Tackling Underage Gambling – Challenge Caused by SM

Posted by Harry Kane on Monday, February 25, 2019

The issue of underage gambling is an increasingly pressing one in the UK, with the number of children classed as having a gambling problem having quadrupled to more than 50,000 in the last two years.

Additionally, a 2018 Gambling Commission revealed that an estimated 450,000 children aged between 11 and 16 bets regularly online, which is more than those who have taken drugs, smoke or drunk alcohol.

While some may have questioned the true authenticity of these statistics, it’s little wonder that the UKGC moved to tackle this issue as 2018 drew to a close. We’ll explore this further below while asking how regulators can achieve their objectives in an age where social media provides such a pertinent threat.

How Did the UKGC Look to Clampdown in 2018?

One of the Commission’s core strategic objectives through 2021 is to protect the interests of vulnerable gamblers, and this includes underage citizens who have wagered regularly online.

As a result, 2018 saw regulators introduce a number of regulatory measures to minimise the threat of underage gambling and prevent operators from inadvertently targeting youngsters through their advertising campaigns.

The ultimate aim of these measures is to prevent children from being exposed to online gambling at a young and vulnerable age, while many of the new regulations came into force on January 1st.

The first, and most prominent, of these measures, has forbidden operators and game developers from outwardly marketing slots that are thematically centred around child-friendly pop cultural icons. This ruling is particularly pertinent to slot gaming, which has enjoyed exponential growth during the last decade and now accounts for more than two-thirds of the online GGY in the UK.

In many ways, the growth of slot games has been built on the used of various pop cultural themes, as developers have drawn from the world’s most popular films, songs and television series’. Recently, we’ve even seen various football clubs partner with developers to create sports-themed slots, enabling operators to directly target a large demographic of potential gamblers.

Ultimately, promoting this type of online experience has allowed operators to expand their reach through slot gaming, as they look to target both serious and casual gamblers with a host of themed and varied titles.

This new measure will, therefore, create some disruption in the slot gaming market, with popular titles centred on iconic fairy-tale protagonists like Little Red Riding and Hansel and Gretal facing the prospect of being significantly marginalised in the near-term.

At the same time, operators will need to be increasingly selective when developing new marking campaigns in the future, or risk incurring the wrath of an increasingly stringent regulatory body.

Interestingly, this headline-grabbing regulation has also created some confusion in the market, particularly with a growing number of slot themes appealing to both adults and children alike.

Take slot titles based on Doctor Who, Star Wars and The Simpsons, which target a vast adult audience whilst also capturing the imagination of children nationwide.

It has yet to be seen how regulators will tackle the use of these games as influential marketing tools, and any attempts to prohibit such a practice could well trigger a backlash from British-based operators.

On a similar note, regulators have also set their sights on mobile app marketing, which is a specific channel that can inadvertently target children as smartphones become increasingly prevalent amongst children.

According to a 2016 study of 1,500 parents by Opinium, children now own their first mobile handset by the tender age of seven, with some receiving a smartphone from as young as five. On average, children also receive their first iPad aged eight, while most will have access to a fully-functioning smartphone by the time they’ve reached 10.

Not only does this explain why the number of mobile phone users is expected to pass the five billion mark this year, but it also highlights a worrying trend in terms of smartphone usage among potentially vulnerable and underage gamblers.

More specifically, children with a smartphone will be able to access a range of mobile apps and in-game marketing material on a daily basis, and this content includes adverts for virtual casino games and platforms.

Both the UKGC and marketing regulator have described these adverts as being exploitative, even though it’s widely accepted that the vast majority of reputable operators are not deliberately targeting children with their in-app marketing campaigns.

Regardless, regulators are committed to ensuring that under-18s are protected against such widespread and readily accessible promotions, especially those that are focused on popular slot game titles.

So while the decision to regulate iGaming marketing content represents the first step towards achieving this aim, we should expect to see further measures aimed at clamping down on campaigns conducted through mobile apps.

The UKGC has also discussed scrutinising additional aspects of online gaming and digital marketing that may pose a threat to vulnerable children. While many of these are hard to define and regulate outright, the Commission is committed to continually reviewing best practice and introducing new measures as time passes by.

Take the inclusion of brightly coloured illustrations and cartoon characters in iGaming advertising campaigns, which despite being a broad and relatively vague concern remains a serious area of focus for regulators.

Similarly, the UKGC has also worked with the Committee of Advertising Practices Code to review apps and online games that feature gambling components despite being initially available to play for free.

As a result, these titles can no longer be marketed towards people under the age of 18, while the failure to comply with this or any of the measures mentioned above will lead to significant fines and sanctions for operators.

Appraising the Role of Social Media in Underage Gambling

The desire of the UKGC to expand its reach through partnerships and collaboration is pivotal, particularly given that the proportion of underage gamblers who actually frequent online casinos are thought to be negligible.

