The Convergence of Gaming and Gambling?
In recent decades we have seen a general trend toward liberalisation of gambling practices internationally 29, 15, 35, 28. Against this background active participation in gambling has been growing, as have rates of at-risk and problem gamblers in both adolescent and adult populations 8. Gambling is big business, and big news.
The same timeframe has also seen the increased gamification of our everyday life; in many areas services, systems an practices are converging with games and gameful design 26, and the ludification of culture, the ways in which identities are transformed by computer games and other digital technologies 40.
Gamification Word Cloud: Geoff Simon
Alongside which the growing prevalence of games as both leisure and instrumental activities 14, 37, of virtual economies 32, and the increased use of both micro-transactions and the free-to-play business model 1, 25, have all contributed to the increased accessibility and appeal of both video games and gambling and while gamification of our lives can generally be considered a positive development, the larger media convergence related to video games, gambling and game industry of has also brought on possible problematic aspects.
The blurring of boundaries between video games and gambling activities has led to a range of problematic scenarios for regulators and legislative bodies 43. Although the consequences of this trend are yet to be fully assessed, concerns regarding the potentially negative effects are numerous, they include: the targeting of vulnerable populations, most notably young people, through “gambling-like” experiences; and increased penetration of gambling using socially-accepted vehicles, whether sports or video games 33.
Allied to these specific concerns are those aspects of internet gambling which have been highlighted as potentially facilitating problematic behaviour, such as increased ease of access and the continuous availability of formerly discontinuous gambling activities 5, 20, 7.
For anyone inside the gaming community it will have been hard to escape the topic in recent years: whether it be the growing popularity of esports betting, controversies and debates over the practice of skins gambling, or even discussions about the game mechanics utilised in free-to-play games.
Controversy: Battlefront 2
But why has the issue been catapulted into mainstream awareness now? The answer is simple: Battlefront 2.
Overwatch Loot Box: Blizzard
This is where the makers of Battlefront 2 went wrong: certain items required for character progression were only available through opening loot boxes, and the randomly-generated nature of the contents meant players could never be sure whether they would receive the required items. Whether or not the players are fully aware of the nature of these randomly assigned prizes is a question that requires further investigation.
Compounding the above problem, the processes of earning currency by playing the game was organised in such a way that it would require many thousands of hours of play in order to potentially unlock all the contents of the game 2… a game that already cost an initial $60 to purchase. There was an immediate backlash from the fan community and an online campaign was initiated which led to the suspension of all in-game transactions and the attention of Belgium’s gambling regulators 4. A full explanation of the case can be found here21.
There is a debate as to whether loot boxes constitute a form of gambling 10, for most regulating authorities the situation is clouded by the use of virtual currencies and items, as they rely on a definition of gambling which includes paying a stake for the chance to win a prize. In this definition both the initial stake and the payout are quantified in terms of real-world money.
3D illustration by Quince Media
Currencies: real vs virtual
People may be familiar with the idea of crypto-currencies, such as Bitcoin, however many more variations on this theme exist: there are in-game currencies that are earned through achievements; there are in-game currencies which are purchased with real-world money; there are in-game currencies which can only be used in-game; there are in-game currencies which have online market exchanges. The situation gets even more complicated by the fact that, in addition to in-game currencies, there are in-game items (earned or purchased) obtained via loot boxes, which have online market places where they are traded. Like any other commodity value is set according to supply and demand, with”rare” items being purchased for many hundreds of dollars, despite the fact that the items are entirely decorative and do not affect gameplay in any way… welcome to the world of “skins” 6.The game most readily associated with skins, and especially skins gambling, is Counter Strike: Global Offensive. As CS:GO is a popular title in the international esports scene, skins gambling has often been discussed in terms of “esports gambling” but this is something of a misnomer as, despite utilising in-game items, the gambling activities often have limited connections to the esports per se.
What is esports?
The phenomenon of esports is one which encapsulates the connected themes of gamification, ludification, and the convergence of digital cultures. It is a form of sports where play is “facilitated by electronic systems”, i.e. competitive video gaming organised into leagues and tournaments 27. Industry analysts predict the number of global viewers to rise to 375 million during 2017 12. Additionally, esports gambling has only recently been embraced by mainstream companies, and fantasy esports did not exist prior to 2015, yet the two activities’ total active participants already exceeded 2.25 million within a year 12. Furthermore, it was estimated that over 3m people actively participated in the informal markets surrounding in-game items, such as skins lotteries 12during 2016.
