Social gaming and gambling advertising, how to deal with them?

Social gaming can be a relevant source of revenues after the Italian gambling advertising ban, but there are regulatory restrictions that need to be considered.Giulio Coraggio

I had discussed in the past about social gaming platforms and the applicable regime, but since it is becoming (again) a hot topic, especially after the Italian gambling advertising ban, below are the most relevant questions that I have been responding during these days:

1. What license is needed for a social gaming platform?

No license is necessary in most of countries, including Italy, since social gaming is not gambling. However, as covered in this blog post, there is a “thin” line between social gaming and gambling and it is necessary to ensure that it is not crossed.

2. Is it totally unregulated?

No, social gaming still needs to comply with stringent consumer and eCommerce regulations that will considerably increase with the new package of EU legislation named the “New Deal for Consumers” that will provide higher fines and collective consumers’ actions.

3. Has it to be totally free?

No, social gaming can provide for a payment by players. But, such payment needs to be for the service received e.g. the license on the gaming software. The proper drafting of Ts&Cs of a platform is crucial for its proper qualification.

4. Can players win anything?

As provided by DLA Piper free summary of Prize promotions laws of the World, the scenario is quite different on the matter depending on the relevant country. Players cannot get their winnings out of the game, but in some countries can win for instance prizes in kind. Italian laws on prize promotions are quite complex and their breach can lead to major fines.

5. Are social gaming platforms subject to the Italian gambling advertising ban?

No, since social gaming is not gambling because it does not provide prizes in cash. However, the platform shall be properly arranged in order to avoid that this is considered as an “indirect” advertising of a gambling platform, which is a practice also prohibited under the new Italian laws on gambling advertising.

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