Facebook is considering opening up the Facebook Platform to online gambling in the UK, according to a new rumor. This is to supposedly be an exchange of real money, not Facebook Credits.
Facebook already offers a virtual currency option known as Facebook Credits, which is used extensively in Facebook apps like social games, but the social networking giant is also reportedly interested in supporting the exchange of real money in the online gambling market. The company wants to open up the Facebook Platform to online gambling, possibly as soon as in Q1 2012. This past summer, Palo Alto held exploratory talks with approximately 20 online gaming experts, consultants, and social gaming entrepreneurs, and now it’s moving forward.
More specifically, Facebook is looking at handing out eight licenses, two per vertical, to the online gambling operators in regulated markets such as the UK, according to EGR. The company has drawn up initial licenses for different gambling operators: Gamesys which has some 1.7 million monthly Facebook users and 888 are reportedly first in line. You read that right: gambling apps could soon start appearing on the Facebook Platform.
The talks appear to be limited to the UK since many states in the US ban online gambling. While Facebook will likely never support the US (unless the laws change), if the UK deal goes through, it will likely be run as a trial for other countries.
When exactly Facebook would allow gambling companies to launch such apps is unknown. It’s also unclear how Facebook will verify the age and identity of players (beyond believing they aren’t lying on their Facebook account), which payment solutions will be used to handle the money (again, Facebook Credits is apparently not playing a part), and what percentage Facebook will be taking from gambling operators.
Facebook takes a 30 percent cut of all revenue earned through Facebook Credits, leaving developers with the remaining 70 percent. Since it is still private, Facebook does not disclose how much revenue the company makes from the virtual currency, but it appears to be growing percentage of its overall revenue. The social networking giant is currently testing Facebook Credits for websites.
Facebook used to be very strict when it came to advertising online gambling businesses on its platform. The company has since relaxed those rules – the Facebook advertising guidelines webpage has a specific online gambling clause under the Gambling and Lotteries subsection of the Ad Content section: “Ads that promote or facilitate online gambling, games of skill or lotteries, including online casino, sports books, bingo, or poker, are only allowed in specific countries with prior authorization from Facebook.”
Last week, Zynga Casino, which operates Facebooks' play-money casino games, announced via Zynga Casino General Manager, that the company was satisfied with its profits form its play-money poker format and would not change its current business model. "We are in the virtual goods business and we have been able to create a good buisness for ourselves like this, so we have no plans to enter the real-money market."
A spokesperson for Facebook said: 'Our commitment to providing a safe, secure and appropriate experience for teenagers is a fundamental principle of Facebook.
'The suggestion that we would make any decision that doesn't carefully consider the impact on this audience is short-sided and, frankly, offensive to the hundreds of people who work to keep kids safe and the many parents at Facebook. Beyond that, we're not going to comment on the multiple layers of speculation occurring here.'