(Photo: @TeslaRoadTrip)

What's an attention-whore to do when the press stops turning up? John McAfee had an idea: he gave two freelance journalists $2,900 in cash to follow him to the Caribbean and document his reunion with his 19-year-old girlfriend. [PandoDaily]

There may still be plenty of complex issues to be resolved before online gambling is legal in the U.S., but that isn't stopping tech companies from lining up at the regulatory gates. [NYT]

Kim Dotcom says Mega is "the Privacy Company." To that end, Mega is now accepting payment by bitcoin, and plans to offer secure email and chat services.  [Mashable]

After New York Times reporter John M. Broder wrote about the failings of the Tesla Model S during his road test along I-95, nine Model S owners attempted to create the trip. Four drivers completed the 353-mile leg between Rockville, Maryland and Groton, Connecticut, though of the five drivers who dropped out, none reported the battery failures that dogged Mr. Broder. [AllThingsD]

In the aftermath of Ecomom founder Jody Sherman's suicide—and word that the company is heading for liquidation—an argument that "'Killing It' Isn't Worth It." [TechCrunch]

Multiple sources have told Betabeat that IAC shuttered Hatch Labs--its incubator for building mobile tools, apps, and platforms--on December 31st. Hatch Labs closed both its fifth floor offices in the IAC building on 18th street and in Los Angeles.

"After exploring several strategic options for Hatch Labs, IAC stopped investing in the company, and their operations were subsequently discontinued," IAC said in response to questions. "IAC is still funding and exploring options for a few of the assets that came out of Hatch Labs."

Hatch Labs’ New York space is already occupied by other IAC entities. (The only exception is Blu Trumpet, which was spun out as an independent company in 2011, but remains in the Frank Gehry building.) When we stopped by the office last May, it had all the accoutrements of your standard startup accelerator, including a ping pong table and drawers full of free snacks.

"It didn't make sense in the corporate entity of IAC," said one source familiar with Hatch Labs. "These businesses should have a more diverse set of funds from VCs, who can support them in a way that a corporation can't." Considering that successful startups from Hatch were permitted to seek outside funding--if they could raise it--that may not have been the full story behind its demise.

As the accelerator bubble begins to deflate, even prominent venture-backed outfits like Y Combinator are trimming the fat. As we reported last September, AOL Ventures also sunset QLabs, its Soho think tank of hackers that failed to get traction.

Hatch Labs, which invested in proven entrepreneurs rather than concepts, lists ten startups on its website. (When we spoke with CEO Dinesh Moorjani last May, he said Hatch Labs had built seven business and wound down one.) Tinder, a recently launched casual dating app cofounded by serial entrepreneur Sean Rad, the former head of Hatch Labs' L.A. development team, has been gaining popularity with "normal, non-geeky people," on college campuses and is still operating. We hear Cash Island (sometimes referred to as CashPlay), a "real money" slot machine app that lets users win gift cards and get extra turns for taking surveys is also continuing on, although its website is currently offline.

Other Hatch Labs startups have taken the opportunity to shut down efforts that weren't paying off, par for the course of an experimental incubator. The websites for BroDown, an app that lets you challenge people around the world to a push-up contest, and Cardify, a customer loyalty app, are both down. A source called the transition "really smooth."

When Hatch Labs was unveiled in March, 2011, IAC billed it as an "innovation sandbox" designed to rapidly prototype and launch technology related to the emergence of mobile. (In that respect, IAC had a head start on Mark Zuckerberg, who didn't recognize the shift towards mobile until late 2011.)

Mr. Moorjani, a Harvard MBA who started IAC's mobile group back in 2007, quietly founded Hatch Labs in 2010. But in 2011, the incubator formally debuted as a joint venture between IAC and Xtreme Labs, a successful Toronto-based mobile development shop, which recently opened up offices in New York City. Reports differ, but Hatch teams were given three months and capital from "well into the $100Ks" up to $1 million.

The amount of funding Hatch Labs received from IAC and Xtreme Labs wasn't publicly disclosed. However, in a 10-K filing from February 2012, IAC reported that operating income before amortization loss increased from $500,000 in 2010 to $12.1 million in 2011. That was due in part to Hatch Labs, as well as operating expenses at its production studio Electus and lower revenue at Pronto, its comparison shopping engine. In a 10-Q filing from November 2012, IAC reported product development expenses of $2.7 million "primarily due to increased investment in Hatch Labs." It's also unclear whether Xtreme Labs continued to invest after 2011.

In interviews, Mr. Moorjani consistently stressed how Hatch Labs was different from traditional incubators or bootstrapping a startup because of its emphasis on helping proven founders with product building and marketing, which he pegged as particularly difficult. A recent report from the ad network Adeven predicted that the iOS App Store would see 435,000 new apps this year, but that most would go unnoticed. IAC's networks, data and experts could help with that, he argued. He also said Hatch Labs benefitted from investing in entrepreneurs with skin in the game. Startups had equity in their own product and in Hatch Labs overall.

