Skill-based games growing in popularity
By Paul
Online gambling in the US may have been dealt another blow with the passage of the Leach Bill through Congress, but there is another way to make money online by playing card games – although it’s solitaire rather than blackjack.

Analysts say the market for “skill-based” online games is expected to grow significantly in the next few years, from $210 million in revenue last year to a projected $2.55 billion in 2006.

Operators of casual game sites such as Vivendi Universal's Flipside and Internet conglomerate eUniverse are showing interest in skill-based games, which offer a simple, reliable business model. Customers pay an entry fee--anywhere from 50 cents to $20--to join a tournament game, which can have anything from a couple of players to hundreds. The site takes a cut of the entry fees, and the rest goes into a pot to be claimed by the top player.

Michael Goodman, an analyst for research firm The Yankee Group, thinks that’s a winner for an Internet based business:

'You've got a revenue generator where you can very closely track your revenue against your expenses,' he said. 'And you can still do advertising if you want another revenue stream.'

WorldWinner is the leader in the skill-based category, with 70,000 paying players. Flipside entered the market last August with a menu of fee-based games on its iWin site.

However, games need to be designed to minimise the component of luck, to satisfy gambling regulations that vary from state to state. Each skill-based gaming site excludes residents of certain states with potentially problematic gambling regulations. Flipside's iWin is one of the more open operations, offering some form of fee-based games in all but four states.

'We've worked with the leading legal authorities in each state, and we feel very comfortable that we're satisfying the legal issues in each state we work in,' Glass said.

Scott Belsky, a Los Angeles actor who supplements his income with winnings from WorldWinner word games, said the element of chance fades the more you practice.

'I've done a lot of Vegas and Tahoe gambling, and this definitely feels different,' he said. 'This is much more about skill, although I don't think it's 100% skill. Some games are like solitaire, where you can't complete the game if you make a certain choice, and there's no skill you can develop to tell you which choice to make every time.'

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