Koolbit CEO Gerard Cunningham discusses how the growth of the real-money sector and mobile has influenced the company’s business strategy
Social Casino Intelligence (SCi): After founding Betfair USA, what made you decide to enter the social casino space?
Gerard Cunningham (GC): I was inspired by the idea of putting a Koolbit casino on every device. Mobile has had many false starts in egaming. Two years ago it became clear to me that, finally, mobile was ready for prime-time. Therefore, the regulated egaming world was about to undergo its fi rst major technology platform change; the switch from desktop to mobile. And, in such times it is possible to create large, new successful businesses.
So, we decided to create Koolbit to build a mobile-first, casino platform that is built from the ground up to enable mobile-first social and real-money gambling. Our unique platform allows us to take a set of slot machines and simultaneously publish a new casino on iOS, Android, Amazon and Facebook in a couple of hours. And we are now bringing the same thinking to the egaming side of the business.
SCi: How did your real-money background help when founding Koolbit?
GC: For context, I am a British marketer who has been on the cutting edge of technology my entire career. After working all over Europe and Asia, I made Silicon Valley my home 20 years ago.
Most recently, as a member of Betfair’s executive committee and president of Betfair USA, I led the acquisition and growth of TVG, the largest legal, online betting business in the US-taking bets on the $10bn US horse-racing market. I also led the regulation of online betting on horse-racing in Illinois and the review of the freemium casino and sports betting games that led to the 2009 investment in Kabam, one of the largest social game companies recently valued at $700m.
With that context, the real-money background has helped in two huge ways; insights into player behaviour and industry knowledge, which has helped Koolbit focus on a realistic vision of the future. For example, the speed of US regulatory change will be incredibly slow and after lobbying to expand horseracing, sports betting, poker and casino egaming in the US, I have the scars to prove how slow it would be.
SCi: What made you decide to expand Koolbit into the real-money space?
GC: We are simply following the money. And by focusing on mobile egaming, we are focusing on the fastest growing sector.
The social gaming sector will be a $5bn space in 2015. The real-money/egaming space is already a $44bn market, and the fastest growing sector of the gaming sector. While we love that social gaming allows us to find a global audience, we always knew we wanted to take Koolbit into real-money gaming.
We see that the current egaming leaders are still working mobile out. For example, most incumbents have built very heavy, flash, desktop casino sites, that need to be rebuilt from the ground up to be playable on mobile. Also most mobile sports books are desktop websites put into a mobile browser, without leveraging the capabilities of the mobile device.
Given our experience and leadership on mobile, we see a small window of time for Koolbit to take market share.So, earlier this year we did a little experiment with a small mobilefirst offering, which proved the opportunity in the real-money market in the UK.
SCi: Where do you see the fit between egaming and social gaming? Do you think more real-money firms will move into the social market?
GC: For the average bettor, both egaming and social gaming offer entertainment and enjoyment. At a deeper level they start to diverge.
In the past, free play was primarily a player acquisition tool, with maybe a small component of trial back when egaming was young and players needed to see how the games would play on the desktop. So, almost all real-money businesses have free play, typically a kind of crippled preview version of their games.
On the other hand, the social gaming world has shown that companies can make a freemium experience that is engaging and people will pay for. It also does not have
the same geographic constraints as egaming, and therefore can provide an additional revenue stream from global players that are not in regulated markets.
So, as the smart egaming leaders realise that all future online growth is in mobile, and that mobile growth is largest in non-regulated markets, then the real-money firms will understand they are losing a revenue stream and will increase their interest in mobile, social casino games.
SCi: As Koolbit specialises in mobile casino, how do you see the mobile space developing? Will it continue to grow?
GC: The future of egaming is mobile, and the egaming and brick and mortar incumbents who are late to mobile will pay the price.
Mobile (smartphones and tablets) already overtook PCs in sales, and this quarter now have a larger installed base of devices. The PC will remain as a workstation, but in our everyday lives our smartphones and tablets are taking more and more of our time away from PCs. The future of social and real-money gaming is accelerating towards mobile, and it is still early stages.
Many of the largest egaming incumbents think that a great mobile experience involves putting a website on a mobile device. They are now realising that it takes far more than that to create a compelling experience on mobile, when players are used to the high quality of other apps.
At the moment it feels like 2000 did on the web. That was around six years after the emergence of a user friendly interface and it is now six years after the launch of the iPhone, the first user friendly smartphone. Mobile is still young – mobile advertising has no clear leaders, most egaming incumbents have simple mobile websites that are extensions of desktop accounts, and do not leverage the mobile platform. New mobile players have an opportunity to disrupt the incumbents – mobile-first, global footprint with real-money and social gaming, new acquisition channels and new retention tools.
Koolbit now has two years’ experience building a mobile-first casino business. During that time we have seen the smartphone footprint increase five-fold and it will double again in the next two years. However, as I said before, we are still in the early days of mobile.