Gambling on SMS

A recent study from Juniper Research pegged the wireless gambling market at $18 billion annually by 2008. That may sound wildly inflated, but consider 2004, when online gambling took in more than $6.5 billion for casinos and other operators. In the U.K., where gambling on pretty much any conceivable event is legal, one company is combining the highly addictive and interactive elements of gambling with the coach potatoes' favorite activity — staring at a TV.

Zone4Play, which has a U.S. office in Delaware, earlier this year acquired MiXTV, which allowed it to extend its existing wireless gaming platform to the traditional broadcast market. In April, the company launched Broadcast SMS-TV Interactive fixed-odds betting together with The Poker Channel.

By sending text messages, users with accounts already set up can bet on a variety of propositions. In another scenario, subscribers could send a text message saying that they want to place a $10 bet on any number on a roulette wheel. From the carrier perspective, the service helps drive users to their premium SMS offering, which is required by Zone4Play.

“At first I thought in Europe, putting premium SMS rates would cause a lot of potential players to not play,” said Idan Miller, senior vice president of marketing and sales for Zone4Play. “But the reality shows that if the content is good enough, people don't care.”

The carrier also keeps about 10% of the revenue generated. (Zone4Play takes 50% and the other 40% is divided by the broadcaster, the producer and the SMS broker.)

In the U.S., the company has started supplying Cablevision with games for its iO digital TV service. And while wireless gambling remains illegal in most states, the company is talking to horse track owners and other content producers to figure out ways to blend SMS and game play. Additionally, Zone4Play is discussing with state lottery commissions a service where users could receive lottery tickets through their TV, with SMS.

“Whenever a TV program adds SMS to an existing program, the first thing that happens is ratings of the show increase,” Miller said. “You also create a new type of experience and of course the SMS response creates new income.”