Esports gambling is virtually identical to match betting and fantasy sports are virtually identical to established formats which use football, baseball, or any other traditional sport where wagers are placed on outcomes and events 44.
However, more novel manifestations of gambling practices have been realised, they include: PvP betting, opening loot crates/cases (as described above), skins lotteries, and the use of skins as wagers for casino and card games. PvP betting is a form of gambling where players stake money on their own performance rather than on the performance of others 23. Skins are used in gambling in two ways: first, as wagers in place of real-world currency for games ranging from simulated coin-flipping to real-world sports betting; second, as stakes in “lotteries” where the higher a player’s stake (as a percentage of the total pot) the higher their chance of winning the total pot, essentially a form of “jackpot”-style lottery 23. The most recent gambling activity to emerge in this area is “crash betting”, essentially a digital version of “chicken” in which the player tries to remain “in play” for as long as possible before the game “crashes”. The longer a player stays in, the bigger the multiplier of their origianl stake, but as time progresses so does the chance that the game will crash, leaving the player with nothing.
Other forms of gambling related to video/digital games but not associated with eSports are: Social Network Casino games (SNCs), free-play or practice areas of casino sites, in-game simulated gambling, and in-game gambling with proprietary virtual currencies such as in the games Eve Online 17, 45.
Work addressing the direct relationship between video gaming and gambling habits has only recently begun to be published 16, 19. However, there is a longer history of research into the structural similarities of video games and slot machines 22, as well as investigation of video gaming and associated pathological behaviour 39, 24.
Gaming and gambling
A key area of interest is whether there are particular characteristics of video gaming that serve to mediate, or facilitate, the practice of gambling. An example of the potential value of this knowledge would be to improve methods of identifying and treating those at risk of developing behavioural problems.
We can see that, from the large number of unregulated gambling sites connected to games, current international regulatory practices relating to the area are fragmented and not adequate to deal with this global activity 41. It is also apparent that some game developers appear unable, or unwilling, to address the issue themselves and find themselves subject to the threat of legal action 9. What we can see from this is that some developers are purposefully developing virtual economies as a way to increase the monetisation of consumers without regard to the potentially harmful effects on vulnerable groups, such as adolescents.
However, it is not the games industry that is creating this potentially damaging environment, it is the lack of understanding that permeates all sectors of society; from the general population, policy makers and regulators, to the gamers themselves. Recent reports have surfaced in the mainstream media which highlight the potentially serious effects of the current situation 3.
One potential course of action would simply be to provide players with information regarding probabilities relating to the “payouts” offered by any given loot box, thereby allowing consumers to make a more informed choice. This is an approach recently adopted by Chinese authorities 42.
Research on loot boxes is conducted at as part of the eSports research project at the Gamification Group (website under update, in the mean time, check http://gamification.gg/) of Tampere University of Technology and University of Tampere which is focused on the convergence of games and everyday life.
- Alha, K., Koskinen, E., Paavilainen, J., Hamari, J., & Kinnunen, J. (2014). Free-to-play games: Professionals’ perspectives.Proceedings of Nordic Digra, 2014.
- [AngryJoeShow]. (8 October 2017). Angry Rant – WTF?! at the Loot Crates in Battlefront 2! [Video File]. Retrieved from: https://www.youtube.com/watch?v=ne4CnyNW9O4
- Brustein, J., & Novy-Williams, E. (2016). Virtyal Weapons are Turning Teen Gamers Into Serious Gamblers. Retrieved from: https://www.bloomberg.com/features/2016-virtual-guns-counterstrike-gambling/
- Chalk, A. (2017). Belgium’s Justice Minister calls for loot box ban in Europe (Updated). Retrieved from: http://www.pcgamer.com/belgium-says-loot-boxes-are-gambling-wants-them-banned-in-europe/?utm_content=buffer66185&utm_medium=social&utm_source=facebook&utm_campaign=buffer_pcgamerfb
- Cotte, J., & Latour, K. (2009). Blackjack in the kitchen: Understanding online versus casino gambling. Journal of Consumer Research, 35(5), 742-758.
