online gambling
Auto Added by WPeMatico
Drake invests in esports betting startup Players’ Lounge
Drake’s latest collaboration isn’t with Kanye or Kendrick, it’s with Marissa Mayer.
The rap superstar has joined a bevy of Silicon Valley investors, including Strauss Zelnick, Comcast, Macro Ventures, Canaan, RRE, Courtside and Marissa Mayer, to fund Players’ Lounge, an esports startup looking to pit gamers against each other in their favorite titles with some friendly wagers on the line.
The startup has just announced that it closed $3 million in funding.
The company, which has been around for five years, got its start as an esports startup looking to organize real-life matches at bars in New York City to play FIFA. That’s obviously not the most scalable business of all time, but last year after joining Y Combinator, the company really dove into a new model that looked to create an online hub for gamers to battle each other in titles of their choosing, with money on the line.
The company has a heavy emphasis on sports titles, like FIFA 19, NBA 2K19 and Madden 19, but there are also some heavy hitters like Fortnite, Apex Legends and Super Smash Bros. Ultimate.
Gamers can set a match or join one in head-to-head challenges or in massive 500-person tournaments. The wagers are often a buck or two but can swell much higher. Players’ Lounge takes 10 percent of the bets as a fee. Because it’s a game of skill, not chance, there aren’t many issues with gambling regulations, though a few states still don’t allow the service, the company says.
The startup plans to use their new cash to beef up their library of playable games and add to their development team.
Powered by WPeMatico
Loot boxes face scrutiny from an international coalition of gambling authorities
The world of online gaming is changing so quickly that players, developers, publishers and regulators are all scrambling to keep up with each other. Case in point: loot boxes, randomized in-game rewards that may or may not have monetary value or be purchasable with real money, are after years of deployment only now being scrutinized globally for being what amounts to thinly veiled gambling.
A suggestive new study from British researchers and a just-announced coalition of governments are the latest indicators that the loot box phenomenon and its derivatives likely won’t continue to be the wild west they’ve been for the last few years.
Many factors have led games to resemble services or channels more than pieces of entertainment with a start and end. And that in turn has changed how these games are monetized. As an alternative to a $60 up-front cost or a $10/month subscription, a game may be released for free but supported with in-game purchases of various kinds, including loot boxes.
Loot boxes usually contain a random reward, such as a new item for your in-game character. They can be earned by playing the game (usually a lot), but often can also be bought. Not only this, but the items have a sort of black market value and are traded among players and indeed gambled in a highly unregulated economy that reports put on the order of billions of dollars.
Although gaming companies compare it to collecting baseball cards or getting a toy in a box of cereal, the reality is plainly more complex than that, and the idea has led to extreme versions where players are constantly urged to buy in-game currencies and rewards. There’s no doubt that companies like EA and Tencent have made enormous amounts of money by luring players into purchases in “free to play” games.
The report, instigated earlier this year by an Australian parliamentary committee, was conducted by David Zendle and Paul Cairns, of York St. John University. The study is a limited one, they are quick to point out, but there is essentially nothing else on the topic and even the most basic research is warranted. “Such work is urgently needed,” they write in the introduction.
For their study, they surveyed thousands of gamers recruited from Reddit about their habits and spending. What they found was that gamers tending toward “problem gambling” habits (i.e. spending or behavior that negatively affects everyday life and relationships) spent considerably more on loot boxes than normal gamers — yet that wasn’t the case for general microtransactions like outright buying an in-game item or currency.
In the summary issued today to Australia’s Committee on Environment and Communications, they write:
We found that the more severe an individual’s problem gambling, the more they spent on loot boxes. The relationship we observed was neither trivial, nor unimportant. Indeed, the amount that gamers spent on loot boxes was a better predictor of their problem gambling than high-profile factors in the literature such as depression and drug abuse.
As anyone with a critical eye for research will have noted by now, and as the researchers point out, this correlation could go either way. In either case, however, it doesn’t look good for the practice:
It may be the case that loot boxes in video games act as a gateway to other forms of gambling, leading to increases in problem gambling amongst gamers who buy loot boxes.
However, it is important to note that an alternative explanation for these results may also be true. The key similarities between loot boxes and gambling may lead to gamers who are already problem gamblers spending large amounts of money on loot boxes, just as they would spend similarly large amounts on other kinds of gambling. In this case, loot boxes would not be providing a breeding ground for the development of problem gambling so much as they would be allowing games companies to exploit addictive disorders amongst their customers for profit.
The researchers conclude that either way, the practice merits more research and possibly regulation. It’s not the same as ordinary gambling, they say, but it’s similar enough that it warrants controls like those exerted on, say, online poker, to prevent harm and abuse.
