UK Gambling Commission report on eSports
UK Gambling Commission CEO Sarah Harrison.

The UK Gambling Commission wants parents to be aware of the dangers of eSports skin betting.

A Commission paper released this week has revealed the growing number of unregulated third-party websites which allow gamers to wager on video game tournaments using in-game items, such as digital guns and knives. These are known as skins.

The Commission’s CEO, Sarah Harrison, commented on the findings, stating it is worrying parents could be giving money to their child to play a computer game when in fact they are gambling.

She noted the rise of gambling sites using skins as a betting currency.

“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,” Harrison said.

Undersecretary for the Department of Media, Culture and Sport, Tracy Crouch, supported the Commission’s findings.

“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,” she said.

“The Gambling Commission has shown that it will take action and prosecute but it is important that parents are vigilant too and know about this risk to their children.”

Crouch is referring to the case the Commission took against a pair of eSports gambling site promoters. The pair pleaded guilty last month, paying £265,000 in fines and court costs.

The Commission has also been proactive in terms of regulation, requiring any site which provides betting on eSport matches to have UK Gambling Commission licence. Licences are also required if a site allows virtual goods to act as a “de facto virtual currency.”

The eSports Position Paper

The position paper focuses predominantly on gambling in eSports. When it comes to social gaming the Commission’s stance is there is no “persuasive case to pursue further regulatory
intervention at this stage.”

It maintains the view gambling sites which offer virtual currencies must have a UK Gambling Commission license, since it’s just another form of money.

The paper says since interpreting legislation is up to the courts, it “seeks to balance an interpretation of the legal framework” to assess “where interactive entertainment has crossed or is in danger of crossing boundaries into licensable gambling activities.”

The Commission said it will penalise any unlicensed gambling facilities which present “a risk of harm to children is and will remain a significant aggravating factor.”

It noted while a “zero-tolerance approach” will be taken when it comes to unlicensed gambling operators, the Commission “will also liaise with games publishers and/or network operators who may unintentionally be enabling the criminal activity.”

When it comes to skin betting the Commission said it has been proactive in engaging with global regulators to ensure consumers, particularly children, are protected.

It also added skin-betting is “a by-product of the manner in which games have been developed and in-game economies incorporated for commercial benefit.”

Despite the Commission revealing it was unable to find any evidence “of any direct commercial benefit to games publishers from the illegal gambling facilities” it says they indirectly benefit since “it is the games publishers who are the ultimate source of in-game items acting as a de-facto central bank.”

The paper addressed the concerns over the integrity of eSports events but found no evidence to support the trepidation.

But the Commission said it “will continue to work with those committed to raising awareness and addressing integrity risks within eSports including exploring memorandums of understanding where appropriate.”

eSports statistics

The paper also revealed only 8.5 percent of adults surveyed via its gambling participation surveys had wagered on eSports in the last year. Of the small group of eSports punters, 58 percent of eSports gamblers were male, while 42 per cent were female, but women were found more likely to bet using in-game items.

When it comes to betting currency, 90 percent bet using in-gaming items, 88 per cent used real money, and 78 percent used both.

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