M-Gambling: What Are the Odds?

M-commerce’s biggest headache right now isn’t how to make graphics look better, the sending frequency stronger, or the reach better. It’s about how to make money in the future.

A Success Story

I guess you’ve heard a lot about DoCoMo and its mobile success story, i-mode. I don’t want to bore you with the details of the technology, but I do want to remind you why DoCoMo is so interesting. In fact it’s fascinating, mostly because of its ability to create new revenue models.

One of its first inventions was a function we take for granted: individuals composing their own ringing tone or private melody. Each tone costs less than a cent, which is charged every time people send their melodies to new users. Cool!

And let’s not forget DoCoMo’s service that sends, via its mobile phones, invitations to individuals to meet up with each other. The system simply checks whether anyone on an i-mode phone’s address list is within a short distance of the i-mode phone. If so, presto! The phone alerts the i-mode phone holder and suggests a meeting take place. The alert is sponsored by the nearest cafi, for example, which offers a digital coupon that makes a meeting at the establishment an attractive prospect for the two people concerned.

A Special Case

Such concepts have put i-mode one step ahead of everyone else in the business. Others have not managed to invent new revenue models like this, so they have also failed to execute revenue-generating services.

But remember that i-mode is a special example that few could consider emulating. DoCoMo is a spinoff of NTT, which is already the dominant mobile phone player in the Japanese market. The introduction of the i-mode phone was just an extension of DoCoMo’s already considerable offerings.

Accordingly, telco companies around the globe are desperately searching for new ways to invent sustainable revenue channels, and the channel that keeps coming up trumps, time after time, is gambling.

Taking a Gamble

Let me take you through a scenario: Mary eyes the horses as they jostle before the starting gates and prepares to place her bet. After considering the field, she decides on Indigenous, a former champion, now running at 15 to 1. But instead of racing herself all the way to the betting booths, she picks up her cellular phone. From her perch on the living room couch, she places her $10 bet with a punch of the OK button.

Fantasy or reality?

Well, that’s a preview of what’s already going on in Hong Kong. The city’s racing monopoly has put its multibillion-dollar betting franchise on the mobile handset. Although the service is still in its infancy, more than 22,000 gamblers have already signed up for it. It took the Hong Kong Jockey Club eight years to net just four times that number using other devices for personal remote betting.

M-commerce is instant commerce. It’s impulse-driven commerce and will remain so for a long time to come. Gambling, too, is instant and impulse-driven, and this compatibility is the key reason for m-gambling’s probably bright future.

So, is m-gambling likely to be the next big mobile hit?

When one thinks about this question, a couple of parallels suggest themselves: Some newspapers’ largest revenue sources are the contact/personal ads in the back of the paper, and the pornography business is one of the Internet advertising industry’s biggest spenders. Odds are, gambling qualifies as a top contender for the role of mobile phone moneymaker.

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