(Photo by Jason Sherman)
Manu Gambhir doesn’t like to think of himself as a lobbyist.
“I’m just a guy who wants to make games,” he said.
But Gambhir, who’s worked in Internet gaming for nearly two decades, knows that working with politicians is necessary because of the regulations around his industry. He needs to understand how legislators think, he said.
“I can’t do my business unless legislation permits it,” the Thrive Gaming CEO said at a Startup Grind event during Philly Tech Week at Benjamin’s Desk. (Find video of the event below and photos here.)
I-gaming is legal in three states: New Jersey, Nevada and Delaware. Thrive Gaming used to help Las Vegas-based Wynn Resorts with its online gaming strategy and planning. But legal online gaming is coming to Pennsylvania in one to two years, Gambhir said.
Regulations are actually part of the reason Gambhir, a West Philly native, left the city for the United Kingdom. There, where it’s legal, he ran online gaming company Kismet Studios, which was eventually acquired by Cantor Fitzgerald.
Gambhir’s second exit was with Ryzing, the first company that offered games on Facebook where users could win money. That company was acquired by San Francisco-based RockYou in the summer of 2012.
He now runs Thrive Gaming out of Benjamin’s Desk.
Since the industry is still so new, it can be like “the Internet in 1995,” he said. The Wild West, essentially.
Here are some more highlights:
His cofounder: Scott Bohrer was an attorney for Wayne Kimmel’s investment firm SeventySix Capital. SeventySix Capital (Artists & Instigators at the time) invested in Ryzing and Bohrer was responsible for conducting due diligence on the Ryzing deal — it took six months, his longest due diligence ever, Bohrer said.
On why he sold Ryzing: We wanted to scale the business and we needed money to do that, so we did a deal with RockYou.
On working with Facebook: Facebook said they wouldn’t shut [Ryzing] down but we wanted to get it in writing. If we were going to put a couple million dollars into the company, we wanted to be sure they wouldn’t shut us down. We went back and forth with them until they finally put it in writing.
One hardship of working in the internet gaming industry: Every state has their own gaming board, so every single update to an internet game must go through them. It’s not like the App Store.
On why internet gaming should be legal: The government should protect the consumer, not let it run unregulated.
On what it will take: There needs to be a cultural shift, states need to realize that they can use the revenue from gaming and legislators need to get a better understanding of the Internet [Editor’s note: That’s something that reddit cofounder Alexis Ohanian, among other people, has said, too.]
On Philadelphia’s investment landscape: There is less capital, but there’s a lot less people chasing that capital. “I see that as an opportunity.”
On Silicon Valley: “It’s kind of a grind-factory” when it comes to big venture capital firms going through companies. There are benefits to a smaller venture firm, like SeventySix Capital.
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