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According to Irish wireless consultancy, Alatto, mobile gambling (m-gambling) of some extent will be carried out by 4.5 percent of all mobile users globally within four years, giving operators a projected ARPU (Average Revenue Per User) of EUR78.
John Whelan, head of research at Alatto, said that m-gambling will be a lucrative niche for mobile operators. "It opens up the gambling market for them to people who probably don't have access to the fixed Internet or may not have a credit card," he told ElectricNews.Net. "In addition, we are increasingly seeing that more people, particularly in Southern Europe, have access to mobiles than they do to the Internet."
Whelan added that he felt EUR700 million was a conservative figure and although he believed the growth of m-gambling would be slow, it would eventually take-off, particularly with the availability of low wager products such as lottery tickets. "For instance, China Mobile, which has over 100 million customers, has recently allowed its users to buy lottery tickets via SMS," he commented.
According to Whelan, m-gambling will prove popular with mobile users because of its timeliness and convenience. "You could be standing in the pub and remember that you want to place a bet or heard something that would make you want to have a wager. With m-gambling, you can do that right there and then."
Whelan said that is unlikely that operators will launch their own gambling services, but will probably make their infrastructure available to branded bookmakers and gambling operations, and operate a revenue share.
Among the advantages for operators of mobile gambling over other electronic channels, said the Alatto report, is its ability to detect the location of users. This is important in determining whether a user is within a jurisdiction where mobile gambling is legal.
There are, however, some barriers that m-gambling will have to overcome, the most pressing of which is how will operators deal with accepting wagers and paying them out.
Alatto said that premium SMS would be secure enough for low value bets, while gambling accounts could be set-up for more serious gamblers. These accounts could be replenished either by vouchers or by credit/debit card over a fixed phone line, the report suggested.
"Once the likes of Visa and MasterCard come on-board and effective payment solutions become available then I expect mobile gambling to become one of the main drivers of mobile commerce," remarked Whelan.
Another difficulty for operators will be ensuring that mobile gambling is not undertaken by minors, particularly with the high ownership levels of pre-paid mobile phones. Alatto said that operators will need "sufficiently robust" authentication in place that ensures applicants to m-gambling services are the legal age to play them.
Alatto's report also recommended that operators develop gambling applications to suit the different gambling needs of those who bet infrequently in comparison to those who are heavy gamblers.
The report can be found at Alatto's Web site.
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