A licensed skin betting operator is close to launch
Esports Betting Report

Betting With In-Game Items A New Danger For Children, UK Gambling Commission Survey Says

In-game betting children

The founder of esports betting operator Luckbox said the UK Gambling Commission’s report finding issued that 11 percent of children surveyed had gambled with in-game items proved that action needed to be taken to prevent illegal activity in esports.  

Lars Lien, the chief executive of the esports betting platform, said that there was “simply not enough understanding” among operators, marketing partners, service providers and game publishers that in offering skin betting they were actually breaking the law.

The commission has previously made it clear that it considers gambling with in-game items that have a real-world value is a licensable activity.

This was the first time the survey posed questions with regard to skin betting.

What we learned about kids and in-game item wagering

The survey also found that 45 percent of those surveyed were aware of the concept of skin betting. In terms of actual betting activity, the survey found an overwhelming skew towards boys betting in-game items, compared to just three percent of girls.

It also found that in-game betting activity was more common among the older cohorts, with 14 percent of 14-16-year-olds taking part in the activity. Incidence was also higher among those who had spent their own money on gambling in the past week (at 24 percent) and among those who had played online gambling games (30 percent).

Of the total 11 percent, more than a third had done so within the past seven days, 23 percent within one month and 41 percent more than a month ago.

Tim Miller, executive director at the UKGC, said it was clear that many children’s experiences of gambling-style activities are coming from the playground, game consoles or social media rather than the traditional sites of the bookmakers, the casino or the gambling website.

“That’s why it is essential that we work across industries and with parents so that together we can protect children and encourage those that choose to gamble in adulthood to do so safely.”

Regulators are catching up?

Luckbox’s Lien said the report suggested that gaming authorities are “finally catching up with what’s happening.” He added that it was “refreshing to see the regulators communicating their strong stance on these matters.”

“Many illegal sites have already been closed down and it is only a matter of time before the authorities are caught up with,” he said. “Being properly regulated and a responsible operator is the only way to become a successful and sustainable business in what is obviously a booming sector.”

Lien warned that skin betting had “opened the door” that unregulated operators could exploit.

“This has opened the door for lots of unregulated providers popping up to feed what is essentially a black market.”

He suggested that players of any age were not safe on such sites. “Skins betting is not the problem — illegal operators are.”

A licensed skin betting site

Lien said Luckbox – which is yet to launch – will accept skins for deposits and withdrawals. He said that the site will be fully licensed.

He confirmed in an email to Esports Betting Report the company will be licensed initially in the Isle of Man and that it will also apply elsewhere, including in the UK which Lien praised for taking a “strong stance” against the potential for illegal activity.

“We are working with multiple regulators in offering our thoughts on the future of the market, and we have had great mutual benefit from working with the Isle of Man Gaming Commission along the way,” Lien added.

“Skin betting was not possible when we initiated our project, but once the Isle of Man’s Gambling Supervision Commission understood what it was, they have been very receptive to our requests.

“In fact, some months after we discussed the implications and licensing regulations with them, it certainly appeared our feedback made a huge impact on how they now formally view this activity.”

More action on in-game items?

The news of the propensity for young people to bet with in-game items is sure to increase pressure in the UK parliament for the government to take action. Within the past fortnight, the gambling minister Tracey Crouch has said that the issue of loot boxes in video games remains under review.

In the wake of the parliamentary questions, the UKGC issued a warning that it believed that when it came to loot boxes and other issues related to in-game items, there was a danger of lines becoming increasingly blurred.

Meanwhile, both Belgian and Netherlands gambling watchdogs have raised concerns in recent weeks regarding whether loot boxes are a gambling product that needs oversight. The issue is also under consideration in US jurisdictions.

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