- Counter Strike. (2017). Skins. Retrieved from: http://counterstrike.wikia.com/wiki/Skins
- Deans, E. G., Thomas, S. L., Daube, M., & Derevensky, J. (2016). “I can sit on the beach and punt through my mobile phone”: The influence of physical and online environments on the gambling risk behaviours of young men. Social Science & Medicine, 166, 110-119.
- Delfabbro, P., King, D. L., & Derevensky, J. L. (2016). Adolescent Gambling and Problem Gambling: Prevalence, Current Issues, and Concerns. Current Addiction Reports, 3(3), 268-274.
- Doman, M. (2016). Counter-Strike developers Valve face lawsuit over ‘unconscionable, illegal’ online skins gambling. Retreived from: http://www.abc.net.au/news/2016-06-28/counter-strikes-valve-face-lawsuit-over-skins-gambling/7546646
- Donnelly, J. (2017). Blizzard CEO on loot boxes: ‘I don’t think Overwatch belongs in that controversy’. Retreived from: http://www.pcgamer.com/blizzard-president-on-loot-boxes-i-dont-think-overwatch-belongs-in-that-controversy/
- Edwards, E. (2017). Betting firms ‘should be taken out of sports sponsorship’. Retrieved from: https://www.irishtimes.com/sport/betting-firms-should-be-taken-out-of-sports-sponsorship-1.3280539
- Eilers Research: “eSports Betting: It’s Real, and Bigger Than You Think: Executive Summary” (2015). Retrieved from: http://www.esportsbets.com/wp-content/uploads/2015/09/eSports-Betting-White-Paper-Exec-Summary.pdf
- Ellson, A. (2017). Problem gambling grows by 50% in three years. Retrieved from:https://www.thetimes.co.uk/article/problem-gambling-grows-by-50-in-three-years-6b3w539tb
- ESA Annual report (2015). Retrieved from: http://www.theesa.com/wp-content/uploads/2014/10/ESA_2013_Annual_Report.pdf on 2/8/2016
- Fong, D. K., Fong, H. N., & Li, S. Z. (2011). The social cost of gambling in Macao: Before and after the liberalisation of the gaming industry. International Gambling Studies,11(01), 43-56.
- Forrest, C. J., King, D. L., & Delfabbro, P. H. (2015). The gambling preferences and behaviors of a community sample of Australian regular video game players. Journal of Gambling Studies, 1-12.
- Gainsbury, S. M., Hing, N., Delfabbro, P. H., & King, D. L. (2014). A taxonomy of gambling and casino games via social media and online technologies. International Gambling Studies, 14(2), 196-213.
- Gainsbury, S. M., Russell, A., Hing, N., Wood, R., Lubman, D. I., & Blaszczynski, A. (2014). The prevalence and determinants of problem gambling in australia: Assessing the impact of interactive gambling and new technologies. Psychology of Addictive Behaviors : Journal of the Society of Psychologists in Addictive Behaviors, 28(3), 769-779.
- Gainsbury, S. M., Russell, A. M., King, D. L., Delfabbro, P., & Hing, N. (2016). Migration from social casino games to gambling: motivations and characteristics of gamers who gamble. Computers in Human Behavior, 63, 59-67.
- Gainsbury, S., Wood, R., Russell, A., Hing, N., & Blaszczynski, A. (2012). A digital revolution: Comparison of demographic profiles, attitudes and gambling behavior of internet and non-internet gamblers. Computers in Human Behavior, 28(4), 1388.
- Gilbert, B. (2017). The new ‘Star Wars’ game is embroiled in controversy, and fans are furious — here’s what’s going on. Retrieved from: http://www.businessinsider.com/star-wars-battlefront-2-mess-explained-2017-11?r=US&IR=T&IR=T/#problems-started-long-before-the-games-release-1
- Griffiths, M., & Wood, R. T. (2000). Risk factors in adolescence: The case of gambling, videogame playing, and the Internet. Journal of gambling studies,16(2-3), 199-225.
- Grove, C. (2016). Esports & Gambling: Where’s the Action? Retrieved from https://www.esportsbettingreport.com/gambling/
- Gunuc, S. (2015). Relationships and associations between video game and Internet addictions: Is tolerance a symptom seen in all conditions. Computers in Human Behavior, 49, 517-525.
