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// Public Gaming International // March/April 2015
1 “International Social Games Association—Best Practice Principles Version 2,”
October 2014—http://www.i-sga.org/wp-content/uploads/2013/11/ISGA_best-
practiseprinciples_October2014.pdf
2 Question for written answer E-002326/2015 submitted to the European Com-
mission on 12 February 2015 by MEP’s Kefalogiannis and Zagorakis (PPE)
—available through
-
questions.html
3 European Commission’s answer is still pending.
4 See e.g. the UK Office of Fair Trading “The OFT’s Principles for online and
app-based games”—https://www.gov.uk/government/uploads/system/uploads/
attachment_data/file/288360/oft1519.pdf
5 See e.g. CJEU, Placanica, C-338/04, C-359/04 and C-360/04 of 6 March 2007;
Markus Stoss, C-316/07, 358/07, 359/07, 360/07, 409/07 & 410/07 of 8 Sep-
tember 2010; Carmen Media, C-46/08, of 8 September 2010.
6 Commission Recommendation of 14 July 2014 on principles for the protection
of consumers and players of online gambling services and for the prevention of
minors from gambling online (2014/478/EU).
not intend to adopt specific regulation and instead provide guidance ex-
plaining how general consumer protection rules should be followed in
the social gaming and gaming apps environment.
4
So the current legislative “landscape” can be summarised as follows:
either social gaming activities do fall under the national definition of
“gambling” or other specific gambling activities and are thus regulated
accordingly; or, they do not meet the conditions necessary to qualify as
“gambling” under national legislation and so are subject to general legal
provisions and, in particular, Directive 2000/31/CE (the “e-Commerce
Directive”) and its national implementing legislation. This situation
means that social gaming operators, as far as they do not qualify as gam-
bling services, are not required to be granted a gambling licence and, as
they fall under the “home country” principle set out in Article 3 of the
e-Commerce Directive, they remain subject to the rules of their “country
of origin” or “home country” (which is defined as the country where they
are established). This outcome stops the consumer’s Member State from
preventing or limiting the provision of such activities to its residents (un-
like with the principles applying to online gambling services). Consider-
ing the developments in the social gaming environment the absence of
control through the gambling legislation is there for very problematic.
It should be remembered that the case-law of the Court of Justice of
the EU (“CJEU”) and the EU institutions’ decisions have defined crite-
ria, conditions and requirements that strictly apply to the provision of
gambling services with the intention of offering consumers the most re-
sponsible gaming activities. To that end, the CJEU has set out different
criteria and, especially, the requirement that legal lottery operators should
refrain from providing an extensive and inconsistent range of games and
should limit their advertising campaigns and their offerings (both in qual-
itative as well as quantitative terms).
5
Moreover, national authorities set
out a number of requirements to ensure the responsible provision of lot-
tery and other gambling activities (including technical requirements and
testing procedures/drawing procedures; hourly loss restrictions; “cooling
down” periods; specific advertising hours; strict prohibition to direct
minors). The recent publication of the European Commission’s Recom-
mendation on online gambling of 14 July 2014
6
also aims to serve the
same purpose. This Commission document provided recommendations
on a variety of issues concerning responsible gaming messages, advertising
and “self-exclusion” and “time-out” mechanisms, all intended to ensure a
fair and responsible gambling offering, although in most Member States
the national standards are higher. It should be noted that social gaming
operators’ associations, such as the ISGA, have defined principles and
guidelines intended to ensure proper and responsible provision of such
activities. Nevertheless, it must be pointed out that those principles only
remain at the level of self-regulation and so are non-binding legislative
instruments that, if not complied with, do not lead to any punishment.
Indeed all the principles outlined above do not apply to social gam-
ing activities that do not qualify as gambling based under the national
legislation concerned. At the same time those activities could entail ele-
ments and features identical or at least similar to gambling activities,
without being subject to the same requirements. This situation has been
noted recently within national frameworks and, in particular, in Bel-
gium. The Belgian Gaming Commission, following several complaints
from consumers, investigated and recently issued a police report against
the company operating the social game Game of War (i.e. Machine
Zone). The Belgian Gaming Commission found that although this
game had been introduced as a simple skill and strategy game, it never-
theless exploited elements commonly used in games of chance and led
a 15 year-old individual to spend more than EUR 20,000 to enhance
his gaming experience. The Belgian Gaming Commission concluded
that the game entailed lots of real-gambling features and that Machine
Zone offered de facto gambling-type activities to minors in breach of
Belgian gambling legislation. The police report has been transferred to
the public prosecutor for the criminal proceedings to follow its course.
The outcome of the court case is of course very important.
In conclusion, lotteries are subject to constant and increasing require-
ments at the national and EU level concerning responsible gaming and
use their best efforts to enhance their corporate social responsibility
and to fight against risks inherent to gambling (e.g. through training
sessions, funding medical programs, the provision of helplines), while
social gaming operators’ activities could wipe out all those hard-won
benefits achieved over the last 20 years.
All social gaming activities offered through social media platforms
or apps that target minors and that are portrayed as mere skill, strategy
or soft gambling games (while allowing players to take the full advan-
tage of the gaming experience through the purchase of specific credits,
without any strict requirements, limitations or any other criteria aimed
at restraining addiction(s) that players could develop through their par-
ticipation) should be regulated and subject to specific conditions.
Currently, social gaming operators seem allowed to include gambling
features in their so-called strategy or soft games while at the same type
not falling under the specific requirements and safeguards applicable to
gambling operators; this situation seems to favour the early development
of addiction behaviours. Furthermore, all efforts carried out by lotter-
ies to prevent gambling addiction could turn out to be pointless should
nothing prohibit young consumers from taking part in social gaming
activities that give rise and/or increase the propensity to gamble.
Based on the Belgian Gaming Commission’s example, national and
EU authorities must act proactively to prevent social gaming opera-
tors circumventing all requirements applicable to lotteries and other
legal gambling operators while, at the same time, creating and boost-
ing the behaviours that legal lottery operators are currently fighting
against and trying to limit.
■
