Australians are sinking hundreds of millions of dollars into unregulated simulated casino games each year with no hope of a payout, which experts fear is creating future problem gamblers.
A federal parliamentary inquiry into online gambling is looking into whether simulated gambling, such as loot boxes and social casino games, should be included in the Interactive Gambling Act that banned online gambling in Australia.
Lightning Link Casino looks and sounds like Aristocrat’s poker machines.Credit:Steven Siewert
Inquiry chair Peta Murphy said some submissions have argued these types of games normalise gambling for young people and that there is evidence that the games can lead to harm.
“The committee is examining the appropriateness of the definition of ‘gambling service’ in the Interactive Gambling Act 2001, and whether it should be amended to capture additional gambling-like activities such as simulated gambling,” Murphy said.
This comes as both Labor and the Coalition have made the future of gambling a key issue ahead of the NSW state election.
Pokies simulator Lightning Link Casino has made more money than any other game in Australia almost every day for at least three years, according to app store analyst Sensor Tower. It is one of several free-to-play pokie simulators made by Aristocrat, the nation’s biggest poker machine manufacturer.
The app features the same games Aristocrat puts in pubs and clubs but uses fake money, which can be topped up with actual money. Players are systematically offered package deals to encourage spending.
Players cannot actually win money, allowing Aristocrat to keep the profits and avoid being classified as gambling.
Aristocrat told investors in November that players spent $US953 million ($1.4 billion) globally on in-game currency across its stable of social casino games in the previous financial year.
The Australian company now makes almost half its revenue from games with in-app purchases – including in different genres – where repeated play is encouraged by design. It has been investing heavily in its mobile game division Pixel United and spent $US480 million ($704 million) on user acquisition last financial year.
“There was reliable evidence that engaging in simulated gambling … was associated with experiencing gambling-related problems.”
Australians spent $80 million across the mobile casino-style game sector in the second quarter of 2022 alone, app store analyst Data.ai reported.
According to the Longitudinal Study of Australian Children, one in five adolescents aged 15 and 16 has played simulated gambling games, including casino table games.
Australian Gambling Research Centre executive manager Dr Rebecca Jenkinson said the apps can give users, especially teenagers, unrealistic expectations of winning when gambling.
“Social casino games really do look and sound like poker machines – when a win is recorded the screen lights up and the same sounds go off – but because the operators don’t have to pay out real money, these games are often programmed to give out more wins that real casinos,” Jenkinson said.
Lightning Link Casino replicates the games you know from Aristocrat poker machines.Credit:
“Evidence from our research has found a link between playing these games and harm, and the harms we’re observing are similar to what we’re seeing with gambling.”
Jenkinson said these types of features were deliberate design choices made to reinforce repeated play.
“There was reliable evidence that engaging in simulated gambling – but especially making some in-game purchases – was associated with experiencing gambling-related problems and being at risk of gambling-related harm … things like impact on relationships, work and study,” she said.
She said adolescents who played simulated gambling games were significantly more likely to gamble when they reached 18 years of age.
“We found a strong causal link between playing these games at 16 and 17 and gambling when they turn 18,” she said. “It wasn’t just kids playing any video game every day that might be a concern: it was this type of game.”
Players can buy an in-game currency package worth $US159.99 ($235).Credit:Lightning Link Casino
The chief executive of the International Social Games Association, the sector’s global representative body, Luc Delany, said social casino games could not be considered gambling.
“Social games, including social casino games, offer no opportunity to win money or anything of value,” Delaney said. “They are therefore clearly not gambling, they do not pose analogous risks and no research shows a causal link.
“For a decade, industry has established best practices, promotes consumer education and contributes to ongoing research.”
Aristocrat declined to comment and referred questions to the ISGA. While online gambling is not permitted in Australia, Aristocrat chief executive Trevor Croker told investors in Sydney last week that it has made significant progress in developing online real money gaming overseas.
Professor Sally Gainsbury, the director of Sydney University’s Gambling Treatment and Research Clinic, said social casino games are not subject to any transparency requirements as they are not classed as a gambling product.
“We don’t know if the games are more responsive; they don’t have to disclose what they are doing,” Gainsbury said.
“Where it would be harmful would be if there were deceptive tactics and as far as I’m aware, there hasn’t been any research or inquiry into that.
“There’s lots of people that play these games and, even if they spend money on them, that’s not necessarily harmful.
“It’s important not to demonise these people … the spending itself is not evidence of harm.”
For support visit GambleAware or speak to a counsellor 24 hours a day via the GambleAware Helpline on 1800 858 858.
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