Why Does An Australian Politician Want To Classify Online Games As “Gambling”?

Is it game over for Mario Kart tournaments?

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Politicians and video games. Two things that mix together as well as Paul McCartney and Rihanna. In the US, elected representatives seem to spend more time trying to outlaw violent video games than actual guns. Here in Australia, influential Senator Nick Xenophon isn’t happy with some games. It’s not because they’re too violent, but because he thinks they’re being used to “groom” children for gambling. Now Xenophon wants to introduce new laws that would regulate certain kinds of games and treat them like online gambling websites.

Xenophon’s particularly unhappy with games like Counter-Strike: Global Offensive: a multiplayer first-person shooter, that allow players to buy “cases” containing randomly generated items with an in-game value. Players spend real money trying to score “skins” that make their weapons look flashier. Some skins can be worth thousands of dollars. Players can buy them, or win them in game, but they can also bet them on third party websites in a sort of digital version of roulette.

According to one research firm, skins gambling is already worth nearly $10 billion a year. But what exactly is the problem?

Teenagers Are Spending Thousands On Skins Gambling

Because skins gambling doesn’t technically involve actual money, it’s completely unregulated, unlikely the mainstream gambling industry. Back in May 7.30 spoke to a number of teenagers who had spent thousands of dollars gambling in-game skins. One gamer they spoke too ended up stealing his dad’s credit card and spending nearly $2,000. “I just had that urge,” he said. “I hated it and I hated myself after it, but at the time I just thought ‘I won’t get caught’.”

The issue is broader than just Counter-Strike. Hearthstone, a popular digital card game, requires players to buy packs of virtual cards. Some packs contain better cards than others, but players don’t know what’s in them until they are opened. They’re basically the digital equivalent to Pokemon cards, but under certain definitions might be considered online gambling.

Skins gambling and games like Hearthstone are quite different to traditional forms of gambling, but some experts believe that they fall into the same category as poker machines and should be regulated in the same way.

What Does Nick Xenophon Want To Change?

This isn’t the first time Senator Xenophon has called for more regulation when it comes to games. In 2012 he called for arcade-style games aimed at kids to be outlawed in casinos, claiming they “groomed kids to gamble”. But other than calling for games like Counter-Strike to be regulated under the Interactive Gambling Act 2001, it’s not exactly clear what he wants to do. The closest Xenophon came to giving a clear example was calling for clearer warnings on video games at the point of purchase, and blocking links to third-party gambling websites.

During an interview with Sunrise, Xenophon seemed to narrow his proposal down to dealing specifically with gambling websites, rather than games more generally. “Having games purchasing something online is one thing, but when you link it to a game of chance, when you link it to poker machine-like reel activity and you link it to actual gambling websites where credits can be used, can morph into gambling is a real issue,” he said.

The fact that Xenophon has called for significant regulatory change, but has’t been able to actually pinpoint what that means, is actually a pretty big problem. He’s likely to be one of the most influential politicians in this term of parliament, and it’s incumbent upon all legislators to think through their proposals before running to the media and creating confusion across the communities they want to regulate. That’s not to say the industry doesn’t need to be regulated, proposals should just be more considered before they spark a moral panic.

So How Should We Regulate Online Gaming?

There are actually a number of different kinds of gambling that go on in the gaming scene. Competitive gaming, known as eSports, has a whole side industry of regulated gambling attached to it run by companies like TAB and Sportsbet. That kind of gambling is legitimate and works in pretty much the same way as betting on regular sports like AFL and NRL. You can bet on which teams you want to win and how much they will win by, for example.

The tricky bit relates to things like skins gambling, which is less clear cut. Michael Hing, the former host of ABC’s dedicated eSports program, Good Game: Well Played, thinks it’s important to treat skins gambling the same way we treat other forms of gambling. “If it’s adults doing it, then they can do what they want, right? It’s no different to going to the casino or horse track or whatever. I’ve never gambled with skins and I can’t imagine I ever would, but adults can do what they want. Maybe taxes on skins can be another revenue stream for the NSW government?” he told Junkee.


An example of “skins” Counter-Strike plays can win from gambling websites.

It’s a complex issue, but it’s pretty clear that unscrupulous skins gambling websites are taking advantage of the current lack of regulation. Simple things like prohibiting under 18s from taking part would be a good place to start, but other, more comprehensive measures could also be warranted. One of the challenges is the fact that very few politicians have any idea about how video games actually work.

Hing thinks that the issue of skins betting is more serious than the debate around violent video games that dominated discussions in the ’90s. “In the long term I think a lot of people in the industry would welcome more government regulation because it would allow for better long term strategic planning. The problem is that very few people in government have taken the time to learn about the thing they’re talking about, as evidenced by the current confusion,” he said.

“A lot of the worry in the gaming community you have is when politicians come in and go ‘All eSports is gambling’, and then it’s like ‘Woah we were just trying to have a Mario Kart tournament — how is this gambling?'”