A small German Internet company has managed to achieve the improbable: having some 500,000 users worldwide bet online without breaking any laws or owing any proceeds to the state. The company is the Berlin-based Crowdpark and the game is Bet Tycoon, a Facebook-only game launched in April 2011. And while 500,000 monthly active users is nowhere near the 70 million mark set by Zynga’s Cityville, the most played Facebook game, Bet Tycoon has certainly carved out its niche. It may very well be creating something else too – a shift in the way people bet.
Bet Tycoon uses the business model brought to prominence by the many Zynga games which compel millions of people to tend to their virtual crops or play Texas Hold’em with strangers from across the globe daily. The game itself is free to play and uses virtual currency but includes an option to buy this currency for real money to fast-track progress, buy exclusive items or customise the playing experience. In the case of Bet Tycoon, virtual dollars are used to place bets, as well as pay out winnings. And for the players for whom the initial amount is not enough, there is also an option to buy virtual credits with real money.
Also borrowed from Zynga is the style of the game: instead of the ordinary approach to the interface most real-money online betting operators present to customers, Bet Tycoon presents itself in a cartoonish, stylised way. Bet Tycoon offers a myriad of sports events to wager on, but in addition to traditional sports players can choose from dozens of events from the realm of politics, business, technology or show business. At the time of writing, popular bets were on such events as Obama’s approval rating, best performing US stock market, Occupy Wall Street holding out for another month or Justin Bieber’s fatherhood. Players can also create their own private bets on just about anything under the sun to be shared with friends for fun.
As they play, users are incentivised by levelling up and winning virtual goods. By emphasizing the fun aspect of betting, Bet Tycoon promises to give a new perspective on the activity to the large demographic that normally does not take part in it or is not able to enjoy it due to legal restrictions. Even if the game does not prove to be a game-changer for betting in the way Facebook games were for gaming in general – converting millions of non-gamers into casual gamers – it is certainly a pioneer in bringing online wagering to the masses (including many non-punters).
Bet Tycoon has also developed what it claims to be another innovation in betting: their Dynamic Betting technology for real-time wagering without fixed odds, pending patent in the US. A step-up from live betting of sorts, Dynamic Betting permits players not only to place a bet, but also to cash out at any time before or during the event. A profit can be realised even before the event transpires because the value of stakes keeps changing depending on the stakes of other players, creating an experience akin to ‘gambling’ on the stock markets.
Apart from further developing its micro-payments business model, one of the long-term goals of the company is licensing white label versions of its games to i-gaming companies. If all goes to plan Bet Tycoon could provide the catalyst for a real breakthrough in social betting.
I-gaming firms have been skirting round social betting for a number of years now. One early version was Gottabet, founded in 2006, which styled itself as the social network for betting. Gottabet used its own currency called “peanuts” which had no monetary value but also offered cash bets too. User had a profile page and could set up their own bets with friends. All sound familiar?
At the time example bets included “the number of people Jack Bauer will kill in Season 6 of 24” (yes, it was that long ago); “Chris Moyles will leave Radio 1 in 2007” (he’s still there in 2011), “I can go without alcohol for a week”.
But the timing of Gottabet’s launch was unfortunate, coming shortly after the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA) in the United States in October 2006. Suddenly, investor interest in online gambling evaporated. Gottabet morphed into Bragster with an emphasis on dares and bragging rights (“Jackass meets Facebook”), quietly dropping the “betting” element. After some further funding and acquisition, Bragster closed in mid-2010.
The timing might be different for Crowdpark and the market might have changed in the intervening years. Crowdpark has received a total of US$ 8 million in funding from its investors, after gaining US$ 6 million in additional funds from existing investors in late 2011. Its founders, however, will not be drawn on whether, for all its users, it is profitable yet. As any tycoon worth their fortune knows, ultimately profit will be the number that matters in the long-term.