Betable raises new round for real money gambling platform
Real money gaming tech company Betable has raised a new round of funding led by Venture51, according to several people familiar with the situation. The round is for $15 million to $20 million and values the company at between $80 million and $100 million. Betable declined to comment.
In 2012, Betable pivoted to real money gaming from its first iteration as some sort of stock exchange for betting. During the pivot, Betable offered to let its investors cash out. Atomic Ventures, who backed the company's initial interation, didn't re-invest. The company's current list of backers includes Venture51, Bullpen Capital, Morado Ventures, Start Fund/DST, Greylock Partners, True Ventures, Founders Fund (FF Angel), CrunchFund, and the following angel investors: Marc Abramowitz, Scott Belsky, Reece Duca, Bjorn Evers, Auren Hoffman, Sean Knapp, Andrew Kofman, Howard Lindzon, Chris Larsen, Heather Sue Mercer, Dave Morin, Matt Ocko, Gil Penchina, Joshua Schachter, Arjun Sethi, Josh Spear, John Suliman, David Tisch, and Ray Tonsing.
Betable allows regular social game developers to add an element of real money gambling to their games. The company handles the processing, legality and compliance of real money gambling in whatever geography the gamer is in. Betable reports that 80 percent of its customers in the UK are spending money for the first time in social casino games. That's a big boon to social gaming companies - they earn 10 more times revenue on gamers who convert to real-money gambling than those two just spend on virtual cash.
Still, gaming industry insiders expressed surprise at the company's high valuation. Real money gambling -- and therefore, Betable's service -- is not yet legal across the US. In the meantime, the London and San Francisco-based company's tools are quickly being adopted by gaming companies in the UK.
Real money gambling online is legal in New Jersey and Nevada, two states that Americans already visit to gamble in person. Other states are considering making online gambling legal in various forms (some are considering poker-only allowances and others considering wide-open rules) because of the massive potential income from gambling-related taxes. Zynga has been banking that real money gambling will boost its turnaround.
Betable stands to reap the benefits of these legal changes. Since the company has already done much of the regulatory legwork, supporters believe there is a high barrier to entry for competitors.
However, the company's tools have created controversy among some members of the gaming industry. At a recent industry conference, makers of online casinos expressed concern that not every social game should allow for real money gambling. The argument basically amounts to fairness standards, ie, "what if someone loses a ton of money?" Apparently that never happens in regular brick and mortar gambling. (I kid, it's obviously a much more nuanced -- and highly regulated -- situation than that.) An entire back-and-forth debate on the topic between Betable CEO Chris Griffin and VP of Games for Social Gaming Network Jill Schneiderman is available at VentureBeat here.
Disclosure: CrunchFund, Greylock Discovery Fund and Peter Thiel (Founders Fund) are investors in PandoDaily.
[Illustration by Hallie Bateman]