Skin betting attracting several gambling authorities attention

The practice of wagering virtual in-game items (skin betting) from popular games such as CS:GO and FIFA is legally defined as gambling, the Norwegian Gambling Authority has noted in a public communication, warning operators will face tough sanctions if they offer these services.

“Skins can normally not be exchanged for cash, but it is possible to take the skins out of the game for buying and selling. There are separate online casinos where you can bet and win skins, and in such cases, skins become a virtual currency that can be used for gambling. We have seen several examples of Norwegian children and young people who have spent thousands of money on this,” the NGA said.

Our readers will recall the two YouTubers who were recently slapped with hefty fines by a UK court after the UK Gambling Commission (UKGC) deemed their services to be illegal (see previous report).

This week, the UK Gambling Commission published a similar view on skin betting urging parents to monitor their children’s activity on games that on the surface are seemingly unrelated to any form of gambling.

The warning follows the publication of a Commission paper on virtual currencies, eSports and social gaming.

There has been an increase in the popularity of unregulated third-party websites offering gamers the opportunity to gamble on the outcome of video game tournaments with in-game items such as decorative digital guns and knives (skins), the commission warns, citing a US report that estimates the global skins gambling market as being worth between $3.9 billion and $5.1 billion in 2016.

Gambling Commission chief executive officer, Sarah Harrison, said: “Mums and dads could be giving money to a child thinking that they are playing a computer game when in fact they are gambling and this is real worry.

“Gambling on eSports with in-game-items is growing and we need to make sure all gambling is fair, safe, crime-free and protects the young and vulnerable.”

Tracey Crouch, Parliamentary Under-Secretary for the Department for Culture, Media and Sport, backs the Commission’s warning, saying: “eSports is a phenomenon that gets bigger every day and is enjoyed by millions, but it is a concern that there are unlicensed websites jumping on the back of popular video games and encouraging children to gamble”.

“These unlicensed websites are a hidden form of gambling – they’re parasites feeding off popular video games, presenting a clear and present danger to players including kids. Our prosecution last month demonstrates that we won’t hesitate to take action,” Harrison concluded.

The NGA concurs: “A gaming site that allows betting and pays out prizes in skins is in our view an online casino, and in Norway, only Norsk Tipping is allowed to offer online casino.”

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