Cellcos bet big on mobile gambling

26 Apr 2006

Mobile gambling is touted as one of the big revenue drivers for mobile data services in the next five years. But it's not easy money, and the house is the big winner, so the real value for cellos may be in 3G-based VAS packages that maximize 3G's multimedia channels to deliver a (ahem) rich experience

Mobile gambling isn't a new thing to the wireless industry. It's been around for years in one form or another. Early versions of mobile gambling services involved subscribers receiving SMS text alerts for things like lottery results or the latest horse racing odds. Then came proper betting services such as the Hong Kong Jockey Club's SMS-based betting service, launched in 2000, that allowed punters to use their handsets to bet on horse races.

Inevitably, the emergence of sophisticated handsets and advanced mobile data services is already taking mobile gambling services and apps to new levels. Today, users can download Java-based gambling apps over higher-speed wireless networks.

As 3G networks become mainstream and handsets with advanced Java and video capabilities, many believe that such trends will help mobile gambling grow sharply over the next few years.

One source of optimism for mobile gambling enthusiasts is, of course, the rapid rise of remote gambling on the Internet, which has opened up sports betting and casino-style gaming to a mass-market audience. With millions of consumers now gambling online, market watchers and industry players believe that the large gambling community spawned by the Internet will be replicated to varying degrees in the mobile data world, as the immediacy and perceived anonymity of the Internet is increased when using a mobile phone.

And with gambling already generating large revenue streams on the Internet, that could serve as a serious revenue driver for mobile data. However, just how serious it will be depends on who you ask.

Estimates on the size of the mobile betting market vary widely. Figures from Informa Telecoms & Media indicate that the global mobile gambling revenues will grow from $1.2 billion in 2005 to $7.6 billion in 2010, split across the chief categories of sports and spread betting, mobile lotteries and scratch-cards, and casino and skill games. Juniper Research is even more bullish, predicting that global mobile betting will grow from $2 billion last year to $19.3 billion by 2009, with mobile lotteries becoming the most popular form of mobile gambling.

Either way, Asia is pegged as a key market for mobile gambling over the next few years. Informa says mobile gambling in Asia will grow from $426 million to $2.7 billion by 2010, making it the second largest market for mobile gambling after Europe. Juniper Research reckons that Asia will see strong growth of mobile lotteries, due to the strong culture of lottery in the region - and because most lottery apps don't require 3G capabilities to succeed.

'Mobile lotteries don't need 3G networks and are applicable in developing as well as developed markets, and Asia has both,' says Bruce Gibson, senior consultant with Juniper Research. He adds that there will be strong growth in subscriber numbers in Asia, much of it at the lower usage end of the market - many of whom will be low stake lottery players.

However, that doesn't mean that mobile gambling is easy money.

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