Australian Parliament investigates video game gambling

The Inquiry into online gambling and its impacts on problem gamblers, which is accepting submissions through 11 November, has been convened by the House of Representatives Standing Committee on Social Policy and Legal Affairs (SPLA) with an eye to evaluate existing consumer protections aimed at reducing online problem gambling, counselling and support services, access to online gambling education programs, and more.

Its terms of reference include an exploration of whether new low-touch payment options – recent years have seen a surge in use of in-app purchases, cryptocurrency, email-based transfers, and the like – are suitably addressed by current regulations such as the recently-updated ePayments Code.

The inquiry will also explore the “appropriateness” of the Interactive Gambling Act 2001’s definition of ‘gambling service’ and whether changes are required to address gambling-like activities in video games, including loot boxes and social casino games.

Last year, researchers concluded that loot boxes – purchasable video game content that provides randomised prizes – “are structurally and psychologically akin to gambling”, with GambleAware research into over 14,000 UK gamers linking their use to young, lower-educated males.

The new Australian enquiry will follow the lead of the UK’s Gambling Law Review, which was launched in 2020 and produced a white paper that has been repeatedly delayed – raising the concerns of social welfare advocates concerned about gambling-related harm both online and off.

The new inquiry “will be a fresh look at online gambling and whether current laws, regulations, consumer protections and education and support programs are enough to reduce harm to gamblers,” SPLA Chair Peta Murphy said in launching the new inquiry.

“The committee is concerned about the increasing reach of online gambling platforms into Australians’ lives, the exposure of children and young people to gambling advertising and how this may contribute to increases in problem gambling in the future.”

Counting the cost of online gambling

Gambling is big business – analysts estimate a global market worth $1.26 trillion ($US876 billion) by 2026 – and official American Gaming Association statistics noted that gamblers in that country alone spend over $20 billion ($US14.3 billion) on casino games, sports betting, and online gaming (‘iGaming’) during the first quarter of this year alone.

That was the sector’s best start to a year ever and a surging start for online gaming, with iGaming revenues alone jumped 53.9 per cent year-on-year – generating $1.75 billion ($US1.21 billion) in quarterly revenues from just six US states as that country’s online gaming industry explodes.

Australia has long regulated online gambling and interactive gambling providers must be licensed to operate legally in the country – mirroring tight controls on controversial sports gambling saturation advertising – but the surge in gaming-related in-app purchases has created a legal grey area.

Changes to Apple’s App Store pricing structure have made it hard to track how much money the company makes from in-app purchases, but recent estimates suggest that the average price of such purchases has increased by 40 per cent since last year – compared with a 9 per cent increase for Google Play in-app purchases.

With overall App Store spending surging through the pandemic – and increasing by 17.7 per cent to reach $123 billion (US$85.1 billion) in 2021 alone – in-app purchases are a massive revenue stream for the company.

Apple has previously introduced controls on online gambling apps including requiring them to be mobile-native apps – an approach that prevents developers from circumventing age, payment, and other restrictions – and requiring developers to slap an adults-only label on apps that feature even simulated gambling.