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Taking a flyer on gambling?

Airlines have toyed with the idea of offering in-flight gambling for years. But regulatory and technological barriers coupled with financial risks have kept the vast majority of scheduled carriers out of the game.

Even the most aggressive pursuers of ancillary revenue like Ryanair – which intends to harness OnAir’s mobile connectivity service for in-flight gambling – thinks the proposition is “probably three, four years away”.

While industry stakeholders continue to explore ways to turn aircraft into virtual casinos in the sky, there is a low-stakes gaming answer in the cards for airlines.

Portable in-flight entertainment (IFE) device maker digEcor has teamed up with Los Angeles-based start-up Flight Deck Gaming to offer what they say will be memorable gaming experiences to passengers and fresh ancillary revenue streams for airlines.

Under a new exclusive partnership, Flight Deck Gaming is optimising a range of casual, skill-based and casino-style games or “games of chance” for play on digEcor’s handheld IFE device known as the digEplayer.

Brad Heckel, president of digEcor, which has traditionally offered gaming content on the digEplayer from rival gaming content provider DTI, says: “We are in very specific conversations with probably half a dozen airlines, where Flight Deck Gaming is either already included in the contract or is part of the discussion for the offering, and I might add that the airlines have been very receptive to the concept and to what it is that Flight Deck Gaming can bring in terms of games and ancillary revenue.”

ONLINE GAMING

According to statistical research from GrabStats, online gaming related revenue is expected to exceed $20 billion by 2012. In-Stat Research says revenue derived from Wi-Fi enabled devices will surpass $1 billion by 2012. Getting a slice of this pie from airline passengers can be accomplished by capturing pre-flight, in-flight and post-flight revenue, says Flight Deck Gaming managing partner Howard Woods.

Neither Flight Deck  nor digEcor are as yet revealing many details of their revenue model, but Woods says in addition to basic subscriptions, there are advertising opportunities – either alongside or actually embedded into the game itself – and sponsorship opportunities, which work particularly well with network and tournament-type games.

Woods takes the position that airlines should not have to pay for games and passengers shouldn’t have to pay outright to play: “When you look at the entire business chain of the gaming industry, charging the passenger to play is an obsolete model.”

Heckel adds that the Flight Deck/digEcor plan will permit carriers to offer casino-style games such as poker or virtual roulette at “very little risk” to them. And, the same games could be made available in higher stakes modes in jurisdictions where full-blown in-flight gambling is permitted.

Gambling may be a huge business online, but IFE consultant Richard Owen notes that in-flight gaming has not been a huge market up to this point.

“It’s another nice option to add to video and audio. If there is some income sharing opportunities from limited betting, that could be an incentive for airlines. DTI probably holds the prominent position at this point in gaming. How much room there is for others I’m not sure,” he says.

REVENUE GENERATION

However, Woods sees two factors coming together right now to make low-stakes in-flight gaming a viable proposition for airline revenue generation.

He says: “There has probably never been a higher motivation for ancillary revenue in the airline industry. “And, on the other hand, the gaming industry – which has typically been a couple generations ahead and bypassed the airline and transit industries – is sitting down and spending the effort to make the terrestrial gaming model scalable, in an industry that has previously taken a fragmented approach.”

 

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