New laws needed to regulate ‘novel’ gambling products such as loot boxes in video games: Josephine Teo
SINGAPORE: Regulators around the world need to figure out how to regulate “novel” gambling products such as loot boxes in video games that are designed to appeal to younger audiences, said Second Minister for Home Affairs Josephine Teo on Thursday (Aug 29).
Speaking at the 5th Singapore Symposium on Gambling Regulation and Crime, Mrs Teo noted how gambling preferences have changed, with the younger generation less interested in traditional gambling products such as jackpot machines and horse-racing.
To attract this demographic, companies have developed “novel products” such as loot boxes, which are virtual mystery boxes gamers buy in the hope of gaining powerful weapons or skins to enhance the game experience.
Others have reinvented traditional gambling products and added skills-based elements in an effort to have them resemble computer gaming products, the minister said, citing slot machines with joysticks or other features that allow users to make choices during the game.
“Such new products across various modes of gambling or gaming will certainly require us to put on our thinking hats, and probably take a look at the new laws we need to put in place to regulate,” said Mrs Teo, who is also Manpower Minister.
“Regulators and law enforcement agencies need to keep up to date with these developments and make sure our policies and rules remain effective,” she added.
During her speech, Mrs Teo also spoke about the challenges regulators face because of online technology.
“Everyone now has a smartphone with mobile broadband access. From their smartphones, punters can access gambling products anywhere, anytime,” she said.
Citing figures from PwC, Mrs Teo noted how global remote gambling revenue has grown 10 per cent annually from 2009 to 2016, almost doubling the revenue to US$39 billion.
In Singapore, online gambling has also risen, said Mrs Teo.
About 60 per cent of Singapore Pools’ sports betting turnover is now done through remote channels - double that of the 30 per cent seen three years ago, she noted, adding this trend is expected to continue.
Singapore Pools and the Singapore Turf Club were the only two operators allowed to run online betting services after the introduction of the Remote Gambling Act in 2016, which bans all online and phone betting activities.
In turn, the two organisations have to implement various social safeguards such as ensuring that only those aged 21 and above can open player accounts and that they do not gamble on credit.
Singapore Pools had announced it was taking over Singapore Turf Club's horse-betting services, including remote betting, last October.
NEW IDEAS TO PROMOTE RESPONSIBLE GAMBLING
In addition to the challenges mentioned above, Mrs Teo said there are several areas in which gambling regulators in Singapore and its global counterparts can learn from one another.
The first area is in improving responsible gambling, which is “critical” for mitigating the risk of problem gambling, said Mrs Teo.
She cited several innovative initiatives by the Massachusetts Gaming Commission, including a PlayMyWay tool that allows customers to set their gambling budget.
This is something done here as well, she noted, saying that individuals who gamble online with Singapore Pools are required to set their expenditure and loss limits.
Additionally, authorities are working closely with casinos here to implement measures to help gamblers make informed choices, said Mrs Teo. Some measures being studied include providing people with notifications on amount and time spent in the casinos, she added.
The second area is on law and order concerns, particularly money laundering and terrorism financing, the minister said.
While regulators have put in place strict controls to manage law and order concerns related to gambling operations and prevent infiltration of criminal elements, more can still be done, such as making better use of data.
The French Online Gaming Regulatory Authority, she pointed out, uses data to detect money laundering, match fixing and study players’ behaviour.
Similarly, the Casino Regulatory Authority (CRA) is exploring how data analytics can be used to understand the risk profiles of patrons and identify those who pose regulatory risks, the minister said.
“Such insights can be used to support policy development and enhance CRA’s risk management,” Mrs Teo said.