It somehow never really took off. While hundreds of thousands of people use mobiles to access Facebook, Google and social networking sites such as the U.K.'s Flirtomatic every day, betting on mobiles has made only a tiny impact on the worldwide gambling industry.

At the 5th Annual Mobile Gambling Summit in London last week, industry executives were sounding the same optimism about future growth. Could they be right this time?

Charles Palmer, co-founder of Mfuse, a mobile gaming software developer focused on sports betting, thinks so. ``In the past year our clients have taken more than 100 million pounds in bets through mobile devices, which suggests the market is developing very quickly,'' he said in an interview. ``We are developing casino and bingo applications for launch next year and we see real evidence that users are very enthusiastic about mobile gaming.''

Mfuse's clients include some of the world's largest gambling companies, including Ladbrokes Plc, Gala Coral Group Ltd., William Hill Plc, Bet365 Group Ltd. and Rank Group Plc's Mecca unit. Mfuse recently attracted investment from online gambling pioneer Mark Blandford, the founder of Sportingbet.com.

Next Generation

Panelists at the conference generally agreed that mainstream acceptance of mobile gaming was probably three to four years off. One of the main hurdles for acceptance in the U.K. will be when the generation of mobile-savvy kids reaches the age of 18, at which point they can legally gamble on their phones.

Industry experts agree that until recently the quality of handsets and the speed of interactivity meant that the gaming experience on mobiles wasn't attractive to consumers. The launch of Apple Inc.'s iPhone was regularly cited as a big driver to getting people to load new applications onto their mobiles.

``Figuring out how to get playable speeds has taken the company years,'' said Matt Welch, chief operating officer of U.K.-based Cecure Gaming Ltd., which offers poker on mobiles. ``We now have a 0.2 second delay for a decision in poker, which is pretty much the same speed as online. Four years ago that delay was 16 seconds, which meant a hand of poker could take as long as 20 minutes. Obviously no one wanted to play at those speeds.''

More Valuable Customers

From the gambling operator's perspective, getting clients to gamble on their mobiles is compelling because it increases the lifetime value of a customer by a factor of two to three. ``It is massively valuable for us to convert a customer to mobile,'' said Richard Hewitt, mobile product manager for Betfair, the world's largest betting exchange. ``Mobile betting is currently one of the three most important things in the company.''

Pritpal Bains, senior product manager at British Sky Broadcasting Group Plc's Skybet unit, said, ``Only a small percentage of our customer base use mobile gambling but we would expect it to grow rapidly once we have the correct services in place.''

Perhaps the greatest brake on the adoption of mobile gambling will be the attitude of the mobile operators. In the U.K., gambling companies and software providers complain that for years operators such as France Telecom SA's Orange and Vodafone Group Plc have tried to shield their customers from gambling content and therefore stalled the takeup of mobile gambling.

The Queen's Visit

In the past 12 months the mobile operators have started to offer gambling content on their own home pages, or portals, and Vodafone launched a betting portal last week. But even then, the companies are wary of what customers might think.

Mike Higham, business development manager of Vodafone, told delegates at last week's conference about a royal visit to the company. ``The Queen came to our headquarters on Friday and our brand police would not allow betting on the home page. I said, `But the Queen owns horses and is known to bet.' But they said, `We don't care,' and removed the link.''

Vodafone restricts advertising links to casino-type services between 6 a.m. and 10 p.m., although links to sports betting are permitted during the day.

American gamblers are unlikely to see any of these innovations soon. The largest mobile gaming software companies refuse to touch American clients because of questions about the legality of these services in the U.S., and it is likely that U.S. phone companies would swiftly block any gambling sites. So for now, the growth of mobile gaming looks confined to Europe and the small number of Asian countries that permit it.

(Joe Saumarez-Smith is chief executive officer of Sports Gaming, a U.K. management consulting firm to the gaming industry. He also owns European online bingo companies and odds comparison Web sites. The opinions expressed are his own.)

To contact the writer of this column: Joe Saumarez-Smith at jssmith15@bloomberg.net

This article was taken from Bloomberg.com.  To see the original click here.