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What is gambling in social casinos and how to make real money

Yana Khaidukova
January 4, 2022
9 min
12705

Social gaming in its various forms has become a massive phenomenon. Players all around the globe have taken to it, and iGaming operators would do well to take note. What is social gaming, and what are its prospects and challenges? Read on to find out.

What is social gaming?

Social gaming originated as a form of gaming played over social networks. Real money is not at stake, and its primary focus is on building a sense of community among players, who are usually friends and family. Social gaming has truly taken off in popularity in the past few years; games like Farmville, Mafia Wars, and Words with Friends have caught fire and spread across social media platforms like Facebook. As one might expect, social games’ emphasis on the interaction between players mirrors the community-centered nature of social media platforms.

But games based on virtual farms, competitive wordplay, and organized crime are only one side of the social gaming phenomenon. Social casino games, which are (mostly) free-to-play versions of online casino games, are also enjoying widespread popularity. They offer the same user experience and gameplay as standard online casino games, but using a freemium model. Social casino games give users free daily bonus credits — e.g., chips or spins — to play with. When the player has run out of their daily bonus, they are unable to keep playing unless they pay for more credits.

These games may be integrated in social media, or published as standalone apps. KamaGames’ Pokerist is a highly popular option, as is Slotomania, a free-to-play online slot machine hall. Zynga, publisher of the hit social game Words with Friends, also has a line of social casino games that includes poker and slots. Finally, Playtika is hands down the biggest fish in the pond, with 22% of the entire apps market share and a portfolio that includes 3 of the 6 highest grossing iOS social casino games in the US — Slotomania, BingoBlitz, and World Series of Poker (WSOP).

The two prime motivators for playing social casino games are entertainment and socialization. Users like the fun and novelty of the experience, especially when it comes to connecting with other players via chat during gameplay. Another crucial aspect of social casino games that motivates players to stick to their device is the competitive element. Leaderboards trigger the basic human psychological need to compete and outperform others: it’s the same principle at work in promotional tournaments held by online casinos — a functionality that many of our partner operators provide.

Monetization

Whereas in standard casino games like slots, roulette, blackjack, or poker, players wager real money with the possibility of winning more of the same, in social casino games there is no option to withdraw, even when players pay for additional credits in-game. There is no prize or jackpot: when players win, they receive additional spins or chips to play with.

As we mentioned, social games are monetized through in-app purchases — players can pay cash to extend their playing sessions. Many social casino operators use this as an opportunity for upselling. For example, players can be given the option to pay a certain amount for a certain number of credits — e.g., $10 for 100 chips — or pay a marginally higher amount for a substantially greater number of credits — say, $11 for 200 chips. This makes the games freemium: free-to-play with the option of pay-to-play. Users might pick the game up on a free-to-play basis and then decide to pay to keep the fun going. This is a very simple way for game developers to monetize on the human tendency to pursue instant gratification.

The appeal of social casino gaming

Social casino games often allow for increased player interaction, something that is growing in appeal in the increasingly connected digital age. Players search out both their friends and their rivals and develop strategies against each other by deriving lessons from their playing histories together. The social element is critical. It is one of the most in-demand aspects of contemporary online life, with internet users becoming more and more aware that sometimes the world wide web can create as much isolation as it does connection.

As social gaming is primarily a method of connecting with other internet users, one big lesson that operators can take away from studying the phenomenon is that players respond very positively to enhanced sociability. This insight is confirmed by the explosion in popularity of live dealer games, where players can chat and connect with other players, as well as interacting with a dealer.

As the stakes for social casino gaming are lower than for online casino gaming proper, there’s a lower barrier to entry for new players and a higher chance they could be nudged from idle interest to actually trying a few games. The process of signing up and making a real-money deposit on an online casino can be intimidating, and social casino games provide a nearly identical entertainment experience without the same level of commitment. This could potentially be used as a form of cross-selling to drive social gamers towards real-money online casinos.

Social casino gaming also has a particular appeal in markets where online casino gambling is prohibited by law. In Australia, for example, major iGaming operators offer modified versions of their online casinos — minus withdrawals to mimic the legal social casino gaming experience. This allows them to legally generate revenues in a closed market without having to build a product from scratch.

