Video game firms face prosecution over gambling by children

Video game developers could be prosecuted if they fail to prevent children gambling using items featured in popular games such as Call of Duty and Counter-Strike, MPs have been told.

In an evidence session with the digital, media, culture and sport select committee, which is examining links between gaming and gambling, the UK’s betting regulator said it had “significant concerns” about products such as skins and loot boxes. Skins are in-game items that can be won in the game, such as weapons, outfits or particular football players, while loot boxes invite players to pay a certain amount for a mystery reward.

Such products are not defined as gambling under English law, due to the fact that the in-game items cannot be exchanged for cash within the game, despite the fact they can be bought and traded with real money on other sites and acquiring them may involve an element of chance akin to placing a bet.

The Gambling Commission’s programme director, Brad Enright, said it was “constrained by the current legislation”, although it was prepared to regulate such products if the law were changed.

But Enright said action could be taken against video games firms who were not doing enough to prevent players selling the items for cash, or gamble with them, on websites set up by third parties.

“The popular game Counter-Strike: Global Offensive is the game we’ve seen the most inquiries about,” Enright told MPs. “We’ve had dialogue with Valve Corporation [which publishes the game]. Where we draw their attention to particular games where British consumers including children are gambling on those sites, they have closed them down.

“We’ve said that’s not a sustainable approach. They’ve created this situation … and there’s an onus and responsibility on them to address the byproduct of how they’re operating.”

He said games companies could take action by having such sites shut down for breach of copyright but firms such as Valve were waiting for the regulator to flag such instances, rather than acting of their own volition. “Ultimately we have criminal powers to prosecute for providing the facility of gambling without a licence,” he said.

Enright and Neil McArthur, the Gambling Commission’s chief executive, said they were less concerned by games developer EA, which they said was working harder to prevent players exchanging loot boxes available in the Fifa football games for cash.

Committee member Ian Lucas questioned the extent to which games developers had any incentive to prevent their products being used to gamble.

He said: “If businesses like EA don’t want to encourage gambling, why do they continue to use loot boxes? It seems to me that, bearing in mind children are using these games, that it’s creating an understanding of a process very close to gambling and that concerns me. It seems to me is that it makes money for EA.”

McArthur said he was even more concerned about so-called social casino games, gambling-style products that mimic casino and slots games that can be played by children but do not offer the opportunity to win money. Such games require age verification if they are on a gambling company’s website, but the Gambling Commission does not regulate those found on social media such as Facebook.