambling will draw bettors beyond the casino crowd, just as casual games such as “Angry Birds” attracted new players who would never log on to “World of Warcraft.”

“Gambling is fundamentally going to change from something where you had to sit in a casino and physically spin the wheel, to something that you could do casually while you have a three-minute break at work,” he said.

3G already has a ‘first person shooter’ game on Facebook titled ‘Brave Arms’ and plans to open an online slot machine site in August. Americans will play for free with virtual currency until it is legal to wager cash, Kosta says, while European customers will be able to play for real money.

Kosta says 3G will profit as nongamblers begin to place small bets on casual games. He anticipates the studio will invest $5 million in its gambling business over the next few years. Even if online betting is slow to come to the United States, he expects the investment to pay off as game players in Europe and elsewhere warm to the idea.

“When people are going to be willing to bet $5 or $10 a week – when you get 140 million of those devices together, it’s going to make for a whole lot of money changing hands every week,” he said.

Not everyone agrees with Kosta’s optimism; John Acres, founder of casino consultant group Acres 4.0, says game studios are wasting their efforts. Acres supports his argument by opining that legalisation will bring with it onerous regulatory and testing requirements so restrictive and expensive that most tech companies will not be able to make reasonable profits

“It’s not a matter of tech but a matter of licensing,” Acres told the newspaper. “States must provide licenses for Internet gambling, and the process will be lengthy and complicated.”

He added that the deck is stacked in favour of major land gambling companies that already have licenses, such as MGM Resorts and Caesars Entertainment, or already well-established casino supply and games companies like IGT, Bally and WMS.

Orrin Edidin, the CEO of IGT’s new online gambling subsidiary, Williams Interactive, told the Chronicle that having slots both online and in the real world could attract new customers for casinos.

“We help build a community of players that you can market to convert from free-to-play to pay-for-play,” he said.