This document discusses social casino games and whether they constitute gambling. It summarizes that while social casino games incorporate elements of chance like real gambling, they differ in that players do not risk anything of real-world value, can only win virtual currency to continue playing, and have no means of cashing out winnings. Though the lines are blurred, social casino games are intended for entertainment rather than the pursuit of real-world prizes through monetary risk, and are regulated differently than real-money gambling apps.

1. Social Games: is it Gambling?

2. RAF KEUSTERMANS
Co-Founder, CEO Plumbee
(Interim) VP Marketing Kobojo 2011
Independent Social Gaming Consultant 2010-2011
Global Marketing Director Playfish (EA) 2009-2010
Marketing Director EMEA Pogo.com (EA) 2008-2009
Head of Marketing Western Europe Unibet.com 2005-2008
Strategic Planner at BBDO, Grey and Publicis 1998-2005
raf@plumbee.com
Twitter: @raf_keustermans

3. Plumbee?
VC-funded social casino games startup.
Founded by 3 ex EA Playfish execs in 2011.
Based in Shoreditch, London. 35 staff.
Mirrorball Slots on Facebook (soon on iOS).
240K DAU, 1M MAU.
Average user is 52 year old, US woman.

4. Social Games
Image from CityVille, Zynga

5. What Is It?
Games using social graph
Fb/iOS Game Centre/OpenFeint/…
No End/No Winner
‘Multi-Player’ (real-time or turn-based)
Users always aware of others’ activities
Free (Ad-funded/Virtual Goods)
Image from menagamer.com, Restaurant Story

6. Games before 2008:
- Niche
- Big, But Closed Industry
- Brands & Non-Gamers Not Welcome

7. Number of gamers exploded:
2000: 250M
2012: 1B+
• New fast-growing ‘open’ platforms (Fb, iOS)
• Metrics-led design, new generation of game devs
• Broadband penetration
• Free!

8. A diverse audience
• 7 to 77
• F>M
• 30+
• ‘Non-Gamers’

9. Emerging Markets!
Brazil 2nd largest Fb
market after US.
India #3, Indonesia
#4, Turkey #7, Philippines
#8

10. Social Casino Games
• Free-to-Play Casino games growing fast
• Monetization 3-5x casual social games
• Zynga Poker annual revenue $300M
• It’s NOT about conversion to real money
• It’s NOT a marketing tool
• although it can help build a brand in
currently locked markets
• It’s VERY HARD to make it work (and expensive)
• Vertical becoming very crowded, also on mobile
• Top team & big bucks required to succeed

12. Gambling? Or Entertainment?
3 main elements of gambling:
1. Consideration: user ust pay ‘something of
value’ to participate (stake)
2. Prize: by participating, user can win
‘something of value’
3. Chance: outcome is not determined by
skill

13. Consideration (stake)?
• In social, free-to-play games, most users (95-
99%) never spend any money.
• Users get free currency in the game, via the
Facebook Page, promotions or via their friends
– E.g. in Mirrorball Slots user can get easily 2,000 coins
per day for free, while the minimum stake per spin is
0.1 coin...
• Most paying users spend to play more (buy
more time).

14. Prize?
• No cash-out.
• Users can’t get ‘real world’ prizes, they can
only win more game currency
(coins, chips, gems, medals, ...).
• Users ‘win’ 15-20 mins of fun, entertainment.

15. Chance?
• Guilty (for social casino games).
• Same for rock-paper-scissors. Or Yahtzee.

16. But what if...
‘something of value’ would also include...
Time?

17. Sure. Let’s call all board
games gambling.

18. More Evidence
• Not all gambling games work as social, free-to-
play games.
– Only games with an intrinsic ‘fun’ or social
element work: poker, bingo, slots are strong
enough to work as games without the monetary
element.
– Sports betting, most casino table games, ... are
too ‘mechanical’ and don’t work as free-to-play
social games.

19. Are the lines becoming blurred?
Financial Times, 7 August 2012

20. Nope.
• Big difference between real-money gambling
games and free-to-play games on Facebook
(and iOS): payments, compliance, licensing.
• Facebook and iOS gambling apps follow
existing gambling regulation.
• Gambling and ‘real games’ also co-exist on
the ‘open web’.

21. Raf Keustermans
@raf_keustermans
www.plumbee.com