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Strong Evidence that Gamers Re-spawn into Gamblers

by Dame de Coeur - May 16, 2017

The United Kingdom Gambling Commission (UKGC) was founded to implement the items outlined in the Gambling Act 2005 and since its inception it has had to grow and change to keep up with the challenges associated with spiralling technological developments. Has this been problematic? Yes. Are they fully in control of the situation yet? No. Will this issue be eradicated soon? Unlikely.
Now more than ever before in the history of gambling, UK citizens have unlimited access to gambling portals, making it entirely possible for them to gamble faster and therefore lose faster. The Gambling Commission have identified a growing trend in the links between: Esports, Virtual Currencies and Social Gaming and gambling which has the potential to become problematic. Whilst it may be a comfort to some parents to know that their child is safely installed in their bedroom upstairs playing games online – what may be less comfortable to note is the fact that recent studies have shown a strong link between gaming and gambling. It is the work of a moment for unregulated gambling companies to drive a 12 year old gamer to become a fully-fledged gambler.

In response to such virtual threats, the Esports Integrity Coalition (ESIC) was formed, appointing its first ever Esports Integrity Commissioner in July 2016 in the form of Ian Smith, who said in his inaugural statement, “There are many challenges ahead, but it is to esports’ credit that the industry is taking these steps in anticipation of a foreseeable problem, rather than in reaction to a crisis, which is the route taken by most traditional sports to date.” Perhaps it is with a heavy heart that the ESIC must surely acknowledge the “foreseeable problems” cited by Mr Smith are now the very problems looming large over the industry today, just short of 1 year later.

Nik Tofiluk, Executive Director of the UK Gambling Commission, recently identified several key factors giving rise to concerns that the line between gamer and gambler (minor or otherwise) is becoming increasingly difficult to distinguish. In an interview for the European Gaming and Betting Association (EGBA) last December he stated, “It is difficult to define eSports but for the purposes of our discussion paper, we use the term to describe the playing of computer games which can range from play by two individuals to playing in professional competitions.” Of the four key concerns he highlighted as in need of immediate scrutiny, one in particular stands out, “The potential for digital or virtual currencies to offer unregulated facilities for gambling, including betting services made available to minors.” In a world where even adults are vulnerable to the siren calls of gambling operators it is of vital importance that we steer our youngsters away from the ruinous rocks of the industry until they are old enough to map a safe course through themselves. This is perhaps easier said than done though.

To uncover the solution to a problem it is, first of all, imperative that we understand the problem itself. The problem faced by the Gambling Commission – and hundreds of thousands of unwitting parents worldwide – is that video games are only becoming more popular. With their growing popularity they become more vulnerable to the seedier and greedier elements of the gambling underworld who wish to exploit them and the naïve teens – and sometimes even pre-teens – that play them – for their own financial gain. Absorbed in discovering their virtual worlds, taxed with neutralising threats and solving complex problems, our children are completely innocent of the fact that deeper and darker forces are working against them outside of their game. For every player, striving to complete a game through ceaseless hours of interaction with their monitor, you can be sure that there is an unlicensed casino employee, crouching predatorily in cyber space, just waiting to convert them from gamer to gambler.

If you are considering how this can possibly be the case, allow me to illustrate for you. Savvy games creators saw a way of maximising profit by introducing what are known as “in game purchases” to free play games in order to snare players. They allowed customers to play a basic form of the game but also programmed in the facility to allow players to enhance or develop their characters, weapons or experiences through the purchasing of certain items that would make this possible. Items such as knives or guns could be transformed and customised using ‘skins ‘which could be purchased and then, in many cases, resold illicitly on black market sites for inordinately high prices.

Software producer Valve run a marketplace called Steam to facilitate such transactions between gamers legitimately but ultimately, over time, other sites have popped up to allow players to circumvent fiscal restrictions imposed by regulated sites such as Steam. These sites, alongside virtual currencies, were the catalysts allowing the world of gaming to bond firmly to the world of gambling. Unfortunately the reaction precipitated a dangerous residue: underage gambling. Players of any age could suddenly transform their skins into a virtual currency and use this to make bets on competitive esports matches and tournaments.

Unregulated companies such as CSGO Lounge accept bets without checking the credentials of the players making the bets. Players of any age, residing in any geographical location, are welcome to bet as much (or as little) as they want, despite the fact that many are not in compliance with the gambling restrictions set out by their respective government bodies. Some underage players are incurring losses running into thousands of pounds. Many admit that once the taste for gambling has touched their palette their hunger for actual gaming diminishes – their appetite can only then be sated by taking more risks and placing more bets on the gaming carried out by others. As with all addictions, tolerance grows and greater risks are required to achieve the same high. What we are left with is a generation of underage gamblers with hours of gambling experience but none of the maturity to decide whether taking part in such an activity is really in their best interest. Whilst CSGO Lounge do pay lip-service to the need for players to obey gambling laws in their home jurisdictions they do not use geotargeting tools or other methods of restricting players as regulated sites would.

So why are the courts not moving against such operators? Simple. The legal system’s complete inexperience in dealing with this particular subculture of gambling.

In the United Kingdom we are fortunate enough to have the Gambling Commission to cast a parental eye over the population and to at least try and give a system of rules and regulations that afford some protection. Other jurisdictions are not as fortunate. We are currently witnessing shifts in UK gambling legislation that bring with them enormous benefits for the population. In February of this year the Gambling Commission successfully brought charges against FutGalaxy.com for committing offences under the Gambling Act 2005. The company were found to have cynically facilitated unlicensed gambling – with many of those taking part being minors – some as young as 12 – through their YouTube channel. FutGalaxy.com fostered the belief in its customers that it was in some way affiliated with FIFA, using the name of this organisation, which offers a well-known series of footballing egames, to appear reputable to those inexperienced enough not to do their research.

Children were categorically told that because they were using a virtual currency this negated the need for them to be 18 to place bets – blatantly untrue. How many of our children fell victim to this organisation? We cannot be sure, but in his summing up the presiding judge, DJ McGarva stated that the level of activity was “horrific” and the situation overall was “very grave”. The two co-defendants, Dylan Rigby and Craig Douglas, were fined £174,000 and £91,000 respectively for their unlawful acts; testament to how seriously the British justice system is taking the illegal activities of unlicensed gambling operators.

Sadly, despite the best efforts of the Gambling Commission and the British courts, the barrage of unregulated operators assaulting the gaming and gambling sectors, looks likely to remain unassuaged for the foreseeable future. Rigby and Douglas are UK citizens meaning that bringing charges against them was relatively easy – many, indeed most, unlicensed operators exist beyond the borders of our small territory; just out of reach of the long arm of the law.