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The convergence of interactive entertainment and online gambling in Europe
- 1. A quick guide to interactive entertainment and online gambling in Europe Jas Purewal 16 May 2013 A presentation to LES USA and Canada Spring Meeting 2013
- 2. osborneclarke.com 1 Overview • Interactive entertainment in Europe • Online gambling in Europe: state of the nation • IE and gambling convergence
- 3. osborneclarke.