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by kScope guest contributor
Andrew Hughes, CEO of AbZorba Games

My father once said to me, “Son, everything in life is a gamble. Just know the odds.”

Now that I’m an adult and working in the online casino games business, his words of wisdom are helping guide me (and those like me) through a fast-changing industry.

Gamers’ growing appetite for social and mobile casino app games
Social and mobile casino games are trending, and will continue to do so. Games such as blackjack, poker and bingo, to name a few, have become outrageously popular.

The mobile format in particular offers the “perfect storm” of smartphone penetration, network reliability and app popularity. Throw in live multiplayers, like we did with AbZorba’s Live Blackjack21, and it’s seriously a compelling format.

Its proper, grown-up gaming with proper in-app spending power. Average revenue per user (ARPU) can get in the double digits, and the lifespans are incredibly long! We’ve seen players spend up to $3,000 for virtual chips—chips that they cannot cash out!

Online gambling is a multibillion-dollar market, but what are the risks?
So, why should a perfectly good social or mobile casino game that is generating good revenue from virtual goods take risks by venturing into “real” gambling, as in gambling with real payouts?

Simple: money. Serious money.

Some say Facebook could be worth as much as $100 billion when, and not if, online gambling in the U.S. opens up. Even so, the total global value of online gambling in 2011 approached $30 billion, of which casinos, including poker and blackjack contributed 46 percent. Bingo grew at a nice clip, with $1.6 billion. That’s a 12-percent increase on 2010–in recessionary times! And, the global online gambling market is expected to grow to $46.1 billion by the end of 2015.

When the stakes are this high, we should ask ourselves a few questions:

• Who are these players?
• Do they want to move entertainment gambling (with virtual payouts) to real gambling (with real payouts)?

Land-based casinos and virtual casinos–a clash of titans
As the games industry debates what happens next, the real battles will not be between the likes of Facebook and Zynga but between the land-based and virtual gaming/gambling industries. Each titan is eyeing each other’s territory.

To the land-based casinos, social sites and mobile apps provide a massively untapped opportunity. They know how to build irresistible casino games. But why should the Zyngas and Playtikas of the social world “leave chips on the table”? These guys know the technicalities of social and mobile platforms, and the social hooks needed to increase virality in order to make hit online games. (A sign of the times: Caesars acquired Playtika last year.)

At AbZorba, we too have been inundated with requests from land-based casinos to reach our gamers. Why? Our gamers play live, in an authentic casino environment. They know that that competitive element encourages greater spend than single-player formats.

The questions remain for us all though: If online gambling does become legal, how do we bridge the divide between virtual and real currency? Can the two worlds co-exist? If so, should they?

I’m undecided, but one thing is for sure: As more land-based casinos move into the social and mobile arenas, and more social game devs contemplate creating casino games to “cash in” on this growing genre, the risks of disrupting this ecosystem are real and the stakes are high.

My father’s advice has never rung more true.

Editor’s note:

Earlier this week, we hosted a webinar on this space:
A Look at Building Irresistible Casino Social Games

Hundreds of people tuned in around the globe to hear Dave Bezahler, CEO of Blitzoo Games illuminate a very promising market. As with any gold rush, it’s not just about getting there quickly but about doing it right. We hope you gained insight into how to build social casino games that cash in on this lucrative market.

Want to hear any points again or share them with anyone? Register to view it.

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About the author: Andrew Hughes is CEO of AbZorba Games, a European-based casino games studio. He is focused on building great social casino games on mobile, internet and IPTV through apps. This is Andrew’s fourth start-up in the mobile space. He also also been heavily involved with the Mobile Marking Association. Follow Andrew: @arwhughes and @abzrobagames.