Is Social Gaming Regulation Coming to a Mobile Near You?

Mark Stephens

Although online gambling sites have come under the hammer of regulators around the world, social gaming has, until recently, had a less bumpy journey. However, the lines between gaming and gambling have become increasingly blurred with ‘social gaming’ often being used interchangeably to refer to hardcore poker sites as well as innocent farming or quiz games. This is reflected in a recent move by the UK that could open the floodgates for tighter regulations in other countries. Could they be coming to a mobile phone or tablet near you soon?


Background to the UK Regulations

Traditionally the UK’s online gambling industry has been less regulated than across the water in the US. Towards the end of last year, however, the Office of Fair Trading (OFT) in the UK began to investigate how all online gaming (including social gaming) affected consumers, especially youngsters.

There was concern that some of the practices being used were unfair, misleading or overly aggressive, especially with regards to in-game purchases.

The dissenting voices were many and loud. For instance Raf Keustermans, CEO of a London-based social casino developer, said:

“If the concern is around money, then that exists in every market: from people who spend too much on golf equipment, to magazines and shopping. There is no indication that there is a bigger problem….the behaviour of social gamers and problem gamblers is completely different as, when people play for fun, they know they cannot win money and that means they don’t get into a cycle of chasing cash and loss.”


He has a point. As others have pointed out, is buying a coin or a power up in a social game any different to downloading a song from iTunes?

However, the UK is not alone. In 2012, Japan introduced regulations to ban a particularly lucrative mechanic found in Japan’s highest grossing mobile-social games – a move which affected the likes of GREE and DeNA, two of the world’s largest social gaming developers at the time.

The OFT’s Eight Guiding Principles

The UK’s regulating body released a set of eight guiding principles that will apply to all online and mobile apps after April 1st 2014 i.e. all the social games that UK players are currently playing. Effectively, it applies to around three-quarters of UK adults and almost 90 percent of adolescents.

Following is a summary of the OFT’s proposed eight principles:

1. Games must provide an up-front, clear, accurate and prominent breakdown of game costs before allowing downloads or gameplay.
2. Material information on the game should be clear, accurate, prominent and provided up-front, before allowing downloads or gameplay.
3. Contact details and information on complaints handling should be easy to obtain, clear, accurate, prominent and provided up-front, before allowing downloads or gameplay.
4. In-game promotions of paid-for content should be clear and distinguishable from normal gameplay, with the burden for clarity increasing with a decreasing target audience age.
5. In-game purchases must not appear necessary unless they really are: players must not be misled into thinking that payments are an integral part of the game if that is not the case.
6. Games should not use commercially aggressive strategies, which may exploit a child or young person’s inexperience, vulnerability or credulity.
7. A game should not include direct exhortations to children to make a purchase or persuade others to make purchases for them.
8. No unauthorised payments should be taken. Payments must be authorised by the account holder and consent should not be assumed via opt-out provisions.

Consistency in Regulations

Having cross-border consistency in social gaming regulations would be very tricky. If countries cannot agree on saving the planet how will they agree on how to regulate games?

With social gaming being a global phenomenon and virtually anyone, anywhere nowadays able to play these games, how effective are these regulations going to be unless all countries apply them across the board?

According to Keustermans developers may move to zones where regulations are less stringent:

“In a time where the economy is suffering, it’s not clever to force out a sector of the market that’s flourishing. Talks between platform providers, such as Facebook and Google, and suppliers would be more helpful at preventing things from getting out of hand.”

The other consideration is: where does it stop? Would console games require more regulations to bring them into line with social games played on tablets and mobiles?

As with all regulations, you have to ask who benefits? Protecting youngsters is one thing but if these regulations are being lobbied for by special interest groups who are set to gain financially from the regulations, or by governments simply to exert more control, then further questions need to be asked.

Otherwise the continued blurring of the lines between online gambling and social gaming could punish innocent games that are just trying to earn an honest buck, and make life more complicated for developers creating games for the likes of Facebook, Google and Apple.