UKGC: ESPORTS GAMES PUBLISHERS NEED TO DO MORE ON SKIN BETTING, INTEGRITY

Florida Senate Advances NewFantasy Sports Bill, But IsRevived Effort What It Seems?

Cowboy Up: Texas Daily FantasySports Bill Expected To GetPush From Romo

Florida Gambling Bill Dies,Likely Scuttling Chances OfFantasy Sports Legalization

Home / Regulation / UK Commission Targets The Threat Of Illegal Skin Betting In Esports In New Report

UK Commission Targets The Threat Of Illegal SkinBetting In Esports In New ReportScott Longley, March 20, 2017 23:00 PDT @A_Shot_Rang_Out

Contents [show]

The UK Gambling Commission called on esports games publishers torecognize the “legal, moral and commercial imperatives” to tackle the threat ofexploitation by third parties offering illegal skin gambling to consumers.

The gambling watchdog — in a paper largely about esports — added that publishers should act toprevent such activity. The commission also said they should work with relevant authorities.

What the UKGC said about esportsIn the report, the UKGC said it is worried about the “parasitic” nature of many sites that offer skingambling. CEO Sarah Harrison said unlicensed sites were a “hidden form ofgambling.”  They are a “clear and present danger” to players, including underage participants,she opined.

She also talked about the prosecution in February of FutGalaxy. That situation demonstrated thatthe commission wouldn’t hesitate to take action should it deem that illegal gambling activityinvolving a UK-domiciled player was taking place.

The minster responsible for gambling, Tracey Crouch, said the government was concerned about“websites [without licenses] jumping on the back of popular video games and encouraging childrento gamble.”

The new position paper builds on the responses the commission received previously in its previousdiscussion paper on esports, virtual currencies and social casino published last year.

Data on esports bettingThe commission points out data about the participation rate among gamblers. The percentage thathave ever bet on esports is surprisingly high at 8.5 percent. It cautions that the figure for recentesports betting falls to 3.5 percent.

In an explanatory note, it also adds that the figure for participation will likely be skewed towardsthose who are more engaged online and therefore more likely to have bet on esports. The

By Dustin Gouker

Legislative Tracker: DailyFantasy Sports, Sports Betting

DFS AND SPORTS BETTING BILL TRACKER

LATEST INDUSTRY NEWS

DFS: STATE ELIGIBILITY TRACKER

Custom Search

INDUSTRY LEGAL REGULATION VIEWS DAILY FANTASY SPORTS SPORTS BETTING

DraftKings Promo Code 2017

Fanduel Promo Code 2017

commission adds that it is consulting with operators over changes to the reporting system. That willhelp it more clearly track future participation in esports betting.

David Clifton, partner at legal consultancy Clifton Davies, said the commission’s latest missive onthe related issues of esports and virtual currencies “shouldn’t send out shockwaves.”

He said the paper “removed some doubt with regard to the commission’s approach.”

Integrity issues in esportsClifton added though that the esports sector – and the publishers in particular – should note that ithas “the chance to get its act together” with regard to integrity issues. “On integrity, the paper makesthe point that publishers are gaining from this, fundamentally because of the activities of the skins,”he said.

The commission makes it clear that though there is no evidence to date of esports events in the UKpresenting “serious” integrity risks. The same goes for wagers on esports events. But it warns thatorganizers and promoters “should avoid complacency” and explore additional controls.

“Equally the licensed betting industry should satisfy itself that competitions upon which markets areoffered are effectively managed to mitigate the risk of corruption with its attendant consequences fortheir consumers,” the document added.

Skin betting etc.The commission has particular concerns over the thorny issue of in-game items and virtualcurrency. Specifically, the position paper notes that the industry’s opinion that game networks have“occasionally” allowed users to exploit the open nature of the systems to buy and sell in-gameitems. Further, the industry is underestimating the scale of the problem.

“Based on open source research, the volume, variety and sophistication of websites advertisingopportunities to exchange in-game items for cash, indicates that to term such circumvention ofregulation as ‘occasional’ risks understating the extent of this issue,” the paper states.

The commission notes the “apparently indiscriminate provision and promotion” of thesewebsites. That could be especially harmful to underage players. “It creates a situation wherechildren are readily able to able to access activities commonly accepted as being appropriate onlyfor adults in tightly regulated environments,” the paper states.

In strongly worded terms, the paper states that the video game industry “should not be, or perceivedto be, passive to the exploitation of their player community by predatory third parties.”

More duties for esports publishersThe paper adds: “The significant risk of harm posed by these unregulated gambling websites, whilstunintended, is nonetheless a by-product of the manner in which games have been developed andin-game economies incorporated for commercial benefit.”

In such circumstances, the game publisher becomes the “de facto bank,” per the UKGC:

“Where a player loses their entire ‘skin’ inventory having staked themunsuccessfully on gambling activities, one option for them is to purchase new‘skins’ from the game publishers, either for use within the game or for furthergambling stakes.”

One gambling industry insider suggested the commission might be “overly specific” in this regard.He added that secondary markets such as those existing in esports “create a halo of activityoutside of the game which is positive for publisher.”

“It creates a user-generated content and community conversation which is gold-dust in terms ofretention,” he added. “If it helps players engage with the game, the publisher has no reason todiscourage such activity. It’s the wholly user-generated activity that is really sticky and attractive topublishers.”

SHARE TWEET

By Chris Grove

What Are The States WhereYou Can Play Daily FantasySports?

By Dustin Gouker

Legislative Tracker: DailyFantasy Sports, Sports Betting

By Dustin Gouker

DFS Partnership /Sponsorship Tracker

DFS BILL TRACKER

DFS PARTNERSHIP TRACKER

DFS SITE FACT SHEETS / REVIEWS

SHARE TWEET SHARE Bet on sports at Visit bet365

Two Important States ForDaily Fantasy Sports

Industry Have New Bills

← Previous StoryMarch Madness Creates

Buzz In Las Vegas, But It’s AMissed Opportunity For

Other US Casinos

Next Story →

New Report: EsportsAudience Could AlmostDouble To 600 Million By2020, With Big Growth ForEsports Betting

The Closure Of FanDuel’sAlphaDraft Might Be TheObituary For The FantasyEsports Industry

Las Vegas Casinos To GetCrash Course In Esports AtUpcoming Conference

Copyright © 2016 LegalSportsReport.com

RELATED ITEMS ESPORTS

CONTACT / ADVERTISING DISCLOSURES

Enter your email here SIGNUP

Sign Up For The Grove Report – US Online Gambling Industry Insights Delivered ToYour Inbox:

Scott Longley - Scott Longley has been a journalist since the early noughties coveringpersonal finance, sport and gambling. He has worked for a number of publicationsincluding Investor's Week, Bloomberg Money, Football First, eGaming Review andGambling Compliance. He now runs his own editorial consultancy Clear ConciseMedia and writes for a number of online and print titles.

Contact / Advertising Disclosures Paypal Betting Sites Australia Betting SitesUK Betting Sites NZ Betting Sites Esports Betting

YOU MAY ALSO LIKE...

SHARE TWEET SHARE Bet on sports at Visit bet365