Skin Betting Gets Attention of Denmark’s Regulators as Illegal Sites Are Blocked

Posted on: April 7, 2019, 02:00h. 

Last updated on: April 6, 2019, 07:28h.

Ed Silverstein @casinoorgedsilv Read More
Expertise: Legal, Tribal Gaming.

Denmark is cracking down on skin betting — which is gambling with virtual goods — with illegal sites getting shut down out of concern for teenagers and children.

Copenhagen is a picturesque city in Denmark but it is also dealing with illegal online gambling such as skin betting. (Image: The Intrepid Guide)

Last month, a court in Copenhagen approved the government’s request for telecom companies to block 25 unlicensed online sites. Ten of these had casino games or sports betting, and 15 offered skin betting.

Skins are coverings found in video or internet games, and sometimes start as video games but suddenly turn into gambling, according to gambling abuse experts.

“Might be the look of armor, a weapon or even a background,” explained Dr. James P. Whelan, a professor and co-director at the University of Memphis’ Institute for Gambling Education and Research.

The skins or covers can be simple or flashy,” Whelan told Casino.org, adding that “a player wagers something of value in order to have a chance or a better chance of winning such a covering…. It is basically gambling while gaming.”

Dr. Jeffrey L. Derevensky, who is director of the International Centre for Youth Gambling Problems and High-risk Behaviours at Canada’s McGill University, further told Casino.org that skins “have no direct influence on game play” but have become “a form of virtual currency.

“Certain skins became highly sought-after by players…. Unfortunately, many of the ‘best’ items are difficult to obtain, thereby raising their value.”

Danish regulators were particularly concerned that skin sites “often target children and adolescents under the age of 18,” Birgitte Sand, director of the Danish Gambling Authority, said in a statement released this week.

“The items won, typically modified weapons — guns or knives — within a video game can often be bought and/or sold — and turned back into real money,” Derevensky said.

This is the second time in the last year the Danish regulator went to court to block skin betting sites. In February 2018, six such websites were blocked.

In the last year, the authority adopted a new strategy that officials say is more successful in finding the sites.

Denmark Regulators Outsmart Skin Betting Sites

Skin betting sites have sometimes circumvented regulators, and that tends “to complicate our work of documenting and blocking,” Sand says. But the authority more recently has used WebCrawler to successfully search for the sites.

Sand explains that the ongoing blocking of illegal sites protects both licensed operators and players.

Last year, the regulator also closed four Facebook groups that provided illegal gambling.

Officials say that since 2012 there has been a decline in the number of websites that target Denmark with illegal gambling, according to a recent authority report.

The authority admits it has ongoing “challenges” with websites that carry “illegal marketing and promotion of gambling sites” as well as with skin betting and illegal gambling on Facebook.

The authority also notes almost all illegal skin betting websites use the platform Steam for users to login.

Overall, gross gaming revenue (GGR) from legal online operations has been on the rise in Denmark. In the last quarter of 2018, online casinos saw DKK 554.9 million (US $83.4 million) in GGR which is 15.8 percent higher than the Q4 of 2017. These percentages follow the basic “upwards trend seen since 2012,” according to the regulator’s reports.

Even back in 2017, Casino.org reported that Denmark’s gambling market continued to grow, especially with increased interest in sports betting and a healthy online casino market — and many users employing mobile devices.

Concern in United Kingdom

In the nearby United Kingdom, the Gambling Commission’s annual report, released last November, looked at skin betting for the first time.

Derevensky points out the UK commission says that cracking down on the industry is now a top priority.

In 2017, ESP.bet, operator of specialist esports fantasy league and betting website, eSportsPools, became the owner of what is believed to be the first-ever gaming license that covers skin-betting from the regulator for the UK’s Isle of Man.