Company Focus: The Change in Playing Field for Gaming: Games of Skill vs Games of Chance

img src="img/company_focus/alderney/alderney-gambling.jpg" width="100%"> Susan O'Leary, CEO of Alderney eGambling, discusses the evolution of gaming from a regulatory perspective and the elements of harm akin to both games of chance and games of skill

The role of a regulator is clear and simple; to protect consumers from harm and to provide a framework for fairness of the game and integrity.

Historically and still to this date, games of chance are perceived to pose the greatest harm to consumers, for many reasons but primarily due to their more addictive nature as verified by many psychological studies. Watch-dogs around the globe including regulators and legislators are the most stringent when it comes to games of chance.

Whilst it is understandable that real-money games of chance are prioritised in terms of risk factors, it could be argued that the harm factor associated with games of skill has been somewhat overlooked. In particular, the mediums and methods and ease that players can now engage in gaming and gambling has changed considerably since gambling laws and regulations were adopted. Technology has disrupted the way gambling and gaming is conducted. As such, the traditional models of player protection are outdated.

Smartphone and tablet penetration is at an all-time high and data services are faster, more reliable and cheaper than ever before. It is now possible to stay at home and play a game all day on a device whereas before, this would not have been possible.

Identifying the harm that can occur:

It doesn’t matter whether consumers are playing a game of chance or a game of skill, or for real or virtual money - the risk of harm is ever-present. Harm includes problem play, addiction, monetary loss, social isolation and changes to character and personality.

The seriousness of harm posed by all types of gaming is becoming increasingly acknowledged and understood. In December last year, the World Health Organisation added “gaming disorder” to their International Classification of Diseases for 2018. This is a significant move; it shows the potential harm posed by these games is high, and that more needs to be done to protect consumers.

New markets, same potential for harm:

Improving the protections provided to those who play games of skill is something operators, suppliers and regulators in both existing and emerging markets must get their heads around. This is certainly true in the latter, where skill games will likely play a central role.

Take India, for example.

While gambling is illegal, games of skill are not deemed to be gambling, per se. What qualifies as a game of skill is (and always has been) a point of contention, but in India at least rummy, poker, daily fantasy sports and potentially horse racing and sports betting can meet the definition in certain provinces. Only rummy has Federal recognition as a game of skill.

Even if a game is considered to be one of skill, the harm factor is the same as with a game of chance. It is important to not place too much emphasis on what defines a game of skill/chance - sports betting is very much seen as gambling in the UK, for example.

Instead, operators, suppliers and regulators must acknowledge the potential for harm is prevalent in both. In India, at least, this is the approach being taken. I have recently visited the country, and have been working closely with the All Indian Gaming Federation (AIGF).

The AIGF is working on a self-regulatory framework for games of skill (which is likely to include sports betting) to ensure consumers are properly protected. This initiative is well received by industry.

It comes down to fairness and integrity:

Delivering the necessary protection comes down to two things - fairness and integrity. This requires technical standards that are robust yet flexible, and this is something the Alderney Gambling Control Commission (AGCC) has been offering for several years now.

The AGCC is one of only a few regulators that has the experience and skill required to take a risk-based approach to licensing, which means licensees are compliant with the highest possible standards, but without being stifled by over-regulation.

The Alderney framework adjusts risk proportionately, and means rules and regulations can be applied to a business in a practical way, and only if required, rather than a blanket obligation to conform even when they are not applicable or relevant. The AGCC has regulated both games of skill and games of chance for nearly 20 years.

Another angle of this increase in harm associated with all types of play and not just games of chance relates to the increase in penalties and action taken by regulatory bodies. The industry is the ultimate expert and it may be said that they are passively waiting for regulators to take action and change the status quo. The industry could own this itself. To do this, it could take a step back and look at gaming and gambling in 2018 and lead the way for a framework that works for all parties. Be proactive not reactive.

The industry needs to look at things differently and take back ownership of their sector. Assessing the market with fresh eyes is required. In the meantime, Alderney’s model is the solution for a well-adjusted and fit for purpose framework for all types of gaming and gambling, skill games and games of chance.