Movie studios, video-game companies and record labels are all in the process of extending their offerings to mobile-phone subscribers, so it’s no surprise that Internet gambling vendors are also researching the market as a new and growing opportunity.
“There’s just a huge demand for our technology,” said Jeff Halloran, president and chief executive officer of Phantom Fiber Corp., a wireless technology company that primarily serves the online gambling market.
Indeed, the intersection of wireless and gambling creates a significant opportunity, according to consulting firm Juniper Research. According to a recent study, the firm found that mobile-gambling services could generate $5.7 billion worldwide by 2006. The firm said casino-style services would total around $900 million, while lotteries and competitions would account for the rest.
The field of wireless players is already crowded. Phantom Fiber joins Casino Phone Technologies, Chartwell Technology Inc., Openlot Systems, Scaraboo and a variety of others in selling gambling technology and services to online gambling sites, wireless carriers and others.
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“We look at it (wireless) as an additional delivery mechanism for our clients to offer their gaming solutions,” said David Bajwa, head of investor relations for Chartwell Technology.
Almost any type of gambling is available to wireless users today. Technology companies have developed applications that allow mobile-phone users to play poker, bet on horses, play lotteries and scratch games, deal in blackjack and even try the slots. Such applications are designed for a variety of platforms, including Java-capable mobile phones, Palm- and Pocket PC-based personal digital assistants and even Symbian smart phones. Most of the services link back to an online gambling service, such as Betwwts.com, and allow users to access and manage their gambling accounts. Such applications typically offer password protection.
“We can put it all on one suite,” said Phantom Fiber’s Halloran.
Halloran said the company offers specialized technology that optimizes the wireless link between a device and a gambling server-ensuring that users have secure, speedy connections to their accounts. Halloran said the technology could be used for any secure, time-sensitive service such as access to insurance or financial information, but Phantom Fiber initially plans to focus on gambling due to the potential for significant revenues. Halloran said Phantom Fiber counts Real Time Gaming, Parlay Entertainment and others as customers.
Chartwell too is offering similar technology to online gambling companies. Bajwa said the company, which primarily offers software for Internet gambling, has been working in wireless for two years. Chartwell counts Globet International and Opera Telecom as wireless gambling customers and plans to discuss its wireless revenues for the first time in its second-quarter earnings.
However, wireless gambling companies face several significant hurdles-most notably the regulatory environment in the United States. Essentially, Phantom Fiber, Chartwell and others have written off the U.S. market for the foreseeable future due to strict regulations against interstate gambling. Instead, the firms are looking at business in Asia and Europe-specifically in the United Kingdom, which recently introduced loosened gambling regulations.
“The growth of the market is purely in the European region,” Bajwa said.
Other concerns are more monetary in nature.
“In the case of wireless, it appears to be an attractive distribution channel, although we’re not convinced the revenue model is ready yet,” said Nancy Chan-Palmateer, director of corporate communications for gambling software vendor CryptoLogic. “It is an industry that is changing quite rapidly.”
Chan-Palmateer said CryptoLogic has developed several wireless gambling applications, but has decided to shelve them for now until the market matures further. CryptoLogic counts Littlewoods Games, Ritz Club and others as customers.
