LEGAL AND REGULATORY FOCUS
SGA to assist the UK Gambling Commission with its social gaming analysis…This month, the UK Gambling Commission released a report commissioned to provide an overview of what is currently known about social gaming. The report examines whether gambling style games pose any potential risks to the consumer and if so, whether there are adequate protections in place to mitigate such risks. The report focussed its study on those games that would be deemed gambling under existing legislation if the prizes won through such games were real-money rather than virtual currency. A full copy of the report can be found here.
The report broadly separated potential risks from gambling style games into two categories; (i) problem gambling risks posed by the exposure of minors to gambling style content or excessive gambling activity; and (ii) consumer exploitation risks posed by unscrupulous or incompetent operators. The report highlighted concerns that the potential for such risks to materialise were heightened by the increased accessibility of games through social media and the removal of the cost of entry.
A key point that was emphasised by the report was that very little directly relevant data or analysis currently exists as the industry has yet to receive appropriate academic or clinical research. The report therefore highlighted the need for further research rather than relying on data obtained from studies in relation to traditional gambling.
To address this, the Association has agreed to assist the UK Gambling Commission with the collation of industry data over the coming months as the Commission begins to consider the reports findings and formulate its future policy on social gaming. We firmly support the balanced and considered approach taken by the Commission in its attempts to understand the social gaming industry and its pro-active attempts to engage with the industry throughout. We welcome the opportunity to assist the Commission in seeking to address any consumer protection concerns raised in the report both through the provision of more detailed and targeted data and by the further promotion of the Association’s social responsibility initiatives within the industry.
Please get in touch for further details if you want to learn more about how you can support and participate in the data research exercise.
New law announced to regulate faulty apps…
It was announced by the British Government in the Queens Speech this month that it planned to bring in to force new laws to make it easier for consumers to claim compensation for digital content that doesn’t work. The Department for Business, Innovation and Skills estimated that more than 16 million people experienced at least one problem with digital content in 2012. The proposed new law intends to make it clear that consumers will be entitled to their money back and/or compensation if a game bought online is continually inaccessible, has repeated bugs or keeps freezing.
Games Network used to illegally mine Bitcoins…
It surfaced this month that more than $3,700 of the virtual currency Bitcoin had been illegally mined by a rogue employee at the US games network, ESEA (“E-Sports Entertainment Association”). The rogue employee was part of an internal testing programme to see whether or not Bitcoin mining was a feature ESEA wanted to include on its network. After ESEA ended the testing, the employee continued to use the testing accounts using customers’ hardware for his own personal gain and in doing so affected the computing power of many customers’ machines and in some cases caused actual physical damage. ESEA announced that it would offer all customers a free months subscription and donate over $6,000 to charity in an attempt to rebuild trust within its community.
This episode was followed by another security breach announced by Blizzard in relation to its game, Diablo III, which allowed users to generate infinite amounts of in-game gold currency with minimal effort through the exploitation of a coding error. Some unscrupolous users were able to profit from this by buying high priced items with their newly sourced virtual currency and selling them on to other unsuspecting users for real money.
Facebook announced in its 2013 Q1 results that it had recorded its highest ever revenues from social gaming payments, totalling $213m over the quarter. This was despite a 37 per cent drop in year on year payments from Facebook’s largest developer, Zynga. Facebook’s revenues were however dwarfed by Japanese social gaming firm, DeNA’s Q4 results which declared quarterly revenues of $528m, a 22 percent rise year on year. This was in stark contrast however to DeNA’s Japanese rival, Gree, which announced this month that it had closed down its loss making Chinese office.In a flurry of acquisition activity, Yahoo announced that it had acquired gaming platform start-up, PlayerScale and mobile gaming company, Loki Studios.A new multi-player gaming platform, “Skillz”, was launched in the United States this month, giving players the chance to win real money and virtual currency in mobile games of skill. Available in 36 US States (where wagering real money on skill based competitions is deemed to be legal), the platform currently includes 10 games from 10 different developers.
A new social shopping and gaming platform, “MallWeGo” was launched this month, providing visitors with an experience combining a Sims based approach to the Amazon concept of vendors. Available on web and mobile, the app includes a free to play casino feature where users can win coupons to redeem at retailers’ stores.
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