46% of UK kids engage in game-related 'Skins Betting' - report

Gambling with in-game intems

The UK Gambling Commission’s 2017 report found that 11% of 11-16-year-olds in the UK have engaged in skins gambling--betting on esport matches using in-game items.

The UK Gambling Commission produces annual reports of gambling activity for different age groups in the UK. For 2017, it added a section on skins betting to the online gambling portion of its report. Skins betting refers specifically to the use of in-game items (typically weapon or character skins) as currency to bet on the outcome of game matches. These bets occur on third-party websites and the winnings can be money or more valuable skins.
The commission’s 2017 report for young people (11-16-year-olds) found that 11% of respondents had engaged in skins betting. The prevalence of skins betting increased with age, going from 3%, for 11-year-olds, to 14%, for 14-16 year olds. It was more prevalent among boys, with 20% having done it, compared to girls at only 3%. Overall, 45% of UK 11-16-year-olds were aware of skins betting. The report also found that respondents who engaged in other forms of gambling were more likely to engage in skins betting.

It should be noted that skins betting, which the UK Gambling Commission formally recognizes as a form of gambling, doesn’t directly implicate loot boxes in the current loot-box gambling controversy. We previously reported that the UK Gambling Commission had said that loot boxes do not constitute gambling unless the in-game items can be easily convertible to currency. This holds true for many games which have been mentioned in the issue, such as Overwatch and Star Wars Battlefront II. Though players can purchase loot boxes in these games (no longer in the case of Star Wars Battlefront II), the items received can’t be traded.

For CS:GO, the game at the forefront of skins betting, it’s a different story. Players can receive random skins through play, but they can also receive loot boxes that the player then has to pay to open. The fact that the skins gained from the loot boxes can be traded and sold (or used to bet with), should fall under the definition of gambling. Though we’ve seen actions to limit skins betting, such as the Washington Gambling Commission's 2016 directive to Valve to crack down on skin traders, we’ve so far avoided any direct regulation of loot box sales or in-game item trading.

However, recent developments might be changing that soon. Hawaiian legislators have already begun discussing regulations regarding purchasable loot boxes, which many think take advantage of people with gambling addictions. The issue being discussed by them isn’t the use of in-game items for gambling but the addictive nature of opening loot boxes, which can cause children to overspend. The New Zealand Gambling Commission is the latest to weigh in this issue, though it says that it does not currently consider loot boxes as gambling.