Chris Nuttall Betable offers game developers real-money gambling

Persuading players to pay real money for virtual goods represents the biggest challenge for developers and publishers pursuing the “freemium” business model in social gaming.

But introducing real-money gambling would improve the odds dramatically of building a viable business and be a real game-changer for the industry, according to Betable, a real-money gaming platform emerging from stealth mode today with the backing of some of Silicon Valley’s best-known investors.

Social gamers produce only around $1 per user per month in revenues, while average revenue per user for casino players is $300 per month, says Christopher Griffin, chief executive and founder of Betable.

Enabling small developers, or a company like Zynga with 250m monthly users on Facebook, to plug into casino-style gaming could give a dramatic boost to their revenues and represent a major challenge to incumbent offline gaming companies.

Betable is offering such a platform – taking care of all the difficult backend stuff of taking, calculating and paying on bets, while ensuring security and legality for game developers that use it.

Betable formerly competed with Betfair in the UK in social peer-to-peer gambling, but Mr Griffin decided to reinvent the company as a platform around 18 months ago. It would take that length of time or much longer, he says, for developers individually to win licences and develop the technology for taking bets.

Betable already has a licence from the UK Gambling Commission, a headquarters in London and offices in San Francisco.

Offering online gambling to US residents is illegal, but Mr Griffin sees the opportunity as being the rest of the world – the source of 30 to 60 per cent of the audience for game developers already.

“The market outside the US is so big, we don’t care about [the legalisation issue],” he told the FT. “Even without the US, we can be the biggest gaming company in the world and our partners can be incredibly successful. The ex-US real-money business can be far bigger than the global virtual goods and currency business.”

Betable says developers can work real-money casino-style gambling into existing games. For example, FarmVille players could pull the handle on a virtual slot machine to see if their harvest produces real or virtual currency – or nothing.

All gambling aspects would be handled by Betable, with players having a Facebook Connect-style single sign-in that gives access to their stored funds.

“We will be generating all the gambling revenue and then we are effectively paying the developers a cut of that for sending us players,” he said.

Mr Griffin did not disclose the percentages, but Betable will take north of the 30 per cent currently earned by Facebook from money spent on games. “It’s a pretty even split, we obviously do far more than a typical platform like Facebook does, so we think it’s very fair,” he said.

Betable has been working with a handful of developers in its alpha stage and Monday marks the opening of a wider beta programme, as well as the announcement of its seed funding.

Investors include the Founders Fund Angel fund, Greylock Discovery Fund, Las Vegas Sands Corporation, True Ventures and individuals including Dave Morin of Path and Howard Lindzon of StockTwits.