It looks more and more as if the United States will pull the plug on its ill-advised ban of online gambling later this year. This morning, the House Financial Services Committee voted 41-22 in favour of a measure that would regulate, but legalise online poker and some other forms of gambling.
It’s an obvious move for the federal government, which could make money from taxing the activity, and can’t hope to prevent it anyway. It would be a huge win for online poker sites that had their businesses devastated by the 2006 ban.
Another, less obvious winner from a repeal: social gaming companies.
With 28 million monthly active users, Zynga‘s Texas HoldEm [sic] Poker is the most successful Facebook game not named FarmVille, and it’s far from the only gambling themed game on the platform. Just today, Playdom, fresh of its acquisition by Disney, announced a branded poker game with World Series of Poker.
Obviously, these games are played with play money for now, but a source close to Zynga tells us the company is keeping an eye on the legislation, and that it would be excited to move into real-money poker given the opportunity.
Indeed, social gaming companies would be crazy not to take a look at this. The real question, however, is whether Facebook will allow gambling on its platform. Unlike the game developers, which are far less well-known than their games, Facebook needs to be very careful with its brand. Despite all the recent privacy noise, Facebook maintains a much more wholesome image than its competitor on the wrong side of the tracks, MySpace. That’s incredibly valuable.
Facebook won’t comment, telling us that it’s “too early to speculate or get caught up in hypotheticals.” We think Facebook could find a way to keep gambling tucked away without compromising its image too much, and that the potential revenue would be too great to ignore.
But if Facebook does decide to keep this activity off its site, it will no doubt find itself in a fight with developers that makes the row over Credits look like a minor scuffle. And it will be a big opportunity for other social gaming platforms.
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