On LinkedIn, Mr. Moorjani lists his tenure at Hatch Labs as ending in January. He is also the cofounder of Kleverbeast, a mobile publishing platform still in beta. In an astute op-ed last month in the Huffington Post, he name-checked Kleverbeast for its ease of building iOS and Android apps "without typing a single line of code," as a sign of the democratization of app development. He also mentioned CashPlay when he predicted mobile gaming would return to its casino roots.

In the piece, Mr. Moorjani also delved into a return to rationality in funding, writing:

"Mobile is no different. Many startups will unravel, unable to secure additional financing, because some of these deals should never have been seeded at inception. The dearth of capital leads to funneling investment dollars into quality startups, and consequently, carnage among companies that lack sustainable competitive advantages, talented teams or noteworthy market traction."

UPDATE 2/2/2013: A representative for Mr. Moorjani offered the following statement about Hatch Labs by email:

"Hatch finished deploying the capital from the first Hatch fund over the past two years and IAC is now managing the portfolio of ventures that were built, including Tinder, Blu Trumpet, etc.  Dinesh is raising his second Hatch fund outside of IAC with their support, and Xtreme Labs who has expressed interest in participating in the fund.  As a co-founder, he is currently focused on building Kleverbeast, a NY startup, into a world-class mobile SaaS company, and advising various companies, whose Boards he serves on as a director and/or advisor."

We have reached out to Xtreme Labs and we will update the post when they respond.

You know what happens to Joe Pesci at the end, right? (Photo: Wikipedia)

Bad news for anyone looking to launch a real-money gaming startup: The AP reports that in a recent poll, half of respondents said they wanted sports gambling legalized--but a whopping three quarters thought Internet gambling specifically ought to remain off-limits.

Guess everyone just wants to stake their paycheck on how Eli Manning feels this weekend?

The AP says opposition is even fairly bipartisan:

"The poll also found that political affiliation made little difference in attitudes toward Internet gambling; 27 percent of Democrats and 26 percent of Republicans supported it, while 59 percent of Democrats and 63 percent of Republicans opposed it. Independents had roughly the same levels of support, as well."

Finally, something America can agree on. The poll, which measures national sentiment, comes on the heels of New Jersey state legislature Internet betting bill. It's not clear whether Gov. Chris Christie will approve it, though.

The company likeliest to be disappointed by this is Zynga, which is gearing up to offer real-money gaming in the U.K. and would sure love another way to separate Americans from their dollars.

Then again, the U.S. Congress is all too often an enigma wrapped in a riddle shrouded in mystery, so who knows what they'll do. Let's not even talk about state legislatures.

"Any horse that has the name 'Awesome' in it? I bet on it!" Walter Hessert told us earlier this week from inside one of those noise cancel-ish sofa pods in the south wing of General Assembly. Also present in said pod: his brother Thomas Hessert. Along with a third brother (Bill) and their CTO Eric Gay (no relation), the Hesserts are the cofounders behind Derby Jackpot, an addictive online game that almost made Betabeat late for our meeting.

Showing up for an appointment seemed more professional than waiting to see if we'd parlayed the $2 offered to beta users into something more, so we sucked it up and hopped on the N. But it was a heady example of why companies like Zynga are counting on real money gaming to offer real revenue in the otherwise hits-dependent social gaming industry that relies on ad revenue or virtual sheep. 

Tom Hessert, left, and Walter Hessert

Users who visit Derby Jackpot's HTML 5 site--the company is opting for the mobile web over an app--are greeted with a big countdown clock at the top of the page that tells you when the horse race is happening. Horses are displayed according to their actual names and the odds of winning (at the time.) You can place different kinds of bets--"monkey bets" offer higher payoffs than "grandma bets"--and chat with other players. Once the race starts in real-time, you can see feed from the track. The suggested betting amounts are small, and it's easy to keep an eye on the race while toggling between tabs.

Unlike other horse betting sites, Derby Jackpot's overall effect has the come hither look of a slot machine with the friendly, simplified interface of your average social game.

"It’s built for social gamers and casual players," said Tom. "We didn’t want it to look hardcore at all. Or too intense. Or huge numbers. Just for players who want to come and test their luck and have fun."

Derby Jackpot expects to come out of private beta early next year. And thanks to a new partnership with the payments company Dwolla--hyped during a recent gambling party with Derby Jackpot winnings flashing on high-defs TV screens--users can take out their earnings immediately rather than wait for a check in the mail.

The idea came to the Hesserts during a trip to the Preakness, said Tom. The machines were complicated and the racing lingo intimidating, but it had all the components of the core gaming experience. Especially after he won $25 on 5:1 odds. "So we looked at it like why haven't we done this before and why isn't it easy to do online? Why do you only hear about this maybe once a year during the Derby or the Preakness?"

