Category Archives: Gambling

Lawmakers push for new online gaming regulations to protect children

One non-department public body in the UK is pushing for stricter rules surrounding video games and their relation to gambling. According to the Children’s Commissioner for England, tighter laws will protect children from spending too much money through online games, with an emphasis on loot boxes.

In a report titled Gaming the System, researchers delved into how games can affect young people. Importantly, the report directly highlighted the benefits of online gaming, whether that’s services like NetBet best casino online or actual video games. Specifically, the report points to the social benefits of online gaming.

However, there are also some concerns about how people, especially children, are spending money when gaming online. Other potential issues raised by the report include how much time kids spend gaming and potential for peer-pressure to play a role in decision making.

For the study, researchers interviewed children aged between 10 and 16, with many admitting to understanding some negative aspects of gaming. One 16-year-old gamer who mostly plays FIFA recognised so-called loot boxes are similar to gambling.

A loot box is a gaming term for a consumable virtual item that can be redeemed with in-game currency for items. Typically, these items are unavailable through any other means and loot boxes require real money to access. According to the gamer, loot boxes resemble gambling because “you could lose your money and not get anyone good or get someone really good.”

Fortnite is a game that relies heavily on a mechanism similar to loot boxes to monetize itself. The game is completely free to use for the popular battlegrounds mode and developer Epic Games makes money through selling items. These items include skins, which have become a status symbol within the game.

One 10-year-old in the study said she was concerned other gamers would see her as “trash” for only having the default skin. Anne Longfield, the children’s commissioner, said this way of monetising a game is dangerous for children. She likened the system to direct “exploitation” by pressuring children into feeling obliged to spend money.

“With 93 per cent of children in the UK playing video games, it is vital that the enjoyment they get comes with tighter rules that protect them from straying into gambling,” she said.

“Children have told us they worry they are gambling when they buy loot boxes, and it’s clear some children are spending hundreds of pounds chasing their losses. I want the Government to classify loot boxes in games like FIFA as a form of gambling. A maximum daily spend limit for children would also be reassuring for parents and children themselves.”

One proposal for changes to the laws would be for every game to come with a report feature that would detail and track what players have spent.

Furthermore, the commissioner suggests online games should fall under “a legally enforceable age-rating system, just as physical games are,” and have explicit warnings that in-game spending is involved in the package.

Another suggestion is the creation of “digital citizenship” programs in school to educate children on the pitfalls of online gaming. UKIE, the country’s industry trade body said it recognises the need for education around online gaming, which is why it already runs in-school workshops.

“The report shows how important online play is to [children’s] lives and how games bring children together, spark creativity and equip them with vital skills for a digital age,” said Dr. Jo Twist OBE, CEO of UKIE. “We recognise the need to educate players, parents and carers about safe and sensible play habits and for the industry to take an appropriate role in doing so.”

Image credit: pixabay.com

 

Gambling regulations in the UK and Sweden

The gambling industry generated a gross yield of 115 billion dollar back in 2016 – this figure has steadily increased, urging many national governments to take a closer look at operations within this industry. Many national governments today still own or operate a variety of gambling operations. In the European Union, legislations and laws vary from country to country with no blanket law being applied at EU-level. The only requirement is that countries conform to Treaty on the Functioning of the European Union (TFEU). Hence, gambling is legal across member states although operators are often subject to gambling laws stipulated and enforced by national governments. Many countries, including the UK, have of recent re-evaluated their gambling laws and policies in an attempt to regulate taxation within the sector and foment responsible gambling amongst players.

Why regulate the market?

Having regulated online casino operators has several benefits. Players can play safely, knowing that they are using software and probability applications which are according to pre-set standards. Online casinos are duty-bound to be transparent and implement several processes to ensure players adhere to their rules. In this way, for example, the number of underage players at online casinos has significantly decreased (although the UK gambling commission still reports gambling amongst underage individuals).

Gambling laws in certain jurisdictions have also led to an uneven playing field between the State and a private operator. Restrictions also apply for residents of one country to play in an online casino that has its servers located in another. This is one of the reasons why European operators have so much trouble accessing the North American market.

Gambling laws in the UK

In the UK, gambling is regulated by the UK Gambling Commission of which functions where set up under Gambling Act 2005. This executive body is responsible for regulating arcades, betting, bingo, casinos and slot machines. This commission and recent changes to gambling laws brought the UK into the reality of modern gambling, with specific attention given to online casinos.

