Before launching uJogo, a rewards-based poker site, its founders paid research firm TNS to conduct a study that they hoped would shed some light on the online poker market. What they learned was compelling: There are about 30 million adults who play roughly three hours of free online poker a week — in other words, there are some 5 billion person-hours a year out there, just waiting to be monetized. And even that is only a fraction of the 23 billion person-hours a year spent on casual gaming as a whole.
But poker wisdom holds that a player has three tools at his disposal: his hand, his chips, and his opponent. The simple fact is that people play differently when there’s nothing real to lose.
In the U.S., however, legally it’s hard give players something to lose. The Unlawful Internet Gambling Act of 2006 tried to stifle domestic gambling by prohibiting U.S. financial institutions from funding gambling accounts. Players wanting to play for money circumvented this by working with foreign e-wallet or fund card accounts. Even Yahoo UK has tried for-money poker offshore, as Techcrunch reported last year.
The result has been good gameplay on offshore sites, and a less enticing experience onshore.
So uJogo set out to find a way to give players the feeling of having something to lose, without running afoul of the law. First, it launched a web-based game. And last week, the company launched a new Facebook application, built on the same technology as the web portal it has been running since June of 2007.
Making people play for real, for free
In fact, the Net is full of free poker sites, among them Yahoo and Partypoker.net. Facebook’s Texas Hold’em Poker application is the third most active application on the site, having been installed some 5.4 million times. It has over 370,000 players active daily, and a viral model that gives players more chips when they invite their friends.
uJogo is free, too, but it offers a reward model. It’s not the first to pay players: There are other private companies (such as Prizewagon, Triplejack, and the National League of Poker) that offer some forms of compensation. uJogo is betting that its combination of gameplay, tournament models, and social networking alongside rewards and sponsorship can differentiate it.
At uJogo, players earn points for things like signing up, inviting others, time played, certain winning hands, and number of games played. These points are then redeemed at the uJogo store. Players also win points for being top-ranked on the leaderboard. They start with 1,000 chips each, and if a player runs out of money, they can reload to 1,000. Currently, players can reload infinitely, so there’s nothing to discourage a new player from playing recklessly, at least at first. But as they build a higher bankroll, the threat of losing it all and starting at 1,000 again becomes real: Only the top bankrolls win the big points rewards on the leaderboard.
In the future, the company will limit the number of times a player can reload in a given period. But CEO Eric Gonzales points out that in certain tournament formats, such as multi-table or sit-and-go games, going all in isn’t an effective strategy. “Rewards and type of game are what really deter people,” says Gonzales. “What the good players end up doing is playing the higher-stakes tables because new users can only reload to 1,000 chips.”
Where does uJogo get its money?
uJogo targets the U.S.-based “serious amateur” — someone who wants to become a better player, but doesn’t want to break the law. The company generates revenue from advertising and licensing, though it ultimately wants less intrusive forms of promotion, such as logos on the table or the cards. Players are rewarded based on their chip totals. In addition, the site also offers more advanced features, such as multi-table tournament play.
uJogo also signs up sponsors, an area where Gonzales sees the most opportunity. “There’s a fair amount of interest from casinos because they don’t have much of an online presence, and uJogo is a way for them to dip their toe in the water with an online poker system that’s legal,” he explains. And he notes that the firm has been very conservative with its legal position: While casino-related rewards such as hotel points or in-person tournament buy-ins might be possible, the relationship is primarily a way of bringing casino branding online.
uJogo also wants to capitalize on training and statistics by offering education and play analysis for a small amount each month. “Nobody focuses on training,” says Gonzales. “The for-money sites have no desire to improve people because the bad players make the good ones stick around.”
Even legal poker sites have challenges
Online poker sites, even the free ones, aren’t without their challenges. For one thing, the more closely a site engages its members, the more it needs to police social interactions. uJogo has faced an increase in offensive chatroom activity in recent weeks from users that seem to be targeting the site. “It’s almost as if someone is trying to bring us down,” says Gonzales.
Another challenge is the pressure to deliver increasingly immersive user experiences. Offshore, for-money site PKR differentiates itself with a 3D interface that’s won considerable praise. But Gonzales says he doesn’t think uJogo will get drawn into a race to deliver immersion, focusing instead on the partnerships, prizes and gameplay.
Given the relatively small up-front investment and return of casual games, traditional VCs might be unwilling to back startups like uJogo. Gonzales says responses were varied: “In the poker space, there is interest but there’s also a fundamental concern — it’s poker!” But he feels that investors are waking up to the casual game space as a whole. Indeed, uJogo seems more like a media company than a game: The average gameplay session of a poker player is roughly 90 minutes, during which players might also be watching TV.
If uJogo can give players the feeling of having something to lose, without running afoul of gambling legislation, it may be able to deliver a better user experience and win a loyal following — particularly as players move to Facebook and mobile platforms. But to really win, it needs to strike partnerships and sponsors that will help it to monetize those 5 billion hours a year.

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