Gamification of Gambling: Blurring the Lines Between Gaming and Gambling

Gamification of Gambling: Introduction to the New Era of Gambling

The notion of gambling is for many people linked to the glamorous casinos of Monte-Carlo, Las Vegas, and Macao. However, the introduction of remote gambling in the last decade has profoundly reshaped the gambling industry. Where traditionally players would enjoy a night out at a casino, playing live games such as poker or roulette or try their luck at a slot machine, all of these casino games are now offered through digital means. Hence, players can try their luck from the comfort of their own sofa. Though remote gambling has become mainstream over the last years, the needs of players are developing. Simple online slot machines and casino games do not sufficiently engage the player like traditional videogames do, through means of storytelling and character development. In order to suit the needs of the modern player, casino games developers are including evermore elements of traditional videogames in casino games. This development may, however, pose a problem for regulators, as the dividing line between video games and games of chance is fading. So, when does gaming become gambling?

Defining Games of Chance in the Legal Framework

In order to answer this question, one must first establish a clearcut definition of games of chance. As described in a recent article, the European legislator has opted to leave the regulation of (online) gambling to the discretion of the member states. As a result, there is no uniform definition of what constitutes a game of chance. Nevertheless, from the case law of the European courts, it may be concluded that a game qualifies as a game of chance when the player is offered, in return for a payment specifically intended to represent consideration for their use, the prospect of winning a sum of money, whereby the outcome of that game is decided by an element of luck (case C-124/97 – Läärä & Others). When looking at the gambling acts of different member states a very similar definition can be found. Article 1(1)(a) of the Dutch Gambling Act (Wet op de kansspelen) qualifies games of chance as any game in which the player participates in the chance to win a prize and the outcome of that game is predominantly or entirely determined by chance or luck. The Dutch legislator thus does not require the player to offer any consideration for the prospect of winning a prize. The German Interstate Treaty on Gambling defines games of chance as games where payment of consideration is required in order to acquire a chance to win and the determination of winnings is entirely or predominantly a matter of chance.

The Evolving Nature of Video Games: From Skill to Chance?

Videogames, on the other hand, traditionally qualify as a game of skill. As the name suggests, a game qualifies as a game of skill if the outcome is predominantly dependent on the skill of the participant. Though the difference between these two types of games may seem perfectly clear, regulators and courts across the EU have been struggling when applying these definitions in practice. Poker is a prime example of a game that includes both elements of chance and skill. For the ordinary player, poker will be a game of chance, as the player cannot exert a deciding influence over the game. For professional players, however, poker involves more elements of a game of skill. Whether poker actually qualifies as a game of chance or a game of skill has been heavily debated in front of court. The Dutch supreme court decided in 1998, however, that poker qualifies as a game of chance as most players cannot influence the outcome of the game (ECLI:NL:PHR:1998:ZD0952). The deciding factor is thus how the game is played by the average man.

The Rise of Loot Boxes: A Regulatory Challenge

The videogames industry has recently also posed regulators and courts with questions regarding this topic. In multiple European member states, gambling regulators have tried to tackle loot boxes in videogames by claiming that they are games of chance. Loot boxes are a prevalent video game monetization method, allowing players to spend real money to obtain random digital items, such as weapons and outfits. The player cannot exert any influence on the content of such loot boxes, leading to a rallying call of regulators to qualify them as a game of chance. Surprisingly, the courts of various member states have rendered rather varying verdicts when faced with this question. The Dutch Council of State, the highest administrative court, argued that loot boxes are not a game of chance, as the videogame as a whole, of which the loot boxes are merely an element, must be taken into consideration (ECLI:NL:RVS:2022:690). A recent article by Leonid Shmatenko gave an insight into radically different judgments rendered by German and Austrian courts.

Gamification of Gambling – Online Casino Games: A New Trend

However, besides elements of games of chance entering the realm of videogames, gaming elements are now being integrated into online casino games. In a bid to offer players a more captivating experience, new lines of casino games offer players more control over the gameplay and include elements of storytelling. In other words, online casino games are rapidly being gamified in order to achieve a competitive edge over the traditional casino games. These elements of gamification include, amongst other things, customizable characters, unlockable content (such as skins), online tournaments, leaderboards, and more gameplay options. Depending on the degree of gamification of a casino game, the game may include more elements of a game of skill rather than a game of chance. The boundary between games of chance and games of skill is therefore fading rapidly.

Regulatory Challenges and the Future of Gambling Laws

This development is posing regulators with yet another problem. If players can exert evermore influence over the gameplay and thus the outcome of casino games, will these games fall within the scope of application of the various gambling regulations? As mentioned before, most EU member states have implemented a definition of games of chance that requires that the outcome of the game is decided entirely or predominantly by elements of chance or luck. As a result, gamified casino games may fall outside the scope of gambling regulations, with all the ensuing consequences. Gaming regulation namely seeks to protect players from the hazards of engaging in games of chance.

Conclusion: Navigating the Legal Vacuum in iGaming

The aforementioned leads me to conclude that the current definition of games of chance has become outdated and does not cater for the current developments in the igaming industry. Though thus far there have been no cases on record in which the court has had to deal with this legal vacuum, this will likely be a matter of time. Though the gamification of igaming may have created a legal vacuum, this does not necessarily mean that regulators and legislators have to scramble to introduce new regulations to deal with this development. A holistic interpretation of the current definitions may suffice for the time being.

For example, in the aforementioned judgement of the Dutch Council of State regarding loot boxes, the court took a holistic approach when deciding whether loot boxes qualify as a game of chance, taking the whole videogame into account. This reasoning may be applied analogously to gamified online casino games. When taking into account the whole environment in which gamified casino games are played, one may conclude that the average players will play these as a game of chance rather than a game of skill, therefore falling into the scope of gambling regulations.

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