February 14, 2005 The announcement last week that two UK companies had developed a secure mobile casino system that will run on any mobile phone was significant. By utilizing the Spin3 wireless casino system, casino operators, mobile network providers and any company with an internet presence can now offer a secure mobile casino via a large selection of mobile phones and other wireless devices. The Spin3 wireless casino system consists of six real-time networked casino games, including blackjack, roulette and scratch card. The Spin3 mobile casino system also includes a progressive jackpot slots game, and players will have the chance to win a continuously growing jackpot that starts at US$40,000, right from their mobile device. Conversely, those people will also have the opportunity to lose their money and that spells some significant social problems over the next few years. Gambling's best clients are the addicted.

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Depending on the nation, culture, race and how the statistics were compiled, somewhere between two and six percent of the population of every country has a pathological addiction to gambling. What causes it doesn't really matter - it is an addiction, and beyond the heavily addicted there's another five or more percent that could be termed compulsive gamblers to some degree.

Surveys of gambling spending show over 80% of gambling spending is by heavy gamblers. It's a perfect example of the old Pareto (80/20) principle: most (80%) of your business comes from a small percentage (20%) of the client base.

Gambling's best clients are the addicted. Governments have become addicted to gambling too

And the problem is that it's not just this segment of the population that has become addicted. Governments have become addicted to gambling too. Otherwise responsible Governments around the world are now looking at their unexpected windfalls from gambling taxes in recent years and wondering how to reduce their dependence on them.

This report in eGambling, the electronic journal of gambling issues, explains some of the complex issues facing the Government of Alberta in Canada.

This report from Ozwatch illustrates how approximately one third of Australia's billion gambling taxes may be from a mere 200,000 gambling 'addicts' and their families. Such gamblers lose thousands of dollars a year each on gambling, with thirty cents in every dollar to public revenue. They are disproportionately in low-income households.

As casinos and gaming machines and subsequently wireless handheld gamble-anywhere casinos become more accessible to lower income groups, the regressivity of gambling taxation worsens. In other words, most of the taxes are disproportionately borne by those who can least afford it.

So society is faced with a problem. With the world going wireless, and the Device-Formerly-Known-As-The-Mobile-Phone (DFKATMP) adding yet another popular product (casino gambling) to its growing feature set, the world's problem gamblers will soon be faced with the prospect of ever-present temptation of carrying a casino in their pocket.

The DFKATMP rules

The Device-Formerly-Known-As-The-Mobile -Phone (DFKATMP) is now clearly emerging as the everything portal of new millennium. With a DFKATMP in your hand, you can do almost anything.

You can buy anything you can afford, sell anything you have, and facilitate almost anything you desire from wherever you are. As communications become wireless and ubiquitous, man will be geographically unchained.

The world is going wireless very quickly Global mobile phone shipments rose to 703 million units in 2004, up 23.3 percent from 570 million in 2003. Analysts are raising their forecasts - 750 million mobile phone sales seem likely for 2005. In raw figures, that's an extra one mobile phone for 10% of the planet's population.

Of source a lot of this growth is the upgrade or replacement market for phones, but this still appears to be adding to global penetration at a high rate. In technologically advanced countries, it appears that replaced phones are being passed down to children. Now that all teenagers in technologically-advanced nations have mobile phones, the market is getting ever younger.

A two year old university survey of Italian children between the ages of nine and ten found that, incredibly, 56 percent owned cell phones. This was the finding of a study published on 8 July 2003, coordinated by Francesco Pira, a lecturer at the University of Trieste. Widespread ownership of cell phones among Italian children mirrors that of the adult population. Two years ago there were 53 million mobile phones and 58 million inhabitants in Italy.

There are 1.7 billion mobile phone users - more than 25% of the population

Penetration of mobile phones per capita in some countries suggest effective saturation levels (80%) has been reached with some technologically advanced countries approaching 100%. Market growth in those countries is now dependent on selling better services and features such as 3G, DMB and beyond).

The increased growth in the world's mobile phone sales is coming from the most populous countries and they are going mobile VERY fast. By 2009, EMC predicts there will be 550 million mobile users in China, 224 million in the US,117 million in India and 100 million in Brazil .

Many of the world's population have never had access to fixed-line telephones. The cost of a copper telephone infrastructure was beyond much of the world's population but a wireless infrastructure costs much less and people disadvantaged by the poverty/technology divide of the 20th century have leapfrogged a generation of technology and growth in China and India is enormous. The economic and social effects of the mass connection of these populations will drive massive change.

Mobile connections are growing faster than internet connections and fixed line telephone connections are decreasing. Later this year, there will be 2 billion mobile phone users - roughly one third of the world's population.

What can be done?

One of the problems we'll face as a global society over the coming decades is how to regulate gambling on an international scale to ensure that the gambling addicts of the world are not exploited. That won't be easy with so many governments now heavily dependent on gambling taxes.

Technolgical capability is increasing faster than society and government is looking at the issues and via mobile handheld gambling, we now have the technological capability to never have to see the addicts lose their money. It will be possible to export the misery over national boundaries.

In western society where the population has grown up with handheld computer game platforms, and mobile phones in the hands of 10 year olds, the potential for societal upheaval around handheld gambling is immense.

Research from A.T. Kearney recently found that 10% of mobile phone users were already downloading mobile phone games of the non-gambling variety. This number already exceeds the number of console game users and indicates that the DFKATMP is set to become the world's most popular gaming console too.

We don't have a solution to what we think will become a massive problem. Any ideas?

The mobile casino

While the societal problems associated with mobile gambling will be immense, it is also worth applauding Spin3's technological achievement. As Spin3 CEO Matti Zinder said in the company's press release, the company is now "ideally positioned to provide a complete casino system for any company wishing to compete successfully and capture a significant portion of this exploding market."

Indeed, Spin3 looks poised to cater to a market larger than any previously known to mankind. The phenomenon that is mobile telephony is immense - throw in computer gaming and gambling and it's a combustible mixture. Industry analyst Juniper Research has forecast that the mobile gambling industry will reach US $16 billion in revenues by 2008.

Microgaming's integrated gaming and casino management technology powers the graphics-rich, Java based mobile casino games via the GameWire server to form the Spin3 system.

The Spin3 mobile casino system is comprised of the GameWire suite of mobile play-for-real casino games and the SpinFone suite of pay per download casino games, is able to provide CRM (Customer Relationship Management) capabilities giving customers player management, reporting, data analysis, promotion management and loyalty programme tools.

In addition, player authentication, financial transactions and gaming activities within the system are protected by an array of highly advanced security measures that make up the patent-pending SpinLoc technology. This proprietary security and authentication system constitutes what Spin3 and Microgaming term "the most secure wireless gaming system available."

Spin3 will also offer a non-gambling version of the wireless casino technology, the SpinFone suite of interactive casino games. These applications, which are based on the same client-server architecture as those in GameWire, are designed as a customer acquisition, promotional and marketing tool.