Social gaming and gambling advertising, how to deal with them?

The requalification of a social gaming platform as gambling can lead to criminal sanctions

Social gaming can be a relevant source of revenues after the Italian gambling advertising ban, but there are regulatory restrictions that need to be considered. 

I had discussed in the past about social gaming platforms and the applicable regime, but since it is becoming (again) a hot topic, especially after the Italian gambling advertising ban, below are the most relevant questions that I have been responding during these days:

1. What license is needed for a social gaming platform?

No license is necessary for most of the countries, including Italy, since social gaming is not gambling. However, as covered in this blog post Social gaming and gambling, a thin difference that might be risky, there is a “thin” line between social gaming and gambling, and it is necessary to ensure that it is not crossed.

2. Is it unregulated?

No, social gaming still needs to comply with stringent consumer and eCommerce regulations that will considerably increase with the new package of EU legislation named the “New Deal for Consumers” that will provide higher fines and collective consumers’ actions. You can read on the topic Fines and enforcement actions change with the New Deal for Consumers and “Consumers, engagez-vous!”: The draft Directive on Consumers’ Collective Actions.

3. Has it to be free?

No, social gaming can provide for a payment by players. But, the payment needs to be for the service received, e.g., the license on the gaming software. The proper drafting of Ts&Cs of a platform is crucial for its appropriate qualification.

4. Can players win anything?

As provided by DLA Piper free summary of Prize promotions laws of the World, the scenario is quite different on the matter depending on the relevant country. Players cannot get their winnings out of the game, but in some countries can win for instance prizes in kind. Italian laws on prize promotions are quite complex, and their breach can lead to significant fines. You can read on the topic International online prize promotions get the green light in Italy? and € 3+ million sanction issued for unlawful prize promotions in Italy.

5. Are social gaming platforms subject to the Italian gambling advertising ban?

No, since social gaming is not gambling because it does not provide prizes in cash. However, the platform shall be arranged correctly to avoid that this is considered as “indirect” advertising of a gambling platform, which is a practice also prohibited under the new Italian laws on gambling advertising. You can read on the topic Italian gambling advertising guidelines adopted, and now what?

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Giulio Coraggio

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our clients' success.

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