Novel Products
It’s gambling, but not as we know it Blockchain technology is opening up new opportunities in gaming and gambling but causing a headache for regulators who must grapple with a raft of novel products. Phil Savage asks where the market is headed and what regulators are doing to prepare for it.
T he audience at this spring’s calendar of industry conferences have been treated to various presenters and panellists, and especially regulators, wondering aloud what the next big challenge in gaming will be. What is it that is keeping them awake at night and what are the clouds on the horizon that they are watching most closely? However the question is posed, the most common answer has been ‘novel products’. In broad terms, these are products which, until now, have not been considered gambling products but which, for one reason or another, are now attracting regulators’ attention. The example of this trend that we are perhaps most familiar with is the addition of a loot box mechanic to a video game. This tweak to the game producer’s business model adds chance and financial elements to an entertainment product. Depending on local market definitions, this may mean that a previously unregulated game acquires sufficient gambling characteristics to mean it falls within the regulated market. The regulators musing on these novel products were, for
the most part, thinking about their workload: what would be the size and shape of a gaming regulator if they had a large number of new products to regulate? This, however, is not the only implication. “Gamblification” of entertainment products could bring about a public backlash particularly if it exposes players to the risk of fraud. The proliferation of gambling products or gambling characteristics in entertainment products could cannibalize sales of existing products (spoiler alert – it probably won’t). Finally, it could bring gambling to minors or to markets where it is culturally sensitive: a kind of gambling by the back door. We should, of course, declare an interest. It goes without saying that the new challenges for gaming regulators are going to be of interest to gaming lawyers. Bringing new verticals, products or segments within the scope of regulation swells the size of the regulated market and potentially increases the number of players that will require the services of gaming lawyers. So, with that incentive in mind, we will explore three novel products which may in future come under the auspices of gambling regulators.
IMGL Magazine • July 2022 • 21
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