Is ‘Social’ The Future of Online Gambling?

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The figures for social gambling are impossible to ignore. Morgan Stanley forecasts a $2.5 billion social gambling market by 2015. Does ‘the social’ represent an exciting new arm for the industry, or a scourge that will cultivate addiction and convert underage users into problem gamblers?

In simple terms, social gambling implies interaction between networked gamblers via social platforms. Beyond that, nothing is absolute. Social gambling runs the gamut from games of strategy like poker and (recently) sports betting to discernible house-edge games including roulette, blackjack and slots.

These house-edge games in particular owe a great deal to the social gaming industry in terms of their monetisation strategies. More than half of Facebook users currently play social games such as Farmville, exchanging cash for in-game currency. Rather than paying for content, social gamblers buy credits for their bankroll or bet directly with actual money.

Evidently, social gambling involves crossover between two mutually-supportive markets with a huge shared user base. And now that companies have smelled the profits, the market is primed to explode. But what are the dangers?

Disreputable affiliate websites and operators already use social media platforms to disseminate bogus ‘systems’ for table games like roulette. These strategies depend entirely on the ‘gambler’s fallacy': the superstitious belief in winning or losing ‘streaks.’

It is arguable that social gambling, which already uses social media as a platform, will present a tempting prospect for affiliates and operators to promote supposedly winning strategies to millions of users, encouraging irresponsible play. This is one of many controversies that plague the representation of social gambling in the media.

The Great Debate

Recently, Paddy-Power’s In-Play has introduced sports betting to Facebook. It’s likely that this and similar services will provide a fresh marketing channel to tipsters, perhaps even allowing players to mirror the bets of ‘insiders.’ 

Paddy Power In-Play

While this highly social and integrated sports betting network would provide a clear benefit to users, there is also the potential for exploitation. Operators and affiliates, presenting themselves as sports tipsters, might control the flow of bets via social platforms, limiting the capacity of individual betters to make their own decisions.

This is not the only potential source of player exploitation raised by social gambling. There are a variety of free-to-play casino games available online, providing the gambling ‘experience’ without the risk of losing money. Some critics have argued that these free games ‘teach’ underage players the rudiments of casino gaming, eventually converting underage users into paying customers.

According to a report from the Gambling Commission, an estimated one in ten 11-12 year-olds regularly play free virtual casino games. To many onlookers, this presents a serious danger of inspiring compulsive gambling in later life. This is especially troubling considering that one in five under-18 year olds in the UK have gambled online, according to a study by the National Lottery Commission.

Vanessa Zainzinger of The Next Web provides food for thought: “Will young users be in danger of being lured into gambling, when they otherwise wouldn’t be exposed to it? Will Facebook turn itself into a casino? Are we trivializing the dangers of gambling, by putting it into a playful environment?”

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It has been suggested that free games with casino-inspired elements on social platforms foster an acceptance of gambling and introduce underage players to the ‘rules of play’ for casino games, hastening their transition to real-money gambling. As a result, these games might serve as a ‘gateway’ to problem gambling.

Accessing the validity of this concern, Dr. Carolyn Downs of Salford University took the social networking forum Fluff Friends as a case study. On the Fluff Friends forums, users (typically young girls) create ‘Fluff Art’ by earning ‘munny’ (sic) – virtual cash comparable to ‘Facebook credits.’

Although no actual money changes hands, Dr. Downs argues that young subscribers imbue ‘positive attitudes toward gambling’ through this site.

Following Dr. Downs’ position, Dr. Mark Griffiths suggests that ‘money-free’ gambling “plays an important role for adolescents in conceptualizing and experiencing internet gambling.” He reports that one in three British adolescents regularly gamble online “in money-free mode” concluding that “it is through money-free gambling…that children are being introduced to the principles and excitement of gambling without experiencing the consequences of losing money.” As a result, underage users are introduced to the rudiments of gambling without learning to appreciate the gravity of losing.

It must be acknowledged that all of this research is speculative. It has not (as yet) been definitively proven that exposure to casino-style games makes underage players more likely to gamble in later life. In fact, the aforementioned National Lottery Commission study found a 7% drop in underage gamblers online since 2008, suggesting that the recent prevalence of free casino games has not had an adverse effect on youngsters.

The Gambling Commision is currently conducting a new ‘environmental scan’ of how the gambling industry promotes gambling opportunities using social media, including who is targeted and how access to the gambling product is provided. Evidently, the hunt for a definitive link between social gaming and problem gambling goes on.

Gamblers vs Gamers

Social gambling follows a wider shift towards convergence in entertainment industries, drawing on the casino and gaming industries simultaneously.

An increasing number of media and entertainment services have begun to merge and integrate: most media conglomerates have fingers in a number of pies, including music, web content, film and television. Social gambling is a fresh, popular and controversial example of this trend towards convergence.

Both gaming and gambling are entertainment industries that depend on players’ competitive instinct; the desire to overcome competition to succeed. Moreover, both industries have faced criticism, particularly regarding their perceived negative impact on children. Currently, the social gambling model represents greater reconciliation than ever between these categories, with social gambling developers increasingly strive for a ‘fun,’ ‘engaging’ and ‘gamey’ experience with a greater emphasis on visuals and interactivity.

