Is betting on video games the next big thing when it comes to virtual sports?
Ryan DeSanto sure thinks so, and he's willing to put his money where his mouth is.
But I'm not just talking about a friendly game of Madden, I'm talking about DeSanto's new online venture, GameSetCash.com where gamers will be able to open accounts and wager on tournaments in games like "FIFA," "Fight Night," and "NCAA Football."
"The goal of the site is to create a safe and secure place for gamers to play other gamers for cash," says DeSanto, whose site is set to launch at the end of March. "In 2009, 500 million EA Sports games were played online. 'FIFA' and 'Madden' combine an average of 2.5 million games per day. And if you look on Facebook, there are already 500 'Madden' tournament groups and over 1,300 'FIFA' tournament groups that average between 8 and 14 players, and these are all cash tournaments.
"Besides, having a couple of bucks on a game just makes it more exciting."
I had the chance to sit down with DeSanto to get the latest on his site, how this is legal, and why he thinks connecting with Facebook could be the key. Here's what he had to say.
Jon Robinson: Other sites have tried this before, but they all seem to be about professional "Madden" players betting huge amounts of money or trying to hustle some gamer who is in way over his head. How do you plan to differentiate yourself?
Ryan DeSanto: When starting out on this project, our research showed that there is a real demand for an intuitive and secure online platform where gamers can play other gamers in tournaments and for cash. But when researching our competitors, it was obvious that something about their approach was off. It's easy to credit this to poorly designed Web sites or misguided marketing initiatives, but that would really be ignoring the problem, which is very simple, and that's the fact that skill games for cash competitions by nature cater to hustlers and glitch exploiters and pros. And that's most of what you'll find in the existing communities ... there's a very limited number of people willing to put their money on the line in these environments.
With this insight, we began looking at other, non-chance based, competitive communities where members were putting cash on the line. We came across this huge obsession with fantasy sports betting. There were over 27 million people involved in fantasy sports leagues in 2009, with the average participant wagering $150 on the outcome. If you look at what drives these communities, it's not the huge jackpots or the hope of earning a paycheck or turning pro. It's really about just gathering with people you trust -- your friends and friends of friends -- and enhancing the excitement with some cash. That's really the mentality that we wanted to tap into.
Robinson: Are you integrating with Facebook or other social networks to help simplify the process of playing friends online?
DeSanto: We've heavily integrated with Facebook connect. When you sign up through Facebook connect, we automatically import all of your Facebook friends who already have accounts with us and place them into your GameSetCash friends list. Also, after you sign up, if one of your Facebook friends signs up, you'll be notified of that. So we've made it extremely easy to create a private tournament and invite your friends. With only a single click, you can send out an invitation to any of your Facebook friends, your Gmail, Yahoo, or MSN contacts. Not to say that we've neglected the people who want to play random opponents for cash. On the contrary, we've put a tremendous amount of time to ensure a competitive landscape. We've developed a proprietary ranking system, which prevents people from intentionally throwing games to lower their ranking. In addition, we'll have community moderators closely overseeing all activity, and we also have software that flags suspicious behavior. For instance, if a high ranked player plays ten $1 matches in a row, then decides to play a lesser skilled player for a large amount of money, their account will be red flagged. So I think it's safe to say that we've taken all aspects of this space into consideration when building the site. But really, the emphasis here is on friends playing friends or other trusted competitors.
Robinson: Say none of my friends are gamers. How do I find someone to play that isn't going to hustle me out of my money?
DeSanto: If none of your friends play and you're willing to play random people, every logged on user is signed in under a specific game, so you can just navigate the list. We've color-coded the rankings, so it's extremely easy to find an opponent who is of similar skill to you. Another thing you could do is create a public tournament and that will be open to everyone on the site or you could just join a public tournament.
Robinson: But if I'm just playing my friends, why do I need you to hold the money? What do I get out of having a middle man?
DeSanto: Anybody with any experience in fantasy sports or fantasy football knows that there is always that one friend who holds out on paying until you hunt him down. There's always that one guy who has every excuse imaginable not to pay. So we handle all of the transactions (for a small fee), and with tournaments, we automate the entire process. Brackets are laid out and it's very clear who you have to play next. Not only that, we've included some social hooks where if you're playing a friend and you win, you have the option to have that posted on your Facebook wall for all of your friends to see.
Robinson: What games are eligible?
DeSanto: Out of the gate we're supporting the majority of EA Sports games, which are "Fight Night Round 4," "NHL 10," "Madden NFL 10," "NCAA Basketball 10," "NCAA Football 10," and "FIFA Soccer 10."
Robinson: Why only these games? Why isn't "NBA 2K10" on the list?
DeSanto: We're only supporting games where we can verify the outcome. EA has made this possible through a function they have built into their games where it automatically sends us the results after each match. We didn't want to rely on any type of honor system or excuse system ... it doesn't work.
Robinson: How is this legal?
DeSanto: Online gambling is defined as wagering on something where the outcome is determined by chance or wagering on something where the outcome is determined by somebody else's performance. What we're doing is considered games of skill for cash, so it's not considered gambling. On a federal level, it's entirely legal, but right now there are about 20 states which explicitly ban any types of games of skill for cash activity, so we obviously won't operate in those markets or jurisdictions.
Robinson: What's the maximum bet somebody can wager on the site?
DeSanto: Right now, it's $1,000. We're really encouraging smaller bets, between $2 to $5. This really isn't a place for somebody to come if they're expecting to win $10,000 in some tournament.
Robinson: So is there a minimum bet per game?
DeSanto: The minimum bet is $1, and we actually restrict the maximum bet for the first 15 games that you play. So the first five games that you play, you can only bet $5, and the next ten after that you can only bet $10.
Robinson: How do you verify how old people are who are betting on the site and that people don't open multiple accounts to try to get over on unsuspecting gamers?
DeSanto: We have a free to play service where you can just wager points, and that's open to everybody. Anybody in the United States can access that portion of the site. But when users go to the cash play section of our site, when they first try to deposit their money, we take their information and send it to a service that runs that information against public records and data bases and we can verify user identity and location 100-percent. This process also enables us to ensure that each player will only have one cash account, so that way you don't need to worry about a player having two accounts, one with a really high ranking and one with a lower ranking used to hustle people.
You have to be 18 to play for cash, and the security service verifies the age for us as well.
Robinson: How does the money change hands?
DeSanto: We use PayPal as our credit card process. This is the easiest way for us to process payments and it enables gamers to cash out. They can either have a check sent to them or we can just deposit the money straight into their PayPal account.
For us, though, like I said, it's not about trying to earn a living playing "Madden" on our site. The nature of the industry is moving to social gaming, and I think we've done an extremely good job of making video game play much more social than it used to be. We want to be the place you come to play tournaments with your friends, and we're going to make sure that for once, everybody actually pays up.