Facebook and gambling: what it means for brands

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Posted 07 August 2012 20:10pm by Patricio Robles with 0 comments

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Despite its rocky debut as a public company, Facebook is focused on a long-term strategy. Or at least that's what the company's top executives say.

But actions speak louder than words, and it's increasingly clear that the world's largest social network is pushing to increase revenue meaningfully as quickly as possible.

The latest example of that: in what may be one of the most significant moves the company has ever made, Facebook has teamed up with UK gaming outfit Gamesys to launch apps that allow Facebook users in the UK to wager real money.

The first app to come out of the Gamesys partnership is a bingo app called Bingo Friendzy. To play with real money, users must be 18 or older although The Telegraph's Emma Barnett observes that the design of Bingo Friendzy is "very childlike – with cute furry animals adorning the app's Facebook page."

Needless to say, while the introduction of gambling to Facebook's massive network could be a boon for the company's bottom line, it is also bound to raise a seemingly countless number of thorny issues.

Facebookie: brands beware?

While concerns over the presence of wagering apps on a social network that's popular with users under the age of 18 may dominate the conversation about Facebook's new line of business, brands should also be concerned. The reason? In short, Facebook's foray into the world of online gambling may be the greatest example yet of the company's portal problem.

But the implications of this go well beyond the clutter often created when trying to be all things to all people. For brands using Facebook as a marketing tool, the growth of gambling apps could have a long-term impact on Facebook's popularity. If they become too prominent, it could drive some users away. After all, there's a risk that in trying to turn a favorite digital hangout into a virtual casino, Facebook will become a less appealing destination.

For retailers and those trying to transact business, the long-term implications of Facebook's gambling venture are even more concerning. While online gambling is highly-regulated and Facebook has every reason to take the security and integrity of gambling apps it launches or approves seriously, it's not clear that gambling apps will help the company solve its trust problem. For many, gambling is a shady if not sleazy business, and there are logical reasons to believe that the company's involvement in it could have a negative impact on the ability of retailers and others to effectively promote f-commerce -- something that has already proven difficult.

The balancing act

Clearly, Facebook faces a tough balancing act. Can the company pull it off? Perhaps. But as Facebook tries to do more and more in an effort to cash in on its popularity, companies investing heavily in it should be paying attention to the risks. Depending on how aggressive the social network gets, brands may increasingly find that betting on Facebook to expand its footprint without creating collateral damage is an increasingly expensive proposition.