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Gambling Commission shines light on virtual currencies, eSports and social gaming

11 August 2016

The Gambling Commission has today launched a discussion paper setting out its latest thinking on virtual currencies, eSports and social gaming and seeking views on emerging issues that can pose a risk to both regulation and player protection.

The discussion paper has been prepared in response to:

  • the blurring of lines between some social gaming products and gambling
  • technological advances and the expansion of digital or virtual currencies resulting in some social gaming products offering facilities for gambling
  • the growth in the market for gambling on eSports

Neil McArthur, General Counsel at the Gambling Commission, explained: “Our key concern is to ensure that consumers are protected and that children and other vulnerable people are not harmed or exploited by gambling. This discussion paper brings to the fore some areas where we see real issues for regulation, player protection and the protection of children and young people.

“We are concerned about virtual currencies and ‘in-game’ items, which can be used to gamble. We are also concerned that not everyone understands that players do not need to stake or risk anything before offering facilities for gaming will need to be licensed. Any operator wishing to offer facilities for gambling, including gambling using virtual currencies, to consumers in Great Britain, must hold an operating licence.

“Any operator who is offering unlicensed gambling must stop – or face the consequences.

“We are also concerned about betting on eSports. Like any other market, we expect operators offering markets on eSports to manage the risks – including the significant risk that children and young people may try to bet on such events given the growing popularity of eSports with those who are too young to gamble.

“Finally, in terms of social gaming, the Commission’s view has not changed significantly since the publication of its social gaming paper (opens in new tab) in January 2015. “But”, cautions Mr McArthur, “if we discover that items such as additional spins, credits or tokens or even loyalty points are tradeable, then we will be taking a keen interest.”

Interested parties have until 30 September to respond. The Commission will also be looking for suitable opportunities during the Autumn for direct engagement prior to issuing a position paper towards the end of the year.

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