Probability Takes Turn on P-to-P

Probability, the mobile gambling specialist, has launched a new player-to-player gaming platform that its chief executive says makes apt use of the latency inherent in wireless communication.

The Zaphod platform -- named after the two-headed character in Douglas Adams' 1978 science fiction radio play "The Hitchiker's Guide to the Galaxy" -- makes possible turn-based p-to-p gaming.

Put simply: "It's me; then you; then me; then you," Charles P. Cohen, chief executive of Probability, told IGamingNews Friday. "The turn-based thing is really important because true real-time gaming can't happen on a mobile phone because of the latency."

Latency refers the amount of time it takes data -- called packets -- to cross a network connection. (If, for example, you've been on your mobile in the United Kingdom, and had to wait an agonizing second or five for an "I love you too" from your significant other in Macau, you've experienced bad latency.)

The first title on Probability's platform -- a Texas Hold 'em variant called Head-to-Head Poker -- launched last week, while other games like Connect Four and Battleship are set to be released later this year. Mr. Cohen said Connect Four and Battleship, especially, have mass-market appeal because consumers know both games so well.

Unlike its sector peers, meanwhile, Mr. Cohen said Probability saw limited opportunity in developing a sportsbetting platform. He called turn-based p-to-p gaming a "bigger commercial opportunity" because the betting markets, especially in the United Kingdom, are saturated, and margins, slim.

"We just simply weren't going to make any money out of it," he said.

While the gross margin for p-to-p games is lower than traditional casino games -- the company's operational focus prior to now -- Mr. Cohen said the p-to-p margin is less likely to fluctuate violently. Fluctuations, anyway, are not new to the company, for recently, a higher-than-usual payout ratio at its Ladyluck's casino took a near 5 percent bite out of third-quarter income.

"The fluctuation in revenue on p-to-p will come entirely down to the number of games being played and the average values," he said. "You're not worried about one guy walking out with £10,000 of your money."

Mr. Cohen said the offer will be available on a white-label basis, and that it will be working with its current partners, Rank Group and Rupert Murdoch's News Corporation, on integration.

With Zaphod, Mr. Cohen thinks Probability is positioned well during a period when the online gambling industry becomes increasingly product-focused. He agreed with Mark Blandford, who spoke with IGamingNews recently, that 2009 will be a year when product development is of paramount importance.

With the days of all-or-nothing platform provision on the wane, operators are under pressure to license -- or even develop, in-house -- the best content. 888 Holdings and PartyGaming, for instance, are now licensing own-label services while at the same time offering games content from newfound rivals to keep customers at their online properties.

Mr. Cohen projects that competitive pattern will play out -- only faster -- in the mobile gambling industry. He thinks that online gambling operators looking for a mobile proposition could take traditional casino games from any number of providers, but that unique content will ultimately be what distinguishes the winners from the losers.

"By the end of 2009, you're going to see some people disappear, some models fail, but the stronger players will become dominant in their sectors," he said.