Poll results: Narrow majority believes social should be regulated
52% of those polled claim that social gaming does need to be regulated.
Rumours of an investigation by the UK Gambling Commission into social gaming regulation prompted eGaming Review to ask whether the sector needed to be regulated.
Despite the Commission dismissing rumours that it was gearing up to expand the 2005 Gambling Act to bring social operators under its control, a narrow majority of readers believe that the sector is indeed in need of a regulatory framework, with 52% of those polled in favour of leglisation for the industry.
The rumours first emerged in a piece in UK newspaper The Mail on Sunday, in which the Commission’s corporate affairs manager John Travers described social as being “at the perimeter” of gambling legislation. The Mail cited player protection as being one of the key reasons for doing so, giving examples of a player who spent US$13,000 (£8,500) on an unnamed social gaming site over a three-month period, and had previously published an article about a 12 year-old boy who lost £7,000 playing online poker, having started playing the game on freeplay sites.
However, Plumbee founder and CEO Raf Keustermans (pictured) told eGR at the time that the inability to cash out essentially broke the cycle of addiction.
“Obviously that vicious cycle is broken if you have no cash-out. I’m not saying there is no potential issue where people overspend, but people do the same in Farmville, or even for hobbies like golfing,” he explained.
A growing number of social operators are emerging, using the Facebook platform to achieve economies of scale through being able to offer an universal product for all markets without having to cope with a fragmented regulatory map, similar to the online gambling industry, where companies have to invest heavily to ensure they are compliant with the various different legislative models.
As a result 48% of readers stated that social gaming does not need to be regulated, with Keustermans claiming that it could make operating in the sector “impossible”.
“The thing that scares me the most is the possibility of a fragmented market. The big advantage that the social gaming sector has, is that it is a global market, with companies operating one game working across all territories. This gives you economies of scale, working with a small team, with one centralised system and centralised host for the product.
“If we see what happened with the gambling industry it’s going to make that impossible; if countries all adopt their own individual models of regulation it becomes totally unsustainable,” he explained.
Oliver Crane, business development director of Barcelona-based affiliate marketing company Cmedia, which entered the social space with the launch of Soda Poker on Facebook, said that he did not believe that regulation was likely to happen soon:
“”I don’t really see this market being regulated on a global scale; we might see a few markets trying to regulate this, but I think we are years and years away from this being regulated on a global scale,” he said.
However, Crane also admitted that he was “starting to seriously consider regulation as something that could happen.”