Governments around the world are split on how to characterize loot boxes, with Belgium taking a severe enough stance that Blizzard was forced to stop offering loot boxes for real money in its popular team shooter Overwatch. But French and German authorities disagreed and have to a certain extent accepted the argument that the practice is more like opening a Kinder Egg or collectible card game pack.
But this uncertainty is itself galvanizing, apparently. A coalition of 15 gambling authorities, including the U.K., France, Portugal, Norway and the U.S. (via tech-savvy Washington State’s gambling commission), issued a shared declaration that they intend to look into these shenanigans and they expect the companies involved to play ball:
We are increasingly concerned with the risks being posed by the blurring of lines between gambling and other forms of digital entertainment such as video gaming. Concerns in this area have manifested themselves in controversies relating to skin betting, loot boxes, social casino gaming and the use of gambling themed content within video games available to children.
We commit ourselves today to working together to thoroughly analyse the characteristics of video games and social gaming. This common action will enable an informed dialogue with the video games and social gaming industries to ensure the appropriate and efficient implementation of our national laws and regulations.
We anticipate that it will be in the interest of these companies whose platforms or games are prompting concern, to engage with [gambling] regulatory authorities to develop possible solutions.
Tying it to kids is a good way to stay on the moral high ground, but there aren’t a lot of problem gamblers in the under-18 bracket. The truth is that while kids are certainly at risk, the problems associated with loot boxes threaten all gamers and indeed the basic economic grounding of gaming itself.
A letter of intent is a start and may cause a change in the ecosystem as developers and publishers aim to make their loot box systems less exploitative (as some have already done) and (what is more likely) engage in a charm offensive to normalize the practice and distance it from more traditional gambling. At the very least it is good to know that there is action afoot in an area that has frustrated and certainly lightened the wallets of millions of gamers.
Powered by WPeMatico
Bet money on yourself with Proveit, the 1-vs-1 trivia app
Pick a category, wager a few dollars and double your money in 60 seconds if you’re smarter and faster than your opponent. Proveit offers a fresh take on trivia and game show apps by letting you win or lose cash on quick 10-question, multiple choice quizzes. Sick of waiting to battle a million people on HQ for a chance at a fraction of the jackpot? Play one-on-one anytime you want or enter into scheduled tournaments with $1,000 or more in prize money, while Proveit takes around 10 percent to 15 percent of the stakes.
“I’d play Jeopardy all the time with my family and wondered ‘why can’t I do this for money?’ ” says co-founder Prem Thomas.
Remarkably, it’s all legal. The Proveit team spent two years getting approved as “skill-based gaming” that exempts it from some laws that have hindered fantasy sports betting apps. And for those at risk of addiction, Proveit offers players and their loved ones a way to cut them off.
The scrappy Florida-based startup has raised $2.3 million so far. With fun games and a snackable format, Proveit lets you enjoy the thrill of betting at a moment’s notice. That could make it a favorite amongst players and investors in a world of mobile games without consequences.
“I could spend $50 for a three-hour experience in a movie theater, or I could spend $2 to enter a Proveit Movies tournament that gives me the opportunity to compete for several thousand dollars in prize money,” says co-founder Nathan Lehoux. “That could pay for a lot of movies tickets!”
Proving it as outsiders
St. Petersburg, Fla. isn’t exactly known as an innovation hub. But outside Tampa Bay, far from the distractions, copycatting and astronomical rent of Silicon Valley, the founders of Proveit built something different. “What if people could play trivia for money just like fantasy sports?” Thomas asked his friend Lehoux.
That’s the same pitch that got me interested when Lehoux tracked me down at TechCrunch’s SXSW party earlier this year. Lehoux is a jolly, outgoing fella who became interested in startups while managing some angel investments for a family office. Thomas had worked in banking and health before starting a yoga-inspired sandals brand. Neither had computer science backgrounds, and they’d raised just a $300,000 seed round from childhood friend Hilt Tatum who’d co-founded beleaguered real money gambling site Absolute Poker.
Yet when he Lehoux thrust the Proveit app into my hand, even on a clogged mobile network at SXSW, it ran smoothly and I immediately felt the adrenaline rush of matching wits for money. They’d initially outsourced development to an NYC firm that burned much of their initial $300,000 seed funding without delivering. Luckily, the Ukrainian they’d hired to help review that shop’s code helped them spin up a whole team there that built an impressive v1 of Proveit.
Meanwhile, the founders worked with a gaming lawyer to secure approvals in 33 states including California, New York, and Texas. “This is a highly regulated and highly controversial space due to all the negative press that fantasy sports drummed up,” says Lehoux. “We talked to 100 banks and processors before finding one who’d work with us.”
Proveit founders (from left): Nathan Lehoux, Prem Thomas
Proveit was finally legal for the three-fourths of the U.S. population, and had a regulatory moat to deter competitors. To raise launch capital, the duo tapped their Florida connections to find John Morgan, a high-profile lawyer and medical marijuana advocate, who footed a $2 million angel round. A team of grad students in Tampa Bay was assembled to concoct the trivia questions, while a third-party AI company assists with weeding out fraud.