Bill Hessert, a data scientist, had been studying horse racing while getting a masters degree in quantitative finance in Princeton and knew that the 50,000 live races that happen 364 days a year (ponies get the day off on Christmas) offered ample opportunities. As a research project, he had been working with the Jockey Club to study data like efficiencies and handicapping. In fact, as Betabeat mentioned back in April, Freakonomics author and economist Steven Levitt, one of Bill's former professors, is an advisor to the startup, which also boasts an advisor from Zynga.

The brothers are still tight-lipped about the "billionaire" investor, who helped contribute to the $1 million they raised in seed funding. However, they did say Derby Jackpot's team of seven is well capitalized and not looking to raise.

They also maintain that they're not looking to get acquired, should Mark Pincus come sniffing around, which seems inevitable. Almost every question during Zynga's last earnings call was about their partnership to offer real money poker games in the U.K. Derby Jackpot, on the other hand, is able to get into the U.S. market because unlike the crackdown on online poker, online horse racing is legal in 29 states.

In order to let off-track-betting (OTB) locations call in their bets to tracks, said Walter, the Wire Act, which prohibits placing wagers across state lines, made an exemption for pair-mutuel horse wagering. "Gradually that’s evolved into including Internet ADWs or advanced deposit wagers and that’s been updated in all the online gambling laws," added Tom. Derby Jackpot is required by law to ask for the last four digits of your social security number and address.

The company's relationship with regulators and individual track owners might be enough to keep competitors (ehem) from simply copying their concept. Track owners may not be a tech-savvy bunch, but they've had rudimentary APIs in place to serve OTBs and casino for decades. "If you're betting on horses that are running around a track in Philadelphia, your bets are going to that track and betting against all the other bets," Walter explained.

"They could just copy our interface," he admitted, but navigating the industry is tough. Derby Jackpot has contracts with 100 tracks in the U.S., although not exclusive ones. It has deals with video providers and went through the year-long regulatory process. The company has rev share deals with the track owners as well. "It’s like a gas station," said Walter. "A gas station sells lottery tickets, you get a small percentage of each dollar bet. We don’t take any of the players winnings," adding, "At the end of the day, you have to get permission from the tracks to put your users’ wagers in their pools."

Among beta users, the average player typically deposits $25, and usually plays for two hours or so. "Some people like to go bigger, some people like to play the Granny bet all day long. Literally you can play that all day long. If you pick the favorite in the Granny bet, chances are you’re going to win," said Tom.

During a chat session with Derby Jackpot's fellow friendly beta users, we were buoyed by one user fondly remembering the day Walter "hit $947.00." Sadly, despite an influx of $10 offered to party-goers and a one-time high of $18.40, our account is now at 40 cents. Betabeat came close to Dwolla-ing $25, and the cha-king sound to let us know the first race just started makes us want to pull the trigger. The surprisingly fun social features also help suck you in. As do the the stream of tweets announcing tips and winnings, although our Twitter feed might be biased.

@andrewjbryk also don't bet until under 2 minutes before. odds are not locked in and change rapidly at end.

— Alexander Taub (@ajt) November 29, 2012

The public version will enable even more interaction with players. "There’s a lot of very complex things that happen in horse racing that take some creativity to turn them into a super product," Walter said. "So we’ve really worked out a lot of that. Now we’re just making it more robust in a social sense."

According to the countdown clock luring us in, Betabeat has 53 minutes and 49 seconds to decide if we're gonna pony up for the next race.

Mr. Pincus.

Both Facebook and Zynga filed documents with the SEC today detailing the terms of a new, more lax partnership. The two-year-old contract between the once interdependent companies--just check out their IPO filings--was slated to expire.

Under the loosened agreement, Zynga is free of a number of obligations, including implementing Facebook credits on Zynga game pages and using Facebook as its exclusive social platform. Naturally Zynga is interested in establishing its own network, with the ability to own its own players and establish its own ad relationships. Zynga also no longer has to display Facebook ad units, for example.

But Facebook also got one (big!) thing: the ability to develop its own games. That might explain why Zynga stock is trading almost 13 percent down after hours. 

The one area where Facebook wasn't willing to let Zynga go? All together now: Real. Money. Gaming.

If you'll recall, during its recent third quarter earnings call, Zynga announced a partnership with bwin.party that will allow Zynga to offer “real money games” in the U.K., where gambling laws are more permissive. And according to today's Zynga filing:

"If Facebook allows real money gambling games on the Facebook web site in countries where Zynga has real money gambling games, Zynga will subsequently launch such games on the Facebook web site, if certain conditions are met by Facebook."

Sounds like Zuck didn't want to miss out in case Zynga's real-money poker and casino games are everything Mark Pincus so desperately hopes it will be.