Facebook’s Real Money Gamble

In August Facebook took a gamble and added a real money gambling application that is only available in the UK. Facebook has been struggling ever since the company’s IPO did not go as planned. Facebook is now looking for quick revenue sources which includes real money gaming. The new app called Bingo Friendzy allows players to wager real money instead of Facebook credits. For now the games will only be available in the UK and only to those over 18 which is the legal gambling age in the UK.

Like many apps on the site Facebook was not directly involved in the creation or operation of the real money gaming app. The company has permitted gaming giant Gamesys to offer the app to players. Many believe Facebook is testing the waters and will add more real money games if Bingo Friendzy is successful. Financial details of the agreement between Facebook and Gamesys are confidential. It is not clear whether the agreement will follow the usual 30/70 revenue split that applies to most Facebook games. A Facebook spokesperson told an interviewer from TechCrunch “Facebook is a place that allows people to connect and share. Real money gaming is a popular and well-regulated activity in the UK and we are allowing a partner to offer their games to adult users on the Facebook platform in a safe and controlled manner.”

In addition to the new real money games Gamesys also offers other Facebook games such as Sun Bingo and Heart Bingo. Many see the move into real money gaming as risky. In many countries, including the US, restrictions on internet gambling are strict. So far Gamesys has gone to great lengths to make sure that only legal players will be able to use the app. Before playing users must verify their identity, prove they are over 18 and are located in the UK. Facebook is making sure that ads for the games are not served to underage users. A Facebook source stated Young people are far more likely to see an ad for Bingo on the TV or in a betting shop window as they walk to school than they are on Facebook,.” Users outside the UK will not be able to see the ads.

The UK is the perfect test market for Facebook. The UK has strong gambling culture and a mature regulated online gambling market. Julien Codorniou, Facebook’s head of gaming for Europe, Middle East and Africa, told The Financial Times “Gambling is very popular and well regulated in the UK…for millions of bingo users it’s already a social experience [so] it makes sense [for us] to offer that as well.” In the meantime the Republican Party in the US has proposed a total ban on internet gambling and a victory in November could derail plans for legalization in the US.

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