Proveit launched early this year, but beyond a SXSW promotion, it has stayed under the radar as it tinkers with tournaments and retention tactics. The app has now reached 80,000 registered users, 6,000 multi-deposit hardcore loyalists and has paid out $750,000 total. But watching HQ trivia climb to more than 1 million players per game has proven a bigger market for Proveit.
Quiz for cash
“We’re actually fans of HQ. We play. We think they’ve revolutionized the game show,” Lehoux tells me. “What we want to do is provide something very different. With HQ, you can’t pick your category. You can’t pick the time you want to play. We want to offer a much more customized experience.”
To play Proveit, you download its iOS-only app and fund your account with a buy-in of $20 to $100, earning more bonus cash with bigger packages (no minors allowed). Then you play a practice round to get the hang of it — something HQ sorely lacks. Once you’re ready, you pick from a list of game categories, each with a fixed wager of about $1 to $5 to play (choose your own bet is in the works). You can test your knowledge of superheroes, the ’90s, quotes, current events, rock ‘n roll, Seinfeld, tech and a rotating selection of other topics.
In each Proveit game you get 10 questions, 1 at a time, with up to 15 seconds to answer each. Most games are head-to-head, with options to be matched with a stranger, or a friend via phone contacts. You score more for quick answers, discouraging cheating via Google, and get penalized for errors. At the end, your score is tallied up and compared to your opponent, with the winner keeping both player’s wagers minus Proveit’s cut. In a minute or so, you could lose $3 or win $5.28. Afterwards you can demand a rematch, go double-or-nothing, head back to the category list or cash out if you have more than $20.
The speed element creates intense, white-knuckled urgency. You can get every question right and still lose if your opponent is faster. So instead of second-guessing until locking in your choice just before the buzzer like on HQ, where one error knocks you out, you race to convert your instincts into answers on Proveit. The near instant gratification of a win or humiliation of a defeat nudge you to play again rather than having to wait for tomorrow’s game.
Proveit will have to compete with free apps like Trivia Crack, prize games like student loan repayer Givling and virtual currency-based Fleetwit, and the juggernaut HQ.
“The large tournaments are the big draw,” Lehoux believes. Instead of playing one-on-one, you can register and ante up for a scheduled tournament where you compete in a single round against hundreds of players for a grand prize. Right now, the players with the top 20 percent of scores win at least their entry fee back or more, with a few geniuses collecting the cash of the rest of the losers.
Just like how DraftKings and FanDuel built their user base with big jackpot tournaments, Proveit hopes to do the same… then get people playing little one-on-one games in-between as they wait for their coffee or commute home from work.
Gaming or gambling?
Thankfully, Proveit understands just how addictive it can be. The startup offers a “self-exclusion” option. “If you feel that you need to take greater control of your life as it relates to skill-gaming,” users can email it to say they shouldn’t play any more, and it will freeze or close their account. Family members and others can also request you be frozen if you share a bank account, they’re your dependant, they’re obligated for your debts or you owe unpaid child support.
“We want Proveit to be a fun, intelligent entertainment option for our players. It’s impossible for us to know who might have an issue with real-money gaming,” Lehoux tells me. “Every responsible real-money game provides this type of option for its users.
That isn’t necessarily enough to thwart addiction, because dopamine can turn people into dopes. Just because the outcome is determined by your answers rather than someone else’s touchdown pass doesn’t change that.
Skill-based betting from home could be much more ripe for abuse than having to drag yourself to a casino, while giving people an excuse that they’re not gambling on chance. Zynga’s titles like Farmville have been turning people into micro-transaction zombies for a decade, and you can’t even win money from them. Simultaneously, sharks could study up on a category and let Proveit’s random matching deliver them willing rookies to strip cash from all day. “This is actually one of the few forms of entertainment that rewards players financially for using their brain,” Lehoux defends.
With so much content to consume and consequence-free games to play, there’s an edgy appeal to the danger of Proveit and apps like it. Its moral stance hinges on how much autonomy you think adults should be afforded. From Coca-Cola to Harley-Davidson to Caesar’s Palace, society has allowed businesses to profit off questionably safe products that some enjoy.
For better and worse, Proveit is one of the most exciting mobile games I’ve ever played.
Powered by WPeMatico
The next big gold rush
As we look to the next evolution of our digital ecosystem, it seems certain that virtual goods will play a much larger role. From vanquishing new breeds of digital monsters to defining a modern asset class, virtual goods will enable new experiences and redefine traditional ones. Indeed, this new gold rush will create opportunities for the enterprising prospector and shovel-seller alike. Read More
Powered by WPeMatico