In a 2015 report on social gaming, the United Kingdom Gambling Commission (UKGC) came to the conclusion that social gaming does not pose any significant societal risk regarding harmful behaviors commonly associated with gambling (such as problem gambling and underage gambling). The UKGC made it clear in a 2019 statement that social casino games would not be subject to regulation, provided operators demonstrated social responsibility.

Player demographics

The most commonly-cited demographic profile of a social casino gamer is a female in her mid-40s. However, it must be noted that different operators target different player segments with different games, and there isn’t a single profile to aim for. According to the UKGC’s 2015 report, nearly half of all social casino gamers are between the ages of 21 and 34.

The UKGC report also provided an estimate that only roughly 1-5% of social casino gamers go beyond their allotted free plays and pay to continue playing; of this fraction, 15% generates 50% of all social casino revenues. This distribution mimics that of gambling, where high rollers account for a massive portion of the revenues.

According to NewZoo, 58% of social casino gamers have also tried gambling for real money. Among players who purchased credits in social casino games, 81% tried gambling. While there is obviously a significant crossover, operators should bear in mind that players’ motivations are different. As we mentioned earlier, while both online casino and social casino gamers play for fun, social casino users aren’t generally motivated by cash prizes, whereas online casino habitués like to go for the win, hoping to make it big.

Market outlook and the future of social gaming

Revenues from social casino gaming have been growing steadily for over half a decade. In 2014, global gross gaming revenues amounted to $3 billion; with a GGR of $6.2 billion last year, the market size has more than doubled. By 2024, it’s expected to hit the $7.5 billion mark.

Comparing bV1sion’s reports — the most accurate for the vertical — from Q1 2020 and Q1 2021, we can see that last year’s GGR growth far exceeded expectations. Boosted by lockdowns, in 2020 social gaming raked in around half a billion dollars more than expected. Projections for 2021 suggest a minor GGR decline (before a resumption of growth in 2022), but the return of lockdowns in late 2021 might reveal these estimates to be conservative.

Here’s another critical statistic: an estimated 72% of social gaming GGR was generated by the North American market. The second biggest market for social gaming is Oceania, with Australia alone experiencing a 4.2% growth in GGR over the course of 2019. In Asia, the Korean market is also growing noticeably, with an 18% increase in revenues in 2019. Meanwhile in China — perhaps unsurprisingly — the government has moved to ban all social poker games, in keeping with its stance on gambling.

Conclusions

Social casino gaming tends to escape the definition of gambling by not offering monetary prizes. Furthermore, as winnings cannot be withdrawn, the sector doesn’t pose any opportunities for money-launderers, thus further alleviating pressure from regulatory authorities.

As revenues are projected to continue rising for the foreseeable future, it seems that social gaming is here to stay. Social game operators are devising new products, and leading brands of the gambling industry — online and offline alike — are looking into releasing products of their own as a promotional tool.

The main lesson that online casino operators can learn from the success of social casino gaming is that interaction between players — be it in live dealer games or tournaments — can do wonders for engagement. It’s no accident that live dealer games are experiencing a surge in popularity, and that tournaments are at this point considered a must-have promotional tool. Acquiring first-class live dealer games and tournament-ready slots from quality providers has become a necessity for all operators.

Some of Slotegrator’s most exciting partner providers offer exactly that: amazing live dealer titles and customisable tournament promotions. Check out the profiles of Evolution, Pragmatic Play, Playson, Spinomenal, or Betgames.TV and request a free consultation with our sales team to learn how to bring stunning live dealer games and exciting tournament play to your online casino!

Yana Khaidukova
Yana Khaidukova
Managing Director
As a software development expert, Yana has been in the gambling industry since 2019, when she became an Account Manager at Slotegrator, then moved on to be Head of the Customer Account and Vendor Departments. Her passion, hard work, and deep understanding of clients’ needs and industry trends led her to the Managing Director position that she occupies today. Yana knows the gambling industry well, constantly follows the latest industry developments, and never stops sharing her insights with her industry colleagues.

Comments

  • G
    Gad Levy
    February 25, 2022
    Hello, we are operating a social casino mobile game. I would like to know if it is possible to work with content providers via your platform for a licensing fee or another arrangement that could suit a social casino business?
    Ayvar Gabidullin
    Ayvar Gabidullin • Business Development Manager
    February 25, 2022
    hello! Got in touch with you regarding your question

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