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Guest blog | Santiago Asensi on regulatory pressure and blurred lines

By: Santiago Asensi, Managing Partner at Asensi Abogados

The past 17th of September, fifteen regulators from Europe and the Washington State regulator signed a declaration in which they noted their increased concern with regard to “the risks being posed by the blurring of lines between gambling and other forms of digital entertainment such as video gaming. Concerns in this area have manifested themselves in controversies relating to skin betting, loot boxes, social casino gaming and the use of gambling themed content within video games available to children.”

First and foremost, it should be noted that this declaration springs from the regulators’ desire to protect minors from exposure to gambling-like products. In an increasing number of cases, certain elements of modern video or social games share many similarities with traditional gambling products. These video games and social games, however, are not classified as gambling. Thus, it could be argued that these gambling regulators are not entitled to be part of this particular debate.

Certainly, one of the main aspects of drawing up gambling regulation is to identify those particular elements (among many others) that fall under the legal definition of “gambling.” This is absolutely crucial when it comes to drawing up the red line between gambling products that require a license and games that do not need a license. This distinction, naturally, also helps define – and limit – the particular scope of gambling regulators’ powers. Those games that fall under the definition of gambling are subject to their oversight, while those games that do not qualify as gambling are beyond their competences.

However, the real cornerstone of any given gambling regulation is the collection of public policies, defined by the legislature, that underlie the gambling regulation as developed by the regulator. The protection of minors is a common goal of all the jurisdictions whose gambling regulators have signed the declaration.

Second, the regulators’ initiative needs to be placed within the context of the various political debates currently taking place in relation to matters like gambling advertising, product restrictions, age verification, etc. Without question, these debates are pressuring regulators into taking up defensive positions, where any new policy, rule or provision that could be applauded by the industry requires much stronger justifications than in the past. Political and media pressure sees to that.

Hopefully, the declaration will be effective in achieving positive results with regard to the protection of minors. Furthering this laudable goal through working closely with consumer protection authorities, as well as holding discussions with other relevant stakeholders seems the right first step. These discussions, however, should not only help to accomplish the primary goal of protecting minors, these may also assist in improving the public image of the industries involved.

Santiago Asensi Managing Partner Asensi Abogados

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