We have been advising several social gaming operators on their European expansion and therefore have got to know the position on social gaming under several jurisdictions. And through such reviews, it is interesting to see that the issue that always arises as to the qualification of social gaming pertains on what can be deemed to be "monetary value".

We already covered in the past the potential liabilities arising from the re-qualification of social games in Italy, but did not focus on what is meant as monetary value. Indeed, the issue arises with reference of social games where players are requested to purchase virtual currency to be wagered on the games available on the platform. Under such scenario, in most of the cases players can only win further virtual money and are restricted from withdrawing it, purchasing items through them and transferring them to other players.

As a consequence, players can only continue playing on the platform with their virtual money. It might be argued that they paid for the initial amount of virtual money (unless this was granted for free to them), but it may be also argued that if I put a coin in a videogame in an arcade and I am so good to win some additional lifes/credits during the game, I would face the same scenario of those how win virtual currency!

Indeed, I paid to play and I can only get the possibility to play some more. I remember a comment from a representative of the UK gambling commission at the last EiG where he stressed that their position at that time was to consider the parameter for the qualification of a game as "social" rather than gambling if players were not able to get the money out of the game.

This might be a quite strong position, but if the money cannot even be exchanged for anything or transferred to anyone, is it really possible to argue that they have any value in the real world?

What is your view on the above? Feel free to contact me, Giulio Coraggio (giulio.coraggio@dlapiper.com), to discuss.

Posted by Giulio Coraggio on Thursday 30 May 2013