How in-game features linked to gambling have young gamers in a choke hold

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Having read numerous articles that explore associated gaming habits with gambling, I wanted to explore what research is out there and the latest moves to protect children and young people.

There are lots of third-party marketplaces for crypto and other real-world currencies, with many also trading virtual items known as “skins”, which change players appearances in-game. There are also less obvious functions that many games offer such as “loot boxes”, which you can buy with in-game or real-world money, that contain randomised items that you can then use.

These seem to escape the attention of regulators and most parents, who only see their children playing a videogame and even if you grew up playing games yourself, it’s most definitely a new playground.

What does the research tell us?

A large study by the National Institute for Health and Care Research (NIHR) (funded by Gamble Aware and completed by the University of Plymouth and Wolverhampton University) found that “strong relationships exist between high loot box engagement and other potentially risky activities, such as problem video gaming and gambling-related thinking.” An earlier paper found that of the 93% of children in the UK who play video games, 40% have opened loot boxes. It also found evidence that under-18s who engaged with loot boxes progressed onto other forms of gambling.

93% of children in the UK play video games, 40% of which have opened loot boxes

When it comes to gambling with skins, research found that it poses an acute risk to children and young people and frequently associated with addictive behaviour. There’s some interesting research here by Heather Wardle and Sarah Tipping from the University of Glasgow, who explored the association between problem gambling severity and 19 different gambling activities among emerging adults (16-26). On average skin gamblers scored more than twice as high on commonly-used measure of problem gambling behaviour.

How do skin gambling sites work?

Barron reported on dozens of offshore skin gambling sites that operate in a legal grey area and are built on Counter-Strike’s global platform, operated by Belleview, Wash.-based Valve Corm. Player can sell their skins for cash through third-party marketplaces, most of which are overseas. They also wrote this more recent piece which speaks to several young people and the issues it’s caused for them.

Ads for skin gambling are rife across social media, Google search and YouTube and sites have also mastered influencer marketing, with many game content creators promoting skin gambling sites to their viewers. Nearly a third of the Counter-Strike creators on livestreaming platform Twitch are sponsored by them too – although as of last year, Twitch updated its ‘community guidelines’ informing streamers that it will no longer allow the promotion or sponsorship of skin gambling sites on its live streaming platform.

Is it legal?

According to an article on esports.net skin betting is “technically illegal unless the gambling platform holds a particular betting licence, namely the Isle of Man licence”, obtained through the UK Gambling Commission. But depending on location, you can still access the platform offering skin betting.

It’s also nothing too new, in-game purchases of bonus items have long been available. But it’s how gamers are lured into casino-style betting to win them which is concerning. The BBC ran this piece about Skin betting back in 2017

The Guardian ran an article earlier this year, which looked at how a talented Counter-Strike gamer decided that rather than accepting the financial offer of advertising from a skin gambling site, he would expose the murky business behind it and how “it’s rotting the brains of young people.” He went on to make a documentary about it on YouTube here.

The challenge with most of these sites is there’s little regulation and young people are finding them easy to join and turning virtual money into real-money (and losses) easy.

What next?

One of the challenges of in-game virtual betting however is that many gamers find it hard to identify. Insight from the UK Gambling Commission found that the closer that the use of in-game items gets to gambling (for example betting with in-game items, money or virtual currency in hopes of winning a prize) the lower the levels of awareness and usage are.

The UK Government called for evidence in July 2022, observing a range of potential harms associated with loot boxes but that academic research had not yet established a causal link between look box spending and problem gambling behaviours. DCMS convened a working group of games industry representatives in July 2023 and the trade body, UK Interactive Entertainment, publishing UK games industry guidance on loot boxes. The implementation of this is underway with a future update pending, and there is now a video games research framework to improve the evidence based on the impacts of video games, including microtransactions and player spending.

As with retrofitting protections with social media, getting the insight, evidence and protections in place for gaming feels like a catch-up process. Meanwhile young gamers are navigating a challenging ecosystem.

Sources:

Young People and Gambling 2023: Official Statistics Gambling Commission https://www.gamblingcommission.gov.uk/report/young-people-and-gambling-2023/ypg-2023-online-gambling-awareness-and-use-of-in-game-items-in-video-games#:~:text=This%20is%20called%20skins%20gambling,boxes%20are%20akin%20to%20gambling.

The relationship between problematic gambling severity and engagement with gambling products: longitudinal analysis of the Emerging Adults Gambling Survey. Heather Wardle, Sarah Tipping, University of Glasgow 2022 https://onlinelibrary.wiley.com/doi/pdf/10.1111/add.16125?mod=article_inline

Exploring the relationship between psychological variables and loot box engagement, part 1: pre-registered hypothesis Dec 2023 and Exploring the relationship between psychological variables and look box engagement, part 2: exploratory analyses of complex relationships, Jan 2024, NIHR published in Royal Society Open Source, funded by Gamble Aware and completed by the Universities of Plymouth and Wolverhampton, and supported by PenARC. Final report from Gamble Aware, Lifting the Lid on Loot-Boxes here

Video Games Research Framework, May 2023, UK Government

New Principles and Guidance on paid loot boxes, UK Interactive Entertainment, July 2023