Will Video Games Go Vegas?

As slots are losing the youth market, gaming plans its next move

“Gambling,” said John Acres at last year’s Global Gaming Expo, “is dead.” For support, the man who has been in the casino business for more than 30 years and invented the modern players-club card cited the plummeting appeal of spinning-reel machines for just about everyone under 40.

He’s the only one in the industry who will say it so emphatically, but many others are worried, too. Which is why, in the past five years, companies have been so eager to latch onto online gaming as a way to connect with new audiences. But, as Acres pointed out in his talk, an old product in a new bottle isn’t really a new product, as new as it looks.

Could betting on video games be the last chance for gambling? In 2009, Woody Levin debuted BringIt.com, a website that let gamers open accounts and bet against each other on a host of Xbox, PlayStation and Wii games. Accepting bets from $1 to $100,000 per matchup, the service appealed to hardcore gamers and soon attracted more than 100,000 users. But encountering some technical challenges, Levin chose to shift emphasis toward the social-gaming space, hosting mini-games where players competed for virtual currency. But he believes that wagering on video games has an enormous potential.

“I think if it’s done right, there’s a huge market for what I call the ‘democratization of professional gaming,’” Levin says. “Right now in South Korea, people fill stadiums to watch top gamers play each other in Minecraft, and even in the U.S. online tournaments are broadcast, with sponsored players competing for prizes up to $100,000.

“So the ability of people to play online lets them be a professional gamer from their own home. You can take your specialized skills and, even if you don’t have the means to travel, you can make a living from it.”

Well, you might think, Levin’s just a fanatic gamer with delusions of video-game grandeur. But it’s worth mentioning that, in February 2012, Levin’s startup—the one that let players bet on video games—was acquired by a large company.

The name of the company? IGT. As in, the biggest slot-machine manufacturer in the world, a company that will live and die with the popularity of gambling.

There are hurdles to casinos lumping into video-game wagering: For one, regulators have been notoriously balky about allowing players to wager on games of skill, and the industry doesn’t exactly embrace change, particularly in something as vital as its core product.
Marco Valerio, a gaming reporter who has worked for QuadJacks, the Online Poker Report and the Global Poker Index, believes that the “pokerization” of video gaming, allowing players to bet money against each other within games of skill, is inevitable, mostly because “it’s fun, new and possible, and game developers are ambitious.”

Casinos, of course, are slow to change. “In 25 years,” Valerio says, “when casino attendance is suffering and for-money video games are thriving, there may begin a period of synergy. Casinos will want new blood and fresh business roaming the floor and video-game makers will want a unique ‘live’ experience, and easy access to people wandering around eager to spend money.”

But it might not take so long: Virgin Gaming, another website offering the chance to win real money playing video games, has been online since 2010, and with Xbox Live integration, is a nearly seamless part of regular play.

Casinos might jump in soon if only because so many of them find themselves in dire straits. Atlantic City casinos recently received permission to run their own fantasy-sports leagues. When your revenues are down 40 percent over the past six years, it’s not so much about taking risks as trying to survive.

So, it’s not difficult to imagine video gaming becoming the next online poker, with casinos providing facilities and a guarantee of fair play in return for a cut of the pot.

In the big picture, humans have been betting on their own skills, from hunting to golf, for thousands of years. It’s only natural that they’ve taken it to the digital arena, and it’s only a matter of time before someone in the casino business takes a risk on catering to them.