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Wednesday, May 29, 2013

Australian Senator Is Stunned To Find That Facebook Virtual Currency Gambling Is Not Regulated

Well, I never thought that the first political and legal challenge to Facebook gambling virtual goods and currency games would come from down under.  I have written several blogs about the loop hole in gambling law that considers cash payout as the only form of “consideration” and not other forms of payout such as virtual goods or virtual currency.

Apparently, Senator Nick Xenophon sees things differently after spending money on a social casino game site in Facebook and not being able to get his conventional money equivalent for the chips he won and obviously lost. I suspect with Zynga’s (ZNGA) public debut on  NASDAQ,  the soon to be listed Facebook IPO,  the onslaught of gambling companies putting their “cash” gambling propositions into Facebook taking advantage of US legal Internet gambling  are events that will put the virtual currency legal loophole into question.

The European gambling sites are just now realizing that they may be able to make more money using virtual currency as a transaction currency instead of conventional currency. There is no age restriction on buying virtual currency and using it to play Facebook “credits” gambling games creating a much bigger market for them and less regulation to deal with.  Anyone can buy these credits, wager on a gambling site and never see a single dollar, pound or euro as a result of their play. It all stays with  the gambling operator minus the 30% that Facebook takes on these transactions.

Certainly the legalization of gambling in the US is a big deal and gambling sites are all over this building, buying  and launching their own Facebook conventional gambling games with the hope  of capturing Facebook gambling market share.

These same gambling operators may be the ones that challenge the off the books gambling revenue being scooped up by virtual currency and goods gambling sites once they realize that a significant portion of there expected revenue and players are still tied up in playing virtual currency/goods gambling games.

I would make a wager that a US state or federal politician is going to float a bill in the next year that makes virtual currency gambling sites to play by the same rules as the “real” gambling sites.

Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes extensively about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications.

Australian Senator Is Stunned To Find That Facebook Virtual Currency Gambling Is Not Regulated

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