The Gambling Commission was set up under the Gambling Act 2005 to regulate commercial gambling in Great Britain. On 1 October 2013 we also took over the responsibilities of the National Lottery Commission to regulate the National Lottery under the National Lottery Act 1993.
The past eleven years has of course seen many changes, with developments in technology transforming both gambling and sport. This transformation brings with it new challenges and opportunities for the betting industry and how it is regulated.
Advancing technology in particular has shone the regulatory spotlight on;
- ESports: although not new, in recent years their popularity has continued to grow strongly. It is difficult to define eSports but for the purposes of our discussion paper, see below, we use the term to describe the playing of computer games which can range from play by two individuals to playing in professional competitions.
- Virtual/ Digital currencies: have been a feature of remote gambling for some time, but only recently have we seen the use of ‘in-game’ items within video games, which can be won, traded, sold, as virtual currencies and converted into money or money’s worth.
- Social gaming: are the spectrum of games that people play over the internet, often via mobile phones, and which are built on social networks. This market continues to grow but we have previously addressed initial concerns with a paper titled ‘Social Gaming’ 1 in January 2015.
Together, these have presented a number of new issues for regulation and player protection of which there are four main areas we are focussing our attention;
- The blurring of the lines between social gaming and gambling.
- The potential for digital or virtual currencies to offer unregulated facilities for gambling, including betting services made available to minors.
- Concerns related to betting markets offered on eSports.
- Offering facilities for players to bet on themselves.
We recognise the need to explore how existing statutory definitions could apply to other elements of these relatively new innovations and how we can help businesses avoid providing unregulated gambling services. This was our starting point in our discussion paper, published in the summer of 20162 , which was also intended to promote a debate about other emerging issues related to regulation and player protection.
We raised a number of specific concerns in relation to eSports, most notably the risks to licensed operators offering bets on eSports markets. At present licensed betting operators in the British market only offer a limited range, this is increasing with in-play bets and more divisive products being provided. Although there are some unique risks, due to the digital nature, age of the audience and diversity of the market, in our view, the regulation of betting on eSports is no different from any other event upon which bets can be placed. Operators offering this market are still expected to manage any associated risks as they would normally, such as cheating, match fixing and problem gambling.
“The regulation of betting on eSports is no different from any other event upon which bets can be placed. Operators offering this market are still expected to manage any associated risks as they would normally, such as cheating, match fixing and problem gambling.”
The emergence of websites offering facilities for eSports players to play against each other to win money or prizes is also an area of concern. Given our definition of a betting intermediary, a person offering facilities for match ups could be providing a gambling service and would need to be licensed appropriately. However we do recognise that drawing a clear distinction between arrangements that would in our view amount to acting as a betting intermediary, and those that involve payment to participant in genuine competitive tournaments, is not easy.
Finally, we are also looking into whether the playing of eSports games might be considered gambling in itself, if played for a prize. This is relevant as many eSports games contain elements of chance, such as Random Number Generators. Even if the eventual outcome is largely determined by skill, many eSports appear to fall within the definitions of gaming.
By ensuring that we a have a full understanding of the developments in these emerging markets, we can continue to adopt a model of effective and proportionate regulation to manage the associated risks. The consultation to the discussion paper closed on 30 September, and undoubtedly, how we proceed with the feedback will be of interest for a wide range of stakeholders. We intend to provide a formal position at the beginning of 2017.