GPS technology has put Booyah right where it wants to be—at the center of the latest hot trend for casual gaming.

The Palo Alto-based startup uses global positioning technology to power a Monopoly-like game in which players “buy” real-life properties and “rent” them to others in exchange for points.

In just two months, Booyah’s MyTown has attracted 1.2 million Apple iPhone and iPod Touch users and won two product-placement advertising deals, one with the global clothier H&M.

In the game, players purchase and improve properties with points earned by “checking in” to businesses and completing tasks, as well as by paying cold, hard cash. Using GPS, advertisers can tell where they are and send them location-specific promotions to lure them into nearby stores.

“The long-term goal is to create a location-based local advertising platform,” said Booyah CEO Keith Lee. “That is the holy grail for advertising and marketing.”

Such location-based services—ranging from “check-in” games to social networking, map applications, and family tracking services—will generate more than $12.7 billion globally by 2014, Juniper Research estimated in report issued this week.

Some believe that’s overly optimistic. Juniper acknowledged past “false dawns” and cited privacy concerns as a potential roadblock, but said improvements in handsets, proliferating application stores, high-capacity networks, and the mobile Web have set the stage for an explosion of browser-based location services.

Competing with Booyah’s MyTown are two other, smaller check-in games, Foursquare and Gowalla, both of which have won big-name marketing deals and have high-profile investors, including Ron Conway’s SV Angel fund.

Those ventures build off a growing interest in using GPS as a platform.

There are the GPS-enabled Brightkite and Loopt social-networking applications. Yelp got headlines with an augmented-reality application that superimposes data onto the view through an iPhone camera, and the company recently enabled check-ins at businesses—although it is not making money directly on either feature.

Twitter in November gave users the option of having messages annotated with their locations and in December bought a company called GeoAPI, followed by an announcement that it would give developers geolocation data down to the neighborhood level.

And, of course, there is Google, which has been implementing numerous location-awareness features, and Facebook, which is widely expected to start enabling geolocation status announcements in the near future, although it has no GPS features at present.

Booyah, which has 19 employees, has received $4.5 million from Kleiner Perkins Caufield & Byers’ iFund, which finances companies making applications for Apple’s iPhone operating system. The team includes veterans of gaming studios Blizzard Entertainment, Activision, Electronic Arts, and Insomniac Games, as well as other technology sectors.

Between February 25 and March 11, H&M used MyTown in a campaign promoting denim products. People checking into MyTown got alerts if an H&M store was nearby, images of products on sale, and the chance to win game points. At the end, Booyah said it counted 750,000 check-ins and delivered 14 million product images.

“We had about 400,000 people check into H&M stores in the first week,” said Steve Lubomski, marketing director for H&M, which has roughly 200 U.S. stores and 1,700 globally, “which we thought was an incredible amount.”

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Patrick Hoge writes for the San Francisco Business Times.