As president of a company that just came out with a game on Facebook called "Sports Casino," Matthew Cullen is surprisingly OK with the prospect that the U.S. is not likely to see legalized online gambling anytime soon.
Cullen's company, RocketPlay does, however, has put money on the odds that sports betting will be very popular on Facebook and other social platforms. That's because their game is free to play and involves betting with virtual currency, not the real kind.
In many other respects, however, "Sports Casino" resembles many real-money online betting services that operate legally in the United Kingdom, where RocketPlay is based. Players can place bets on the outcome of hundreds of sports matches in college and professional football, baseball, hockey and basketball. (The company plans to add auto racing, cricket, rugby and other sports.)
They can also place bets while a game is happening. Will Matt Kemp hit a home run at his next turn at bat? Will USC score a touchdown during its next drive? RocketPlay's betting system calculates the odds for each bet in real time, adjusting its payouts to the moment-to-moment action in the game.
In Europe, where these types of play-by-play bets are much more common than in Las Vegas, about 80% of overall bets are placed after a game kicks off, said Cullen, who knows this because he previously worked as a vice president of Betfair, a real-money online betting company in the U.K.
Once players run out of virtual currency, they can wait for the currency to slowly replenish over time for free. Or they buy more currency with real money, which is how RocketPlay plans to generate revenue.
"Sports Casino" is part of a suite of games in which betting is one component. In between sports matches, RocketPlay offers its players five other casino games to fill the idle time and keep its customers engaged.
One of those games is poker. Why?
"The audience for poker and sports betting are nearly identical," Cullen said.
It's no surprise, then, that RocketPlay partnered with Zynga, whose Texas Hold'em poker game is the most popular on Facebook. The agreement calls for Zynga to publish RocketPlay's games both on Facebook and on Zynga.com, where Zynga can drive traffic to RocketPlay's games in exchange for a piece of the revenue generated by those titles. The specific terms of the publishing deal, however, is confidential.
Zynga and other social gaming companies are eager to learn more about online gambling, which is said to generate more than $30 billion a year in revenue worldwide, roughly three times the annual sales of social games. Facebook this summer worked with GameSys to launch a real-money bingo game in the U.K. called "Bingo Frenzy."
In December, the U.S. Department of Justice issued a memo suggesting that selling lottery tickets across state lines over the Internet might be considered legal under the Federal Wire Act. Some in the gaming industry believe that to be an opening for online poker in the U.S. involving real-money stakes, and possibly other forms of online gambling.
But Cullen says that day is so far off that he's not willing to bet any money on that prospect.
"That's just fine with us," he said. "If the market remains closed to real-money betting here, that will be good for us, because that will mean people will play with our offering instead."