Live support
We are sorry, but support is not available at the moment.

How much is mobile gambling really worth?

POSTED BY Global Administrator
Now it may have come to your attention that last week we released a report on the mobile gambling industry. If that one passed you by, then: we released a report on mobile gambling last week. So now you know. Anyway, the top line headline in our release was that we anticipate that annual wagers on mobile gambling will surpass $48 billion by 2015. So far, so good. What happens next is that journos and subs the world over (I like to think) peruse this release and then morph it into 1,001 variations on this theme, including “Gambling on mobile devices to exceed $48 billion by 2015” and “mobile gambling to exceed $48 billion by 2015”. Here’s where the fun starts. The mobile industry, despite attempts by Apple to get it to smarten itself up and embrace the zeitgeist, is an old-fashioned beast at heart. It has a tendency to think along simple, straightforward lines: operators sell you voice, text and data; vendors sell handsets; content providers sell you, well content. And the value of a particular market equates to the value of the particular product or service being sold. So that when we say, “Revenues from subscriptions to mobile TV services will be $7 billion in 2015” the industry is happy: it reasons, correctly, that $7 billion is what Juniper Research believe mobile TV services will be worth in a few years’ time. The problem is that when it comes across the phrase “mobile gambling to exceed $48 billion by 2015”, the industry (or some of its august representatives) may then assume that gambling – being a mobile service – will be worth $48 billion and might conceivably draw one of two conclusions:  either that “that Holden fella is barking mad/possessed of a optimism that might make even Dr Pangloss quail”, or that “We’re in the wrong business, Ernie: forget selling data bundles for O2, let’s be moving to Gibraltar and setting up” Now, while the second conclusion might not necessarily be the wrong one, I would bridle at the suggestion that my forecasting is, shall we say, Laputian in its methodology. And yet – let’s be honest - $48 billion is a lot of moulah by anyone’s standards: the annual GDP of Bulgaria, or about five months’ revenue at Verizon. It’s also more than three times what the mobile music market (the most well established and lucrative of all mobile entertainment sectors) is currently worth. Worth. There’s that word again. And at this point I would urge you to strike it from your head, or at the very least, from the phrase “mobile gambling to be worth $48 billion by 2015”. Because it won’t be; but we do believe, very strongly, that the order of $48 billion will be wagered on mobile phones by 2015. Let me elaborate with the aid of the penny arcade at Hoburne Park in Paignton, Devon, upon which I, my fiancée, my two sons and two step-daughters descended last month. You are probably familiar with penny arcades, but for the uninitiated, you begin with a pile of two pence pieces (they’re known as penny arcades, but – inflation and all that). You then feed these into slots in the front of the machine in the faint hope of dislodging the huge piles of copper coins that hang tantalisingly/frustratingly (the longer you’ve been playing, the more apposite the latter adjective) over a ledge within the machine. Occasionally, you get lucky, and the machine pays out a hail of tuppences, sometimes accompanied by a plastic meerkat. You then feed the tuppences back into the machine (you give the meerkat to your step-daughter) and the whole cycle begins again, until you run out of two pence pieces or because one of your offspring is throwing a hissy fit because you won’t give them sweeties for the third time that morning. But the upshot of this is that the amount you wager typically greatly exceeds the amount that you had to start with: you may only have begun with fifteen, twenty tuppences, but by the end of even a short session, due to the recycling process, you’ve wagered fifty or sixty. An example which is more directly related to mobile: the UK mobile gambling company Probability recently noted that its average active customer spends 12 minutes per session on its services, and during a session spends an average of £52 on 43 bets; they also spend 2.5 sessions per day. This translates into a remarkable 30 minutes per day – often, as noted earlier, while simultaneously watching TV – during which time £130 is wagered in mobile slots, bingo (and for high-rollers, poker) over 107/108 bets. The bets are small (average £1.10 or so per time) but each play takes only a matter of seconds; in most cases, as with the penny arcade above, winnings will largely be recycled back into the game. Hence our $48 billion. For each particular subsector of mobile gambling, a proportion of this total will be retained by the lottery/sports book/casino in question: this is arguably closer in concept to the true “worth” of the industry, although in the case of mobile lotteries a further chunk may disappear in the shape of money set aside for “good causes” which those lotteries may regret is rarely allowed to be defined as the Staff Christmas Bonus, but there you go. Nevertheless, we are still talking about a multi-billion dollar industry here. So, Ernie, if you are thinking of jacking in those data bundles…