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EXCLUSIVE: Mitch Garber Talks CES 2013, Social Gaming and U.S. Regulation

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After nabbing insightful interviews with Roderick Wright and Wes Ehrecke at the NCLGS, Marco Valerio booked it back across the Strip for the mother of all Vegas conferences – the 2013 Consumer Electronics Show.

It was at CES that Marco spent some time with Caesars Interactive Entertainment CEO Mitch Garber.

Their conversation took place after Garber’s participation in a CES Featured Roundtable – Viva Las Vegas, Monetization 3.0 – Opportunities In Online Casinos and Gambling for Games and Media Companies – that brought together experts from the worlds of real-money gaming, social gaming and content development.

Valerio: How much time did you spend at the Consumer Electronics Show [CES] this year?

Garber: Not a lot. You know, we took advantage of the fact that people were coming in from out of town for CES and we took a lot of meetings, so actually the better question is, how much time did I spend sleeping? The answer is very little. We’ve been meeting with people for the last 3 days.

CES is a fantastic show. I haven’t had a chance to see a lot of the technology I wanted to see, but can’t do everything.

What do you think the relationship between real money gaming [RMG] and consumer electronics has been like this week during the show?

I don’t know that there is a big connection, because real money licensed gambling is about 15 years old by now, so the platform providers have their own shows. ICE is coming up in February in London, and it’s going to be a much more focused show for the online gambling world. CES is more of a show for people at a high level to see what’s happening in handsets, what’s happening in tablets, what’s coming next, so those are the things that are most interesting here.

If online gaming, and certainly social gaming, are heading in this mobile direction, do you think RMG might one day play a bigger role in consumer electronics?

I think what’s happening in tablets and smartphones is definitely going to be impactful to the industry and to our business. Already in the social mobile business, every time Apple launches a new iPhone, or Samsung launches a new Galaxy, we see an incredible spike in the download of Apps and in our revenues. This competition now between Android and Apple and the way that it’s going, and the number of new handsets that are being released, and the frequency with which they’re being released, all of this is extremely good for the overall industry.

I’m talking now about social and mobile. It may ultimately be the same for real money gambling.

I heard you make this distinction between social gaming and real money gaming during the panel discussion as well. If I remember correctly, you stated that, unlike many of your competitors, you don’t see social gaming as a supplement to RMG. Could you reiterate that point, please?

Yeah, I think the point is that, you know, it’s easy to look at it and say that it looks like a complementary business, but it’s a multi-billion dollar business, so for us it’s a standalone business, it’s a business that makes a lot of profit. It’s got, I believe, a different type of customer than the RMG business. It has a reach that is far greater than the real money gambling business. The RMG business, which is a regulated business in very few jurisdictions in the world, is very different from a social mobile non-gambling business, which is not regulated and which is basically permitted everywhere in the world. So I see [the latter] as a standalone business, and I’m quite unsure that, if you wanted to convert those social players into real money gambling players, I’m quite unsure that the percentage would be great.

You also said that the media often misunderstands the relationship between the two.

Right, so just because it looks like a slot machine or it looks like a casino doesn’t make it gambling. The same way that Farmville is not a real farm, and the Department of Agriculture does not get involved in the Farmville game. We don’t have the criteria that would make them gambling games. They’re just social, fun games to be played largely among friends.

It’s natural that the industry of social mobile games is not yet well understood because it’s very, very new, so I think you have to be patient and take the time to explain what the games are, how they work, what the mechanics are, why people play them.

There’s a general question among people who are not savvy that is, why would anyone spend time playing these games, and why would they buy virtual coins, with no chance of winning any money? And the answer is simple: it’s entertainment. You buy a ticket for a movie, and you don’t get any money back, you get entertainment back. You play Pacman, when I was a kid, and if you want to continue in the game, you can deposit another quarter and continue where you left off, and you bought entertainment out of it. And so this is very much the same as the Pacman game or the movie. It’s a form of entertainment.

What was it like today during the session today? How did you like the discussion with the other panelists?

I did not know all the people that were on the panel, [but] it’s interesting to hear different points of view. Always interesting to be talking about Zynga, always interesting to be hearing people like Brock [Pierce] talk about social and mobile games and what he sees the convergence one day will look like.

You know, I’m very focused on Caesars, and on all of our businesses. We have a land-based World Series of Poker business, a land-based casino business, we got a real money online licensed gambling business in Europe, we’re preparing and spending a lot of time preparing for the Nevada real money online poker launch – in the first quarter, we hope. And then of course, our social mobile games business where we just concluded an acquisition. So I have a lot to talk about, certainly. And I enjoyed meeting the people on the panel for sure.

Final question… As one of the most powerful men in gaming and online poker, what is your message to poker playing community in the United States who is dying to be able to play online poker again, in Nevada and elsewhere?

Look, it’s a slow evolution. Of course the professional poker players and the amateur poker players would like to be able to play any time all the time online. We would like that to be the case as well. We would have liked to see a federal bill passed by now. But I think if you’re patient, you’ll have online poker in Nevada. If we execute it well and the players play it, we can show governments of other states, as well as the federal government, that this is an activity that is easy to regulate, that can be taxed, where the fraud can easily be managed, and we know that all these things are true.

Nevada is once again going to be the lab for the rest of the country. It was the laboratory for the rest of the country in terms of licensing land-based casinos, and it will be the lab for the rest of the country in terms of licensing online poker rooms. So if I were a poker player today, which I am, I would be particularly excited once the first online poker bet is taken in Nevada, because once that door is open, I can assure you it’s going to open wider and wider, and wider, across the United States.

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Marco Valerio
- Marco is a contributor to OnlinePokerReport. You can read more of his writing - and catch his epic interviews with a who's who of poker - at a variety of iGaming publications, including TwoPlusTwo, GlobalGamingBusiness and