Global: Social gaming – where next for the regulatory debate?

The debate around the regulation of social gaming trundles on.

A few months ago, it seemed that the focus had become sharper following the previous sense of hysteria that emerged after the mainstream finally woke up to what was happening. Over the Summer of 2012, we all read various statements made by politicians, regulators and the media that called for changes to laws or claimed that existing laws were already wide enough to cover the phenomenon that was “casino-style social gaming” (or whatever moniker you wished to use for games played with cards, dice or reels that did not involve a cash-out).

Yet with the arrival of 2013, so came a flavour of commentary that was, in my view, more sophisticated. The discussion began to centre far more around the way social games could be used to fertilise real-money offerings and the impact of them on the long-term behaviour of participants, notably children. It did seem the paranoia that all forms of digital entertainment would be regulated had somewhat subsided. Of course if you ask a well-informed lawyer, they will tell you that various combinations of existing consumer, e-commerce, advertising and gambling laws already provide all the protection needed. Whether such laws were being observed or not was another matter. The Chairman of the UK Gambling Commission said as much in January stating “we certainly do not wish to regulate where we don’t have to. If……risks to the public are being properly managed and mitigated, either by responsible providers and users or by [regulatory] existing mechanisms, then there will be no need for us to act.”

The odd conspiracy theorist out there may feel that gambling regulators will do all they can to bring social gaming into their remit. I do not subscribe to this theory in general (although there may be exceptions). Perhaps one of the most useful descriptions of the issues at hand were expressed in the Australian Government’s review of its interactive gambling regulatory environment where a dis-passionate and measured assessment was laid out. For anyone involved in the interactive gambling market, the published report is a must-read for many reasons.

A further important point was made by the UK Gambling Commission when it suggested it was the development community’s “interests to self-regulate if they want their business model to be sustainable.” This suggests there may be some form of voluntary code to assist the industry in demonstrating their willingness to adopt basic social responsibility in the way they go about their businesses. This is an easy thing to agree with, but the industry is cautious of going down this road without proper evidence as this then suggests there is something that needs fixing. The first task of the new trade bodies (such as the International Social Gaming Coalition) must be to undertake research and on the back of that, to educate.

Yet, gambling regulation is only one part of the puzzle, as mentioned above. There are a myriad of existing laws that apply but that, so some say, are being ignored. Much of this centres on, understandably, the way games interact with children and this is much broader than “casino-style” games. The Japanese Consumer Affairs Agency pulled the plug on the traditional gacha model last year and the UK’s Office of Fair Trading is taking a close look at the way the “freemium model” works. We won’t know the results of that until October at the earliest.

What the intervention of consumer bodies does is illustrate that, despite the developers asking the regulators to leave them well alone, this will not happen unless those regulators are convinced there is nothing for them to worry about. Clearly more evidence is needed, hence the OFT’s consultation. For interested parties, they must get involved and not wait to be asked.

So where is all this going?

A pathway seems to have emerged and the early-2013 statements by the UK and Australian authorities helped focus things, but we wait to see what impact, if any, the OFT’s intervention in freemium gaming has. A number of regulators are on serious catch-up with the social gaming sector, particularly in jurisdictions where interactive gambling is either nascent or still prohibited, as such regulators may have a view of emerging technology and associated business models that are superficial at best when compared with the entrepreneurs they seek to over-see. Much of the “education” required is to needed to bridge that gap. Only then can the debate properly progress and ultimately conclude.


Stephen Ketteley moderated a panel entitled “Regulating social gaming – a likely scenario” at this year’s GIGSE in San Francisco. He will moderate a panel at the International Association of Gaming Regulator’s conference in Oslo in October on the same subject.