The Act’s three main objectives that fall with the remit of commercial gambling are:

  1. The prevention of gambling as an illicit activity used to facilitate and support criminal activity or encourage disorder
  2. Verifying that gambling is carried out in a fair manner
  3. Safeguarding minors and vulnerable persons from any suffering or exploitation which could arise from gambling

So who needs a license?

Providers of commercial and remote gambling services (such as online gambling) are required to have a licence if operating within or offering their services to individuals residing in Great Britain. There are exemptions for premises holding an alcohol license where certain games (eg. Poker) may be exempt from regulation but are still required to follow a code of practice which stipulates limitations with regards to the stakes and prizes.

Private gaming (defined as gambling within a place to which the public do not have access) is permitted by the commission. It is subdivided into domestic gaming and residential gaming. There are still complex legal guidelines which define where gambling activities can take place and any arrangements made; the commission recommends seeking legal advice before organising events which involve gambling.

Further UK legal resources for licensing and gaming.

What about players?

Whilst players who gamble online do not need a licence they must be over the legal age of 18. Online casinos, however, require a licence issued by the Gambling Commission in order to accept players residing in the UK.

There are some jurisdictions which have a special licensing exemption, such as countries in the European Economic Area, the EEA. Other countries which have such an exemption include some countries within the Commonwealth such as Antigua, Barbuda and the United Republic of Tanzania.

Gambling laws in Sweden

The Swedes have a long history of gambling, dating back to the Vikings. In fact, legend has it that in the 11th century, the Swedes settles a land dispute with Norway over a game of dice. In Sweden, the Swedish Gambling Authority is known as Lotteriinspektionen. This authority is tasked with “ensuring the safety, legality and reliability of the country’s gambling industry”[ https://www.lotteriinspektionen.se/en/].

Today Swedish gamblers only had access to four land-based casinos which belong to a single state owner operator known as SvenskaSpel. The national government created a monopoly to reduce illegal gambling and protect the customer. Private operators found a lot of obstacles to operating in the country and competing fairly with the state-owned, Svenska Spel. This spurred a mushrooming of online gambling companies offering online services to individuals living in Sweden but based in jurisdictions such as Malta and Gibraltar which facilitate setting up such businesses as well as significant corporate tax benefits.

Sweden’s new gambling law

In 2018, Sweden voted in a new gambling regulation which will come into effect on the 1st January 2019. The law was passed following pressure from several Swedish gambling operators and the EU, which saw Sweden’s monopolistic attitude went against the block’s philosophy of free trade.

Under the new law all online operators offering their services to people in Sweden will require a Swedish licence. find a full list of FAQs about laws and regulations for Swedish players.

In several ways, Sweden’s new gambling law is analogous to that of the UK. Online gambling will be open to players over the age of 18, whereas land-based casinos will only be accessible to over 21s. Players will be given easier options to bar themselves from gambling sites and promotional material. The law focuses primarily on improving game security, enhancing player protection and opening the country to more liberal competition practices.

Summing up the main points

  • Commercial Companies will be subject to 18% tax
  • Not-for-profit organisations are exempt from tax
  • License prices will vary from 400 000 – 700 000 SEK
  • Age limit of 18+ for online gambling and 21+ to enter a physical casino

The biggest challenge which this law will bring is the restriction of bonuses to just one welcome bonus. This means that operators will not be able to provide weekly bonuses, loyalty rewards and the host of bonuses and promotional offers they currently do. When the new law comes into force all players will be considered new, so operators will have the possibility to entice them with one last bonus. However, beyond the welcome package, operators will need to find new ways to keep players loyal and not lose them after the bonus.

With this new law six different licences will be available, based on the type of operation, such as a non-profit or a cruise ship. Licences also vary in cost and purpose, with some licences available to online casinos and others open to game creators.

References

Gambling Commission: Licensing, compliance and enforcement under the Gambling Act 2005: policy statement (PDF) [Accessed 4 Dec 2018]

GOV.UK: Gambling Commission [Accessed 4 Dec 2018]

Wikipedia: Gambling Commission [Accessed 4 Dec. 2018]

Statista: Casino industry – Statistics & Facts [Accessed 4 Dec 2018]

Lotteri Inspektionen (Swedish Gambling Authority) [Accessed 4 Dec 2018]

Gambling Commission: How we regulate the gambling industry [Accessed 4 Dec 2018]

European Commission: Online gambling in the EU – Growth [Accessed 4 Dec 2018]

Wikipedia: Svenska Spel [Accessed 4 Dec 2018]

European Casino Association: Sweden [Accessed 4 Dec 2018]

Gambling Commission: Young People and Gambling [Accessed 4 Dec 2018]