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Unwrapping the Rise in Underage Gambling in the UK 

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The gambling industry in the United Kingdom has taken shape rather nicely, bolstered due in no small part to the increased penetration of the Internet and the stability of the country’s laws. 

The UK Gambling Commission reported earlier this year that the gambling industry earned £14.4 billion (about $18.88 billion) in total gross gambling yield between April 2018 and March 2019, while there are 2,689 operators licensed to provide services to gamblers across its territory (a 4.6 percent increase over the previous year).

The online gambling sector has thrived so far, providing gamblers with instant access to their favorite gaming platforms, allowing them to place bets from the comfort of their homes.

British Children are Gambling En Masse  

Unfortunately, the rise in gambling activity has also caused an increase in childhood gambling. 

Recently, GambleAware, an organization that helps to recuperate addicted gamblers and those with gambling-related issues, collaborated with the University of Bristol to conduct a study into gambling behavior and how younger people get in on the action.

The study, which was titled “Children of the 90s,” looked into the gambling trends in millennials and Gen Zers, and collected data from about 14,000 people in this age group. 

  • It established, among other things, that over 50 percent of all 17-year-olds currently living in the United Kingdom are participating in some form of gambling activity.
  • 54 percent of people within that age bracket have engaged in a gambling activity within the past year.
  • That’s quite unsettling as the official gambling age in the UK is 18 years.

A separate survey from the Gambling Commission last year also revealed that up to 450,000 children between the ages of 11 and 16 are regular betters. This figure is said to dwarf the number of children in the same age group who drink, smoke, and use drugs.   

The Sins of the Father, and Efforts of Gaming Operators  

Hoping to provide some context into its statistics, the GambleAware survey also found significant connections between parents and children when it comes to gambling activity. The organization argues that individuals who grew up with gambling parents have a higher propensity to pick the activity up themselves- and at an early age, too.   

Of course, this problem isn’t just confined to the parents and their “ability” to pass on the gambling trait to their children. Gaming operators have also been enticing kids to gamble using deceptive ads. 

In January 2018, the Campaign for Fairer Gambling was reported to have sent a complaint to the Advertising Standards Association (ASA), charging four gambling operators- M88, 138.com, Fun88, and Letou- of publishing advertising material that was targeted at children. As the Campaign notes, these operators run online casino websites, with sections of those games featuring cartoon characters that many children could find attractive. 

Video Game Loot Boxes Take the Heat 

When it comes to the UK, however, there seems to be nothing that draws children to gambling like loot boxes. Loot boxes are essentially digital grab bags that players will need to spend money on. That money could be in-game currency or actual cash, and the rationale is that the only way to find what’s inside the box is to pay for it and check its content out. 

Different games place different rewards inside their loot boxes, so game manufacturers can keep that excitement up. 

Loot boxes were made especially famous when they became a part of free-to-play games. These games rely on transactions to draw in revenue, and developers use innovative restrictions to get players invested in the “microtransactions” that make the game more fun. 

Fortnite
Fortnite is one game criticized for use of Loot boxes

Today, however, they’ve become a stable in games; PC offerings, consoles, and Internet games all provide loot boxes now, with players using real cash or in-game currency to unlock characters, features, tools, avatars, and more. 

Their profitability is also evident. Last year, tech analysis firm Juniper Research estimated in a report that video gamers will be spending up to £34 billion (worth about $44.44 billion today) on loot boxes by 2022. 

Earlier this year, the University of York led research into loot boxes and their prevalence in video games, noting that their presence in video games has increased from 4 percent to 71 percent of video games over a decade. 

As the report noted, loot boxes have been included in all of the 463 top games on digital marketplace Steam between 2010 and 2019, while microtransactions had also surged from 8 percent to 81 percent in that time. 

The University further called on the UK Gambling Commission to restrict the use of these boxes in the country, pointing to the fact that they tend to contain a risk-reward factor that could make it easier for suggestible children to get into gambling. 

“Spending money on loot boxes is linked to problem gambling. The more money people spend on loot boxes, the more severe their problem gambling is. This isn’t just my research; it’s is an effect that has been replicated numerous times across the world by multiple independent labs,” lead researcher Dr. David Zendle said.

Gambling Commission to Classify Loot Boxes as Gambling?

Several people have also called or these loot boxes to be curbed, claiming that their operation is doing much underlying harm to children. In September 2019, Carolyn Harris, the Chairperson of the all-party parliamentary group on gambling-related harm in the last parliament, called for these video game components to be restricted and tightly regulated by the Gambling Commission. 

“They’re grooming children to normalize gambling activity by encouraging speculative transactions where you don’t know what you’re going to get,” she said in part.

It’s tough to decide whether it’s fair to place all the blame on loot boxes. On one hand, they’re a part of online gaming, and have been a part for years. On the flip side, their rise and increase in prominence coincided with a time when childhood gambling spiked, and the fact that there is a risk-reward factor involved in their operation incriminates them.

Noticeably, this risk-reward factor is the same thing that every loot box detractor points to when criticizing them. One thing is certain, underage gambling continues to rise, and regulators need to take off the gloves to curb the epidemic.

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works. Contact him at Jimmy@beanstalk.io

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