UK Gambling Commission seeks to tighten esports gambling

The UK Gambling Commission is taking a renewed interest in esports betting, following the recent controversy surrounding sites such as CS:GO Lotto.

A new discussion paper published by the authority details a list of concerns about esports betting, including whether new legislation is needed to tighten up its legal status.

The UK already has comprehensive laws that govern how gambling, competitions and lottery-style contests work in the UK. Any organisation that allows UK residents to take part in such practices must have the appropriate license and abide by the rules.

But the recent emergence of esports gambling - and particularly the practice of betting using in-game items such as skins - has largely escaped regulation.

There are a number of reasons for this. The sites are relatively easy to set up, are shut down frequently and are therefore hard to police. Almost all are run from outside the UK and many attempt to avoid UK legislation by simply stating UK users should not play.

And then there's also the question of whether gambling using skins or virtual currencies rather than actual money can be controlled in the same way as traditional betting. (The UK Gambling Commission's view is that yes, it can).

"Where 'skins' are traded or are tradeable and can therefore act as a de facto virtual currency and facilities for gambling with those items are being offered, we consider that a licence is required," it wrote.

In fact, none of the above excuses count as exemptions for esports gambling under UK law, which is why the Gambling Commission is now stepping up its game to take them on.

The action comes after one site, CS:GO Lotto, hit the headlines when it transpired it was being run and promoted by two YouTube stars on the sly.

Neither Trevor "TmarTn" Martin or Tom "Syndicate" Cassell disclosed the fact they owned the site or earned money from it when showing it off as a get-rich-quick scheme to their audiences.

When this came to light, the conduct of other sites also came into question. Another YouTuber owned up to being secretly paid to promote a similar site named Steam Lotto.

Beyond the legal questions, many also questioned the moral irresponsibility of promoting gambling to a mostly-young YouTube audience.

"Taking action against those offering facilities for gambling without a licence has always been a priority. Taking action against anyone offering facilities for gambling to children and young people is a particularly high priority," the Gambling Commission wrote.

Valve has contacted numerous sites which use its Steam API to allow the gambling of in-game items and told their operates to cease, although it is unclear how much has really changed.

Some sites have been scared off, although others have continued regardless. Only a handful have said they will now attempt to operate withing the rules.

"To date the Commission has written to more than 100 unlicensed online gambling websites informing them that they should cease offering facilities for gambling to British customers," the Commission wrote. "A significant number of those websites were offering facilities for remote gambling of the kinds described above.

"The vast majority of those we have written to ceased offering facilities for gambling when they received our letter. A smaller number were the subject of payment blocking by payment providers and the remainder are the subject of ongoing enforcement activity."

Should the gambling sites continue to ignore its warnings, the Gambling Commission has said it has "a range of options, from issuing guidance to instigating criminal proceedings if people offer facilities for gambling without a licence or an exemption applying".

The Gambling Commission is now seeking a consensus on how it should act against these sites, before a final declaration of intent to be published this autumn.