Regulators Call For Increased Social Gaming And E-sports Regulation

social-gamingPanel members at the Responsible Gambling Innovation Conference have concluded that young people are an ignored vulnerable gambling group and have made calls for increased regulation of social gaming. The meeting was held during the World Regulatory Briefing in London on Thursday. The panel had met to discuss different methods of targeting various risk groups within the gambling industry, with the primary focus being on young people and emerging niche gambling markets.

The Issue of Social Gaming: Is It Gambling?


Farmville was one of the earliest Facebook games to let players pay to unlock random items and progress faster in game

For the last few years, social gaming has been an uncomfortable grey area in terms of its status as gambling. Social gaming refers to online games which offer players the chance to spend money in order to unlock in game items, sometimes at random, with those items only being relevant to the game itself.

Multiple cases of small children making thousands of pounds worth of in app purchases on single games, have been cropping up in recent years. Although companies like Apple do often refund these charges to save face, it does bring into question how single social games are allowing children to spend so much money and have the need to do so in order to play them.

Due to the lack of a real currency payout, social games have managed to avoid being official defined as gambling, but in recent years, certain social games have blurred the lines to the point where that may be coming to an end.

Popular online games such as Valve’s hit multiplayer shooter, Counter Strike: Global Offensive (CSGO), offer players the ability to win random loot such as in game weapons and skins by purchasing keys to unlock them, using real money. Players are able to exchange these items between one another, with the game having built up its own economy over time, which denotes value to every item in the game. External casino sites such as CSGO Diamonds and CSGO Lotto, allow players to gamble their items in roulette style games. Players can even buy and sell each other’s items based on their economic value.csgo-teamfinder-skin-market

Many of these activities are done outside of Valve’s jurisdiction, with Valve simply allowing players to exchange items between players and taking a commission on any sales made. But the very fact that players have built both a market and gambling scene around the game still brings into question whether or not online games like CS:GO can be free of gambling regulation.

This is complicated further because Valve profits from item sales, many of which are won using the external casino sites, therefore making Valve profit off of unregulated gambling.  Even trickier still, the game is 18 rated, but is purchased off Valve’s own Steam online store, meaning that minors can simply lie about their age, purchase the game and then start gambling with its in game items.

Young People Are The Most Vulnerable Gamblers

young-gamblers-education-trustLee Willows, Founder and Chief Executive of the Young Gamblers Education Trust, was questioned about whether young people are finding their way to gambling alternatives such as the skin betting found in games like CS:GO. He responded saying: “We’re not a campaign organisation, but if we were to be a campaign organisation,  regulating social gaming would be absolutely critical. That’s the thing that teachers talk about. It’s not so much gambling – it’s social gaming.

Simo Dragicevic, CEO of data analytics firm BetBuddy, echoed a similar fear for young people’s safety: “In all the data we published, they are the ones who are at most risk. If you look at other research, they consistently come up. They’re just not as well matured and developed to make smart decisions. If they want to gamble, they will find a way to gamble. You shouldn’t have to encourage them.

Both members of thyoung-gamblerse panel felt very strongly, that the available data showed that social gaming is being used as a gambling substitute for young people and is putting them at risk of problem gambling behaviour.

Pedro Romero, Head of Gambling Therapy, had similar feelings to Dragicevic. He believes that young people are inevitably going to find a way to gamble regardless of the barriers in place. Rather than fight a losing battle, Romero argued that “with things like eSports and skin betting, I think the solution is not prohibition, it’s regulation. If you don’t regulate, people will go to unregulated markets.

Social Gaming: The Next Target of Regulation

Increased regulationregulations-ukgc has been a hot topic in the last year, with the UKGC making aggressive moves to licence all casinos operating within the UK and cutting down on money laundering and crime within the industry.

Given that social gaming is now looking to be the next big issue, it seems reasonable to assume it’ll be among one of the next areas that the UKGC and other regulators will focus on. The recent changes to regulation have been handled extremely well by the UKGC given the circumstances, but it’ll be interesting to see how the UKGC handle such a mammoth task of tackling the huge social gaming industry, especially since it’s gone unchecked for so many years.

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