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Raf Keustermans, CEO of social casino game studio Plumbee, argues that “the main job for a game studio is to create a fun experience.” This is all very well, but it should never be forgotten that money exchanges hands in these games. If social gambling is to have a future as a legitimate service, it must be proven that its colourful façade does not disguise disreputable practices. For instance, could an aesthetically-pleasing interface paper over deliberately obtuse withdrawal conditions? Might an engaging mini game in a video slot  serve as a handy distraction from an insurmountable house edge?

This emphasis on player engagement suggests that social gambling is casting a wide net, aiming to attract casual players, more interested in a good time than an opportunity to net winnings. Christina Thankor-Rankin (Gaming Consultant at Operations) identifies two types of users who might engage with social gambling: gamers and gamblers. In a somewhat laboured metaphor, she compares these two breeds of users (respectively) to carnivores and vegetarians:

“Offering social to gamblers is a little like offering Tofu or some other soya/protein based meat substitute to a meat eater – it might look like meat and feel like meat, and perhaps even taste a bit like meat, but it’s not meat – it’s not what they want.”

And by contrast:

“…social gamers are the veggies. They are not interested in real meat, but they may occasionally dabble in something which looks and feels and sometimes even tastes like meat – but safe in the knowledge that it isn’t.”

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The upshot of Thankor-Rankin’s argument is that gamblers and gamers are ultimately motivated by different desires and seek different experiences. While there may be some overlap and shared interest in ‘social gambling,’ their basic allegiance is with one entertainment service or the other.

If true, what is the future of social gambling? Is it condemned to the no-man’s land between gaming and gambling, host to the occasional stray from both camps but favoured by neither in general?

There is a clear weakness is lumping users into two categories with fixed, core desires. While there will always be players primarily out to make a buck and others looking to be entertained, social gambling is a broad enough category to suit both requirements.

Seasoned gamblers will surely appreciate the capacity to share tips and strategies via social media, while the popularity of low-stakes slot games suggests that gamers are up for the odd flutter. In fact, many social gambling developers depend on this latter assumption.

Christoph Jenke, COO of social betting game start-up Crowdpark, takes that social gambling is distinguished from real-life gambling by its ‘casual’ nature:

“Social gambling is so different from real-life gambling because users think of it as casual games. The amounts of money placed are far smaller, and the pull of casinos – dark halls with lots of noise and flashing lights – doesn’t exist. Social games do try to elicit the addictive factor, but it’s far more playful.”

There is certainly a market for players with less investment in casino culture to benefit from ‘casual’ social games, but this does not preclude experienced gamblers from enjoying social sports betting and strategic table games.

Ultimately, we will start to see a higher number of active gamblers overall, with individuals having different levels of investment in traditional casino culture. The bottom line? Social gambling has cracked the walls of the casino. We will start to see more people gambling, while gambling as a whole will become far more visible.

Gamblers Concealed, Gambling Exposed

Gambling is generally understood to be an insular pastime, conducted in a back-alley card room or under the dim-lights of the casino. Social gambling could change everything.

Social Gambling

The term ‘social gambling’ is somewhat misleading. Gambling has always contained a social element, from the gaggle of punters sharing tips at the dogs track to the crowds of elderly women in the bingo hall. The only new development is that contemporary social gambling is highly conspicuous. Where the walls of the bookies and the casino are opaque, the internet is transparent.

It has been argued that social gambling reveals and normalises a potentially destructive vice that should remain concealed and taboo. Individual gamblers can hide behind their avatars but the gambling contingent in society is exposed through social gambling. Anyone can trawl Twitter and Facebook and see evidence of gambling.

At the same time, forcing gambling into the light of day may well dispel its sordid reputation, ushering in a bright future of fun, social and sharable gaming where individuals with a proclivity towards addiction need not ‘suffer in silence.’

Furthermore, it is debatable that all social games are truly social. While players in a blackjack chat-room certainly engage in collective gambling, it is doubtful that their interactions are genuinely ‘social.’ After all, it’s difficult to socialise with an avatar and a few lines of text. Conversely, In-Play subscribes engage in a real social discourse, sharing tips and ruminating over betting odds.

Only time will tell how social gambling might affect the public character of gambling as a cultural practice.

One thing we can be sure of is that social gambling will remain operative in the future of online gaming. It remains to be seen how this industry will develop, interact and evolve alongside existing services.

What is Social Gambling?

  • The term ‘social gambling’ can refer to a number of different services, but as a rule it means online gambling played via social media platforms like Facebook instead of through a dedicated casino website
    A number of different game types have been embraced by social gambling, including:
  • Poker (e.g. Texas Holdem Poker)
  • Slots (e.g. Slotomania)
  • Bingo (e.g. Bingo Blitz)
  • And recently, sports setting (Paddy Power’s In-Play)
  • The difference between social gambling and social gaming is that in social gambling, players wager cash in hope of winning more (put simply, they gamble), whereas in social gaming, players pay money for additional content and do not stand to win any cash.
  • Social gambling is currently an £1.8 billion industry and Facebook’s top five casino games draw 11,240,000 users daily.

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