- Hamari, J. (2015). Why do people buy virtual goods? Attitude toward virtual good purchases versus game enjoyment.International Journal of Information Management, 35(3), 299-308.
- Hamari, J., Huotari, K., & Tolvanen, J. (2015). Gamification and economics. In S. P. Walz & S. Deterding (Eds.), The Gameful World: Approaches, Issues, Applications (pp. 139-161). Cambridge, MA: MIT Press.
- Hamari, J., & Sjöblom, M. (2016). What is eSports and why do people watch it? Internet research. DOI: 10.1108/IntR-04-2016-
- Jensen, C. (2016). Money over misery: restrictive gambling legislation in an era of liberalization.Journal of European Public Policy, 1-16.
- Kingma, S. (2006).The Leeway of Lotteries in the European Union. An pilotstudy on the liberalisation of gambling markets in EU. Rozenberg Publishers.
- Knaus, C. (2017). Gambling regulators to investigate ‘loot boxes’ in video games. Retrieved from: https://www.theguardian.com/games/2017/nov/24/gambling-regulators-to-investigate-loot-boxes-in-video-games
- Lahti, E. (2011). BREAKING: Team Fortress 2 is now free to play “forever”. Retreived from: http://www.pcgamer.com/breaking-team-fortress-2-is-now-free-to-play-forever/
- Lehdonvirta, V., & Castronova, E. (2014).Virtual economies: Design and analysis. MIT Press.
- Lopez-Gonzalez, H., & Griffiths, M. D. (2016). Understanding the convergence of markets in online sports betting. International Review for the Sociology of Sport.
- Macey, J., & Hamari, J. (2018). Investigating relationships between video gaming, spectating esports, and gambling. Computers in Human Behavior, 80, 344-353.
- Markham, F., & Young, M. (2015). “Big Gambling”: The rise of the global industry-state gambling complex.Addiction Research & Theory, 23(1), 1-4.
- Martinson, J. (2007). Gamble your life away in ZT Online. Retrieved from: http://www.danwei.org/electronic_games/gambling_your_life_away_in_zt.php
- Mäyrä, F. (2016, May 23) The Finnish Player Barometer 2015 (Pelaajabarometri 2015 Lajityyppien suosio). Retrieved from: http://tampub.uta.fi/handle/10024/99003 on 2/8/2016
- Newman, J. (2017). How Loot Boxes Led to Never-Ending Games (And Always-Paying Players): A history of loot boxes and their impact on video games. Retrieved from: http://www.rollingstone.com/glixel/features/loot-boxes-never-ending-games-and-always-paying-players-w511655
- Ng, B. D., & Wiemer-Hastings, P. (2005). Addiction to the internet and online gaming.Cyberpsychology & behavior, 8(2), 110-113.
- Raessens, J. (2006). Playful identities, or the ludification of culture. Games and Culture, 1(1), 52-57.
- Tassi, P. (2016). CS:GO Lotto Controversy Raises Issues About YouTuber Disclosure, Valve’s Indifference. Retrieved from: https://www.forbes.com/sites/insertcoin/2016/07/05/cs-go-lotto-controversy-raises-issues-about-youtuber-disclosure-valves-indifference/#586d08b65b31
- Tassi, P. (2017). China Has Forced Blizzard To Reveal Exact ‘Overwatch’ And ‘Hearthstone’ Drop Rates. Retrieved from: https://www.forbes.com/sites/insertcoin/2017/05/05/china-has-forced-blizzard-to-reveal-exact-overwatch-and-hearthstone-drop-rates/#5186a38d5a14
- Teichert, T., Gainsbury, S., & Muhlbach, C. (2017). Positioning of online gambling and gaming products from a consumer perspective: A blurring of perceived boundaries. Computers in Human Behavior.
- Tsai, M. R. (2015). Fantasy (e) sports: The future prospect of fantasy sports betting amongst organized multiplayer video game competitions. UNLV Gaming LJ, 6, 393.
- Woodford, D. (May 17, 2013). Dispute resolution across platforms : Offshore gambling industry & EVE online. In Proceedings of the 1st International Workshop on EVE Online (39-46).
- Zarb-Cousin, M. (2017). We can’t let fixed-odds betting terminals keep ruining lives. Retrieved from: https://www.newstatesman.com/2017/10/we-can-t-let-fixed-odds-betting-terminals-keep-ruining-lives