As a result, the measures we discussed earlier in the piece may not prove to be particularly effective, with evidence suggesting that most underage gamblers are accessing content through completely different channels.

Some of these channels are even located offline, with pub slots offering a relevant case in point. According to data recorded in November last year, nine out of 10 of the nation’s largely unregulated public houses are failing to prevent underage gambling on their premises, with social betting clearly providing an underrated and more complex challenge for regulators.

Another serious threat is provided by so-called ‘loot boxes’, which are essentially virtual containers that can be purchased for real money and contain a host of entirely random artefacts. These are relevant to a specific console game, and usually help players to advance through various levels and specific in-game objectives.

Given that these boxes can be purchased for real cash and include an entirely randomised selection of valuable items, it’s little wonder that the authorities in Belgium and Holland have moved to ban this practice. The argument here is that this type of gaming feature encourages a gambling mindset among players, many of whom will be significantly younger than 16.

Interestingly, the UKGC stated that it would not step in to regulate or ban loot boxes in the UK, despite confirming that it would continue to monitor the practice. Its reasoning was sound, as the prizes in question are only usable in games in which they are won and cannot be cashed out, meaning that loot boxes do not fit the regulator’s detailed description of gambling activity.

The UKGC is coming under increased pressure to act on this issue, however, and this is certainly an interesting space to watch in the near-term. Despite these concerns, it’s undoubtedly social media that provides the biggest threat in terms of underage gambling in the UK (and across the globe). At the heart of this issue is the fact that children can register for an account on sites such as Facebook and Instagram from the age of 13, with inadequate measures in place to verify the actual ages of users.

This has been borne out by the fact that a staggering 600,000 children in Britain are using Facebook despite being younger than the network’s minimum age. This, coupled with the fact that Facebook and similar social media giants have minimal regulatory restrictions in terms of the user-generated content that’s published, means that British kids are constantly being exposed to a host of games with strong gambling themes.

Alongside a number of real-money gambling games, Facebook has also published free-to-play titles that feature childlike themes and characters. These are clearly aimed at younger users and are considered by responsible gambling groups to provide a gateway to casino platforms and real-money wagering.

These factors make for a potent mix in the world of social gaming, and one that’s becoming increasingly accountable for the rise of underage gamblers across the length and breadth of the UK. They also explain why 13% of 11 to 16-year-olds have played social games that include a core gambling element, with this number only like to increase without the introduction of more stringent regulations.

It’s also fair to surmise that children are becoming increasingly exposed to gambling brands and operators through social media channels. According to the Gambling Commission, a worrying 12% of 11 to 16-year-olds currently follow a gambling brand online, with boys almost twice as likely to engage with the type of company than girls.

Herein lies the challenge for regulators; as the most common channels that children gamble through are not licensed casino platforms that are accessible online. Instead, kids are being exposed to gambling in informal surroundings that lack stringent regulatory measures, with social media embodying this type of environment in the digital age.

Many of these channels (including social media and the loot boxes found on console games) also suffer from a lack of stringent age verification policies. This is in stark contrast with online casino platforms, which require new registrants to verify both their date of birth and their identity before being eligible to play.

As a result, we cannot underestimate the role that social media and similar channels play in underage gambling in the modern age, and recognising this will help regulators to really get to grips with the problem in the future.

The Last Word

Ultimately, the UKGC have sterling work in attempting to regulate online gambling operators, both in terms of safeguarding vulnerable players and defining the best practice for digital and television marketing campaigns.

The new regulations have certainly been welcomed by most iGaming businesses and gambling awareness groups alike, with many of the former having had their reputation and brand identity tarnished by an association with underage gambling and the failure to protect their customers.

However, there has been some opposition to the measures that have been imposed, with several operators arguing that the new advertising guidelines are largely ineffective and unnecessarily restrictive as a result.

One of the issues was the ambiguous nature of the new regulations, which is causing confusion in the marketplace and preventing brands from realising the full potential of their marketing campaigns.

Perhaps most pertinently, however, these operators have recognised that a rising number of underage gamblers are not accessing content through online casino platforms, creating a sense that they’re being unfairly targeted by the regulator.

There’s certainly some merit to this point, and these brands would probably prefer regulators and government bodies to focus on regulating the most popular social media channels as their leading priority.

The issue that remains is that social media and loot boxes remain outside the UKGC’s jurisdiction, for now, meaning that it cannot help to regulate these channels without significant assistance from the government, external partners and various charitable gambling organisations.

The good news is that the marketing regulations introduced by the UKGC have not had a significantly adverse effect on the leading operators within the sector, aside from some disruption to marketing campaigns and the removal of a handful of titles from Android and iOS app stores.

From the perspective of underage gambling, however, there’s still a great deal of work to be done to protect youngsters in the UK and across the globe. This will require significant effort and collaboration between various different authorities, while these bodies must also understand the channels that are most problematic.