Facebook considers supporting online gambling in the UK (rumor)

Facebook considers supporting online gambling in the UK (rumor)

Summary: Facebook is considering opening up the Facebook Platform to online gambling in the UK, according to a new rumor. This is to supposedly be an exchange of real money, not Facebook Credits.

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Facebook already offers a virtual currency option known as Facebook Credits, which is used extensively in Facebook apps like social games, but the social networking giant is also reportedly interested in supporting the exchange of real money in the online gambling market. The company wants to open up the Facebook Platform to online gambling, possibly as soon as in Q1 2012. This past summer, Palo Alto held exploratory talks with approximately 20 online gaming experts, consultants, and social gaming entrepreneurs, and now it's moving forward.

More specifically, Facebook is looking at handing out eight licenses, two per vertical, to the online gambling operators in regulated markets such as the UK, according to EGR. The company has drawn up initial licenses for different gambling operators: Gamesys, which has some 1.7 million monthly Facebook users and 888 are reportedly first in line. You read that right: gambling apps could soon start appearing on the Facebook Platform.

The talks appear to be limited to the UK since many states in the US ban online gambling. While Facebook will likely never support the US (unless the laws change), if the UK deal goes through, it will likely be run as a trial for other countries.

When exactly Facebook would allow gambling companies to launch such apps is unknown. It's also unclear how Facebook will verify the age and identity of players (beyond believing they aren't lying on their Facebook account), which payment solutions will be used to handle the money (again, Facebook Credits is apparently not playing a part), and what percentage Facebook will be taking from gambling operators.

Facebook takes a 30 percent cut of all revenue earned through Facebook Credits, leaving developers with the remaining 70 percent. Since it is still private, Facebook does not disclose how much revenue the company makes from the virtual currency, but it appears to be a growing percentage of its overall revenue. The social networking giant is currently testing Facebook Credits for websites.

Facebook used to be very strict when it came to advertising online gambling businesses on its platform. The company has since relaxed those rules – the Facebook Advertising Guidelines webpage has a specific online gambling clause under the Gambling and Lotteries subsection of the Ad Content section: "Ads that promote or facilitate online gambling, games of skill or lotteries, including online casino, sports books, bingo, or poker, are only allowed in specific countries with prior authorization from Facebook."

I have contacted Facebook and will update this article if I hear back.

Update: "We're always in discussions with companies about lots of different ideas, but we don't comment on future plans or speculation," a Facebook spokesperson said in a statement.

See also:

Topic: Social Enterprise

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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