Casinofied Video Games for Kids: Gambling Gateways or Innocent Fun?

Casinofied Video Games for Kids: Gambling Gateways or Innocent Fun?

Casinofied Video Games for Kids: Gambling Gateways or Innocent Fun?

1000 648 David Hoppe

Digital gaming technologies have become a normal part of people’s lives in various settings, including home, school, and social domains. These games, often accessible through social media platforms, offer a simulated casino experience without involving real money. While some view these games as harmless entertainment, others raise concerns about potential addictive traits associated with adolescent engagement with casino-like games. As real-money gaming becomes more prominent and accessible, stakeholders are examining whether “casinofication” of gameplay affects adolescents’ involvement in social games and whether elevated participation is just harmless fun or a cause for concern. What does this mean for game developers and platforms offering real-money games aimed at adults?

  • Incentivizing user participation and engagement
  • Facilitating decentralized governance and decision-making
  • Enabling new revenue streams and business models
  • Fostering community building and loyalty
  • Attracting funding for operating and capital investments

When Do Video Games Cross the Line?

A video game is broadly defined as an interactive, playable form of digital entertainment requiring strategic and skillful play. Video games vary in genre, platforms, modes, online connectivity, and in-game objectives. Developers design their games to be engaging and rewarding by leveraging behavioral psychology and neuroscience to maximize enjoyment and replayability. Random reward schedules, clear goals, adaptive difficulty, and social engagement techniques may hook players but usually cause no harm when the games are played in moderation.

The gaming industry undergoes constant changes due to innovations in product design, gaming hardware, and online infrastructure. Social casino games (SCGs), on the other hand, resemble traditional gambling but use virtual currency without real-world value. These games simulate traditional casino activities like slot machines, poker, and roulette but operate on a play-for-fun basis. When games closely simulate gambling activities, they can activate the same neurological pathways and potentially enable problematic behavior. So when does a video game cross the ethical line?

SCGs often follow a “freemium” model, allowing free access with optional microtransactions for in-game benefits. The use of simulated gambling mechanics like slot machines, roulette, craps, or card games. The presence of these casino-style games, even without real money at stake, could habituate players to gambling activities. Another concern is the inclusion of wagering, betting, or other risk-taking mechanics that leverage a player’s virtual resources. Some games offer the chance to risk in-game currency, items, or progress on the outcome of random events. These chance-based gameplay elements directly mirror gambling and can trigger its addictive potential. In one 2018 study, poker was the most popular SCG among adolescents, followed by slot machines and SCGs on Facebook. However, even games that involve virtual goods like weapons or character upgrades that can be obtained through chance can be considered SCGs.

SCGs are growing in popularity, with millions of monthly and daily players. Adolescents, in particular, show substantial exposure to and interest in SCGs. According to the NSW Youth Gambling Study 2020, approximately 40% of young people play video games that incorporate gambling components, including loot boxes, gacha systems, and other mechanics involving real-money microtransactions. Adolescents are drawn to the flashy graphics, interactive features, and the social aspect of competing with friends.

Harmless Fun or Potential Addiction?

Critics argue that the line between harmless fun and potential addiction becomes blurred, especially considering the age group involved. Adolescents are at a stage of development where their brains are more susceptible to rewards and peer influence. The constant reinforcement and rewards within social casino games can create a psychological impact, potentially leading to addictive behaviors. But what does the science say about adolescent gambling tendencies after playing social casino games?

Studies suggest a connection between adolescent SCG players and later engagement in monetary gambling. Early exposure to gambling activities, including SCGs, is considered a risk factor for the development of problem gambling. One study involving 10,035 adolescents in three Canadian provinces found that among the adolescents engaged in various forms of SCG, a small proportion showed symptoms of low-to-moderate or high-problem gambling severity. Overall, SCG players had a higher prevalence of low-to-moderate or high-problem gambling severity compared to nonplayers across different SCG types. This means that SCG players, across all types, had a higher proportion of individuals exhibiting signs of problem gambling compared to nonplayers. A 2020 study of the Australian youth population confirmed those findings.

Although SCG use early in life has been shown to correlate with problem gambling in the future for some study participants, researchers also found associations between SCG play and indicators of socioeconomic status, peer influence, and sedentary behavior. In other words, problem gambling is a risk among young people who adopt a particular lifestyle within a certain social group. The same can be said for any risky behavior, such as problem drinking or drug use. So, despite all of the warnings out there flagging the risk of teen gambling, do in-game purchases and SCGs push adolescents down a road that they would not be drawn down anyway by other pressures? The answer to this question requires a deeper look at hardcore gamers who spend excessive time on free-to-play browser games.

Responsible Real-Money Games: Part of the Solution

Real-money game developers and platforms should strive for transparency and thoughtful design to mitigate the unintended consequences of mechanics that drive gameplay beyond engagement and into the realm of addiction. By being mindful of how design decisions affect vulnerable players, stakeholders can maximize enjoyment while minimizing harm.

  • Session Limits: Long play sessions or highly unpredictable reward timing can increase habit formation. Moderating these factors may retain the fun while reducing addictive potential.
  • Ratings and Age Guidelines: Targeted age ratings and restrictions also help caution parents and guardians. Adolescent-directed games incorporating simulated gambling should indicate this content and recommend adult supervision for young players. Platforms should also consider age-gating games with these mechanics. Making gambling-themed games accessible only to adult accounts mirrors real-world casino age limits and demonstrates corporate responsibility.
  • Odds Transparency: Disclosing the probabilities of winning prizes in loot boxes or gacha also enables informed decisions, as obscured odds facilitate overspending.
  • Organic Rewards: Providing a reasonable balance of challenge, incentive, and reward rather than promoting paid paths around progress blockers would eliminate the player frustrations that lead them to spend beyond their means.

While no single recommendation fits all circumstances and contexts, engaging with an experienced real-money gaming lawyer can ensure conscientious development practices focused on player well-being and an ethical gaming landscape.

In-Game Purchases and Adolescent Financial Literacy

While social casino games may not involve real money, any in-game option to buy virtual currency or additional features introduces a financial element. This raises questions about the financial literacy of adolescents and the potential risks associated with such transactions, as well as young people’s abilities to moderate their social gaming.

Adolescents often engage in social casino games due to peer pressure or fear of missing out . The desire to fit in can drive adolescents to spend more time and money on these games than intended.

Aggressive monetization tactics aimed at young players face increasing legal and regulatory scrutiny. Several jurisdictions now prohibit or restrict features like loot boxes which are akin to gambling. The United Kingdom specifically bans the sale of lottery tickets or gambling activities to those under 18. Knowingly exposing minors to simulated gambling also raises ethical concerns.

Class action lawsuits allege that companies like Epic Games deliberately designed Fortnite to be addictive, particularly its randomized reward mechanics. This underscores the necessity for responsible game development and limitations on youth exposure to potentially exploitative experiences. Strict age verification and parental controls may become a legal obligation.

Ultimately, moderation and ethical practices are in the gaming industry’s best interest. With emerging research on gaming disorder and the impressionability of young minds, companies must consider the real-world impacts of their monetization strategies. Proactive steps to promote adolescent health and safety will build community trust and prevent harsher gambling-related regulations down the road.

Conclusion

While simulated gambling mechanics are not inherently unethical, their potential risks require thoughtful implementation, especially regarding adolescents. Well-intentioned developers may inadvertently create experiences that enable harmful behaviors in young players.

This is where regulatory legal counsel can guide conscientious game makers. Experienced gaming attorneys help clients navigate evolving regulations across jurisdictions. They advise on features or monetization strategies that could be construed as youth-targeted gambling. Lawyers versed in real-money gaming compliance ensure proper age gates, parental controls, and transparency around odds.

Proactive legal review prevents issues down the road. It steers developers away from legally dubious areas that could jeopardize their studio’s reputation. Ongoing counsel helps spot emerging best practices and get ahead of regulatory shifts.

Most importantly, responsible gaming lawyers keep the human impacts at the forefront. They remind innovators of their ethical duty to avoid exploiting vulnerable players for profit. Collaborating with counsel shows investors and the public that player well-being is a priority.

By partnering with experts in real-money gaming law, creators can focus on delivering magical play experiences that bring joy, not harm. With care and conscience, we can foster a thriving industry where young and old alike can game safely.


Gamma Law is a San Francisco-based Web3 firm supporting select clients in complex and cutting-edge business sectors. We provide our clients with the legal counsel and representation they need to succeed in dynamic business environments, push the boundaries of innovation, and achieve their business objectives, both in the U.S. and internationally. Contact us today to discuss your business needs.

Author

David Hoppe

All stories by: David Hoppe

Subscribe to Gamma Law's
Monthly News & Insights