I think mobile/social games are going to get much bigger for just this reason. Casino's have been playing the human psychology game of trading ring-ding-ding and related human excitement for centuries with astonishing success. Even though they've been seen as a menace to humanity, they've nonetheless been able to been able to use every trick in the book to expand their physical presence and market impact.

However, there are huge limitations to casinos: they are limited by regulation; they are limited to physical infrastructure; they have limited space that the customer has to come to.

Quite obviously, none of this exists for the online world. This is the incredible success story of Zynga. They've managed to build a giant online casino and call it a game, and get the execs of Google and Facebook licking their heels.

This is a market sector that will not simply expand. It will explode.

Disagree. The addiction and draw of a casino is MONEY. Not "ding ding ding". Pay to play games eventually offer dismissing reward. Every time you step into a casino you could win big. There is no incentive for these types of mobile games. "one more roll" simply doesn't apply long term.

I agree there will be a correction in mobile gaming. At least I hope to see these vapid "games" get kicked in the nuts a little.

I'm not sure that I want to share more complete thoughts on this subject, as it could easily be used to develop the next generation of money-sucking social games, but here's a partial response.

Casinos offer a variety of different games, which have different appeal to different types of their clientele. There are lottery type games, in which there is a faint hope of a extraordinary windfall, which appeal to people who want money without working for it (i.e. people in debt). There are games in which there is a large degree of control and which the winner emerges because of his/her psychological prowess which appeals to the serious gamer (i.e. professional poker players). And then there are the run of the mill ring-ding-ding games, which appeal both to the idea of winning money, the suspense of the spinning wheel, and various other attention keeping mechanisms.

Social games have the ability to emulate virtually all of these. Although ostensibly buy-in is limited to virtual money that can never be removed from the game, there is nothing stopping large markets to grow around virtual items that can be traded (as happened with Ultima, EQ, SL, Eve, etc.).

The clutch here is that the "fun" of the experience in both cases largely revolves around ideas of advancement, social enhancement of the idea of advancement, and (potentially) some real world tie-in.

Actually, in many respects the social game is far more advanced than the casino already, insofar as it offers the idea of advancement which is potentially not tied to money (i.e. leveling up), but which can also be tied to money if people want it to be.

The problem of this right now is the fact that virtual currency cannot be liberated, but as soon as that problem is solved the casino will be an obsolete institution, soon to be extinct.

You've brought pachinko to mind: "Directly gambling on pachinko is illegal in Japan. Balls won cannot be exchanged directly for money in the parlor. The balls are exchanged for tokens or prizes, which are then taken outside and exchanged for cash at a place nominally separate from the parlor." (quote from Wikipedia)

If rewards could then be converted into real world prizes or money, even if the games are based on "skill" (read: poker), wouldn't these new games be subject to the same regulation as on-line casinos?

Ostensibly, but just how well are governments doing at regulating online casinos? Ok, add in easily accessible VPNs and stable currencies not tied to a regulatory body. The question is not can and will governments make these other currencies illegal, but can governments enforce any laws that they make?

Casinos are wildly different in that is usually a 'genuinely' social activity (most people go with friends), there is the potential to win 'real' money (however slight) and even if you don't win (or lose big) you come away from it feeling as though you had fun - Also, there's free booze.

I agree with the sentiment, which is why I only play in the poker rooms, where the odds are effectively neutralized and you just worry about the rake (which goes away in tournaments, minus 'fees'). But even though I don't like the odds of playing the table games, I will occasionally set aside a small amount to play craps with because it's fun.

> most people go with friends > you come away from it feeling as though you had fun

As the other commenter pointed out these games aren't making money from the average person. It's making money from the "whales".

A close friend of mine is a compulsive-gambler, trust me they aren't there for the booze or the social experience.

Slot machines are where the money is, look at the floor area they give them.

Whales are just the bonus on top and the tables give the sense of glamour/sophistication.

Yes! Mobile game companies are essentially casinos (and receive most of their revenue from whales).