Online Social Gambling and Its Implications for the Study of Marketing Communications

Online Social Gambling and Its Implications for the Study of Marketing Communications

Wilson Ozuem (The Business School, University of Gloucestershire, Cheltenham, UK) and Jason Prasad (University of Wales, Cardiff, UK)
Copyright: © 2015 |Pages: 29
DOI: 10.4018/IJABE.2015070102
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Abstract

Gambling has been a part of humanity for a long time, and references to it have been found in some of the earliest dated records. Literature on the topic has been accumulating since ancient times. The advent of Internet technology along with its typical subsets provides a new approach to how gambling is conducted in postmodern times. Drawing on qualitative research and utilising a single case study strategy, this study examines online social gambling and real money gambling marketing communication practices as well as offers some insights into the development and implementation of effective marketing communication programmes. In contrast to existing studies, the paper, in part, proposes integrative and higher levels of marketing communication programmes between online social gambling and real money gambling environments.
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1. Introduction

As profit-driven entities, Internet gambling companies (also referred to as ‘online gambling’ and ‘real money gambling online’ in this study) are seeking to expand into a rapidly growing online social gambling industry (Yakuel, 2013; Chang and Zhang, 2008). A few of the major Internet gambling companies and social gambling companies have already started to spend millions of dollars trying to fight for market share, while other gambling companies and social gambling companies have begun building strategic alliances (Johnson, 2013). These actions have sparked controversy within the industry in terms of how companies should handle both markets (Schneider, 2012; Goode, 2013; Morgan Stanley, 2012). This controversy, combined with limited research within the social gambling industry, has left industry leaders and scholars with different ideas about how to understand the business models of the social gambling and Internet gambling industries, and more specifically, whether or not to merge them or keep them separate (Schneider, 2012; Goode, 2013; Collson, 2012a; Rogers, 2013; Morgan Stanley, 2012). This issue has spawned debate amongst government officials about whether or not social gambling online can actually be considered ‘gambling’ and whether or not they should step in and regulate the online social gambling market (Alaeddini, 2013; Cohen, 2013). Furthermore, authors have different perspectives about online gaming, and there appears to be no clear definition of what online gaming entails (Yee, 2006; Raylu and Oei, 2002; Jieun et al., 2011; Schneider, 2012). More specifically, Yee (2006) and Kaye (2012) claim that online gaming involves playing traditional video type games online; Owens (2010) and Alaeddini (2013) suggest that Internet gambling games are forms of online gaming; and Jieun et al. (2011), Roche (2012) and Odobo (2013a) suggest that the definition also includes the relatively new industry social gaming (including social gambling).

The advantage for Internet gambling companies is they can exploit marketing opportunities within the unregulated social gambling industry, which they can no longer do within the regulated Internet gambling industry. The social gambling industry is unregulated in over 99% of countries primarily because it is currently not considered gambling (Morgan Stanley, 2012). More specifically, some social gambling sites do not assign real-life monetary value to their virtual currency (fake gambling chips), while other social sites do not accept payments (wagers) from players for prizes won. Either way, both strategies eliminate one of the three key elements for something to be considered gambling (UK Gambling Act, 2005). This situation provides real money gambling sites direct access to players who are located in places where local governments have placed legal restrictions on Internet gambling marketing communication programmes and consumer buying.

At a recent gambling conference in London, some industry experts stated that social gambling and real money gambling businesses should not be viewed as identical entities but should be viewed separately as each has a unique business model (Goode, 2013) and social gamblers and real money gamblers have different motives for playing (Choi and Kim, 2004). In addition, 98% of social gamblers are unwilling to spend any money at all and therefore cannot be converted into profitable real money gamblers (iGaming Business, 2013). This data is consistent with Chang’s (2010) case study, which states that 98% of social players online are unwilling to spend any money.

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