Home ShopTalk Seattle’s Virtual “Double Down” Casino Sold for $500 Million

Seattle’s Virtual “Double Down” Casino Sold for $500 Million

Cashing in on online poker may still be illegal in the state of Washington but free-to-play Video Poker, Blackjack, Slots, Roulette and other online casino games have hit the virtual jackpot for Seattle-based Double Down Interactive (DDI).

The Seattle startup has been acquired by International Game Technology for $500 million. Counting up the chips,  the deal includes $250 million in up-front cash, $85 million in scheduled  future payments and up to $165 million in cash over the next three years based on targeted goals for the merger.

Facebook recently named DoubleDown Casino the fourth-most popular game of 2011. The smoke-free, online playsite attracts 1.3 million daily active users and 4.7 million monthly active users as reported by AppData.  All Things Digital reporter Tricia Duryea described DDI’s game on Facebook as akin to visiting the Las Vegas strip.

Speaking of Vegas, with organizations like Caesars Palace and IGT “anteing up” major invertments in the social gaming ring, not to mention America’s desire to beat back the federal budget deficit, legalized online gambling could be closer than we  realize.   When and if that day comes, Mark Zuckerberg could become the Steve Wynn of cyberspace, if not on U.S. shores, then at least in one of the more than 30 countries where Double Down operates. The Facebook business model keeps a certain percentage of revenue derived from its game developer “partners.”

The virtual currency of Facebook Credits can never be cashed out without violating the prohibitions of U.S. gambling laws.  However, even with the “net cash neutrality” (aka “play money”) proxy, casino style gaming is considered the fastest growing segment of the social gaming market given the addictive nature of the games.

New owner IGT is a force in the design and manufacture of gaming machines, and its bet on Double Down could be its ace in the hole, the “nut” it needs to run the table in online gaming.   The company acquired Stockholm-based Entraction Holding AB in 2011  supplementing its position in the legalized interactive gaming market.  IGT has also ventured into the cloud computing arena through its IGT Cloud. With the IGT Cloud services, analysts predict IGT could  gain traction in the casino gaming industry, as it would likely be well accepted by new casino properties

DDI’s local co-founders Greg Enell and Cooper DuBois bootstrapped the Facebook game start-up with proceeds from an earlier Seattle startup company, Pickjam, and reached profitability in four months.  It added 26 employees by the end of its first year. Company president Glenn Walcott was the former CFO at Big Fish Games and VP of Business Development, Charles Harper, the former GM of Global Business Development at RealNetwork’s GameHouse. Currently, IGT has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.

“We saw the popularity of Poker games on Facebook and quickly realized that virtual currency was the way to remove the true gambling component, while retaining a valuable monetization method. With that realization, the DoubleDown Casino was born,” said CEO Greg Enell in an earlier interview.”

“We’ve married a legal virtual currency model with great multiplayer and single player casino games to provide consumers with a fun casino experience that’s always on and accessible from the comfort of home. At our casino, players come together from all over the world to play slots, blackjack, roulette and video poker. They buy virtual currency, they sit at tables together, they chat, they “friend” one another, and they win or lose together. It’s a fun, social and dynamic entertainment experience that’s proving very popular, with more than 300,000 consumers playing each and every day.”

Those numbers should grow ever greener with IGT’s chip stack. [24×7]

Visit Double Down on Facebook


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