Guest Blog: Social Gaming: Through A European Looking Glass

Flycow Games

This article comes courtesy of Laurie Korpi, GambingCompliance’s International Legal and Research Director.

As my colleagues at GamblingCompliance’s editorial desk continue to track, social gaming continues to engage the industry. Just last week, the UK’s Gambling Commission put out a call seeking data from the social gaming industry, with a view to informing its appetite to regulate.

What data is available, such as those compiled by GamblingData, reveal a nascent, growing industry. While Europe, with 27% global revenue share, is home to the world’s second largest social gaming market, the global market is forecast to generate approximately $14.6bn by 2015 according to GamblingData research. GamblingData has also published findings that a selection of top-performing social casino games on Facebook alone could generate between $279m and $584m in combined annual revenues.

As the recent move by the UK’s Gambling Commission highlights, social gaming has caught the attention of gambling regulators.

Although a great deal of attention has been focused on gambling companies moving into social gaming, take Caesars Entertainment’s acquisition of Playtika; the flip side also shows, social gaming companies moving towards offering real-money gambling.

The business model of the company Betable – which offer social gaming developers a real-money gaming bolt-on using its UK gambling licence – highlights the cross pollination across the gambling and social gaming space.

While there is speculation about social gaming and gambling, particularly the convergence of the two, the movement from social to real-money also raises regulatory concerns. Concerns have been voiced that robust gambling regulation and the protections these afford do not penetrate social gaming. Such concerns have unsurprisingly interested regulators, particularly considering that regulators’ mandate – regardless of regulatory regime – includes consumer protection and protection of children. You only need to look at the Daily Mail’s headline “Fury at Facebook Online Casinos” to see the concerns some have about the phenomenon.

My colleagues and I at the legal and research desk at GamblingCompliance recently surveyed European regulatory approaches to social gaming, some of which I hope to share in an upcoming blog, but first, let’s lay out the ground work by looking at some fundamentals.

This blog series and accompanying reports will outline research my colleagues and I undertook into social gaming, in our Market Barriers series 2012/2013 on European Online Gambling, among other topics. The current report you can link through to on this blog examines whether social gaming could fall within a European member state’s definition of gambling and also considers other roads to possible regulation under European law and consumer protection legislation.

You can also download a GamblingCompliance report on the Social Gaming market in Europe.

This guest blog is a joint initiative by GamblingCompliance and Terrapin’s upcoming World Gaming Executive Summit in July. All registrants to the event will be able to download a series of research papers covering some of the themes of the upcoming summit.

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