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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

July 31, 2013 at 9:00 AM

RealNetworks casino plan: give out $100k per month, buy Slingo

RealNetworks is leaping into the competitive and lucrative world of online gambling, sort of.

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The Seattle company today is announcing that it will give away $100,000 a month through a sweepstakes offered by its “GameHouse Casino” game on Facebook starting Aug. 1. Founder Rob Glaser is scheduled to announce the plan during a keynote speech at the Casual Connect conference today in San Francisco.

Glaser also announced that the company bought New Jersey-based social and casino games maker Slingo — known for its hit Bingo slots game — for $15.6 million.

In an interview, Glaser said the sweepstakes plan is one of three major initiatives planned this year to revitalize RealNetworks. Still to come are plans for its two other major businesses, mobile entertainment and the RealPlayer digital media operations.

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“We think the combination of the new products we’re launching will individually and together reignite the company and revitalize the company and turn us back into a growth business,” he said.

Since last July Glaser’s been serving as interim chief executive and architect of a new turnaround strategy at the digital media company he founded in 1994. He took the helm again after the company churned through two chief executives in two years while struggling to regain its former glory.

Perhaps Glaser will get lucky this time around.

Virtual casinos are one of the most profitable categories of mobile and social games and one that’s now dominated by Seattle companies. Casino games operated by Big Fish Games and Double Down Interactive are the category leaders and some of the highest grossing apps on Apple’s iOS platform.

They’re also positioned to expand “real money” offerings where and when it’s legalized. It’s already offered in the United Kingdom and several U.S. states, though the competition and regulatory challenges prompted Zynga to back out of the business last week.

Even without real money on the line, players are expected to spend $1.5 billion on social gaming this year and perhaps $2.5 billion a year by 2016, Glaser said.

RealNetworks is still trying to gain a foothold with its roughly year-old “GameHouse Casino” game and Glaser hopes it will “turbocharge” the company’s games business. Overall its game division lost $1.7 million on sales of $13.9 million in the quarter ending March 31.

But instead of wading into the thicket of global gambling rules — and waiting for U.S. regulators to loosen up their stance on online gambling — RealNetworks took a different tack, Glaser explained.

Offering sweepstakes is a way of “creating the same excitement — re-creating excitement that happens in a casino,” he said.

Glaser believes it’s the first online casino game coupled to a sweepstakes in the U.S.

Sweepstakes are much less complicated to pursue than “real money” gaming, he said. There are established rules for operating sweepstakes in most regions of the U.S., enabling promotions such as McDonald’s current Monopoly sweepstakes.

RealNetworks is launching “GameHouse Casino Plus” with the “Golden Dreams Sweepstakes” in 31 states plus the District of Columbia because it was able to easily figure out sweepstakes rules in those states. It plans to extend the program to other states — including Washington — and perhaps other countries as it figures out their regulations.

In the initial launch regions, “it’s really clear that a promotion like this is completely within the framework, where
there’s already clear precedent,” Glaser said. “We decided, ‘Let’s decide all the ones where it’s completely clear.’ We’ll fill in the rest hopefully quickly but over time.”

Players in the launch regions can win “golden tickets” that can be used to enter the sweepstakes. They can use up to 30 tickets a day for entries. Players in regions without access to the sweepstakes can enter to win virtual coins rather than actual cash.

The “plus” version with sweepstakes is only being offered to start on PC versions of the game. Mobile versions for iOS and Android are planned, Glaser said.

“Our view is the PC business has a lot of life left to it but the mobile business has a lot of growth to it,” he said.

Real also is offering up its platform to partners who may use it to offer additional prizes.

An outside vendor will operate the sweepstakes games for Real, but the new game was built at its studios in Seattle and Victoria, B.C., under the guidance of Ken Murphy, GameHouse vice president and general manager.

Also busy was Real’s legal counsel. In addition to gambling regulations, Real’s lawyers also checked to be sure that the estate of Roald Dahl — author of the classic “Charlie and the Chocolate Factory” — didn’t hold the rights to the term “golden ticket.”

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Comments | Topics: Big Fish Games, Billionaire techies, casual games

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