INTERVIEW: IMSC on reinventing mobile gambling in emerging markets

But this is a very Euro-centric analysis. Look outside of the 'developed markets' and you begin to see how this sector is genuinely flourishing.

Leading the way is International Mobile Sportsbook Company and its Bettymovil service. By building a simple SMS interface and focusing solely on emerging markets, IMSC has accumulated 940,000 customers, who have placed 15m bets.

We asked IMSC's Stephen Ibbotson how they did it...

You seem to have developed a winning formula for mobile gambling. What's the secret?

First off, it's all based around SMS. Obviously, SMS is ubiquitous in Africa and Asia, where we're active. But it's also so easy to understand as a medium. So all the activity is based on text. Basically, we've looked to build a channel based on mobile rather than just stick a mobile front end on an existing system. This is what the big online firms are doing, and it means they're still dependent on the old payment platforms, still competing against each other, and still faced with the same legal issues in most countries.

What sort of gambling do you offer?

It's based around a pooled jackpot for betting on football and cricket mostly. But we can do bingo and lotteries too. We take a percentage of that total, so we need huge totals to make money. Money is paid in via scratchcards, digital top ups or even via a bank. We pay out ten minutes after the event has finished in the form of a code that can be claimed as cash from a sales agent, which is usually the retailer where the voucher was bought. We're present in over 10,000 points of sale.

Where have you launched?

The gambling group Grupo Pefaco has helped us move into new markets, Africa especially. It acquired 22.28 per cent of IMSC and established a joint-venture, Bettymovil Africa in 2009. That enabled us to launch in Togo, Burkina Faso and Nigeria, where we have 100,000 customers now. We're also in Mexico and in China via a partnership with VODONE.

How fast is the operation growing?

We have increased the average bet amount by over 600 per cent versus 2010. Current average bet is at €2.02. The fact that we focus on SMS means our costs of acquisition are much lower than for the traditional online gaming companies. CPA is around €5 for the three West African markets based on bets placed on up to seven football matches per week. ARPU is at an average of €5 per month. However, specifically for Togo ARPU is at €10 per month after one year in the market.

Have you looked at using phone credit as a means of payment for betting?

Airtime would be a good solution. But it's always the rev shares that are the problem. 30 per cent is simply not feasible for us. For the moment it's easier for us to focus on our own payment platform and built-in banking function.

Which countries are you targeting now?

We have to expand country by country because of licensing and regulation deals, so the roll out is gradual. But clearly North, Central and South America, as well as other African countries and Asia are obvious target markets given the characteristics of the platform and products.