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‘Crypto casinos’: a back door method for children to bet?

One of our bedrock principles is that ‘nobody under the age of 18 should be able to gamble on anything… full stop’, but Decentraland – a new convergence between ‘crypto’ currencies and online casinos -is giving cause for concern in that area.

Decentraland is described as ‘a 3D virtual world browser-based platform’ in which users may buy virtual plots of land in the platform as Non-Fungible Tokens (more commonly known as NFTs).

However, it is only possible to buy these NFTs via a MetaMask cryptocurrency wallet, which underage children can create with parental permission.

The outcome is that children are presented with an opportunity to buy crypto with their local currency, gamble it via the platform (via the transactions that take place over the virtual ‘land’) and then trade the winnings back into cash without the usual security and ID-related checks.

Cam Adair, our advisor and gaming consultant, has been closely monitoring the new developments and explains why they’re an issue that needs to be carefully monitored – and regulated.

“Crypto casinos hosted in the metaverse are a prominent frontier in the convergence between gaming and gambling which present significant concerns for young people to develop problem gambling and mental health issues,” he said.

“Frankly, the pace of innovation in gaming and gambling advances faster than awareness, education and regulation can keep up.

“Crypto casinos in Decentraland are simply the latest example of this. The platform is available to anyone over the age of 13 and is decentralised without a governing body for regulation oversight. The game provides the opportunity to gamble through cryptocurrency purchased using real money, which can be converted back to USD almost instantly once obtained.

“For young people, gambling in video games will often be their first earliest exposure to gambling and lead to more normalised gambling attitudes as well.”

Trading cryptocurrencies is strongly associated with problem gambling severity (Mills, Devin & Nower 2019) and also associated with risks for increased depression and anxiety (Mills, Devin & Nower 2019). There is also a heightened risk of social learning and reinforcement due to the strong presence of social media influencers and content within online gaming and gambling (Delfabbro & King, 2021), as seen with YouTuber Finn’s video on ‘Winning MONEY in CRYPTO CASINO‘ which follows a larger trend in online gambling content promoted by streamers on Twitch and YouTube over the past two years.

Parents are often unaware that games rated appropriate for children contain opportunities to gamble or extremely inappropriate sexual content. For example, a gaming industry report in August 2019 found only 32% of parents knew what a loot box was, and less than a third of them were able to select the proper definition, and this was after loot boxes – gambling-like mystery boxes in video games – had received widespread media attention for years.

To help parents, self-regulatory gaming boards introduced a notice for games containing loot boxes that stated the game “contains In-Game Purchases”, albeit without any reference to gambling-like risks.

However, Adair and EPIC share the view that education needs to go further.

“Without proper education or awareness, how can we expect parents to understand games rated appropriate for children contain such gambling risks?” he queries.

“To protect young people, education, awareness and policy changes are required, immediately. We need to better inform consumers through transparency and prevention programs.

“We need to prevent gambling-related problems through improved parental controls, age verification in the digital age and games like loot boxes or crypto casinos being regulated to individuals of legal age.

“We need to facilitate better treatment seeking and support individuals’ recovery and we need to increase the evidence base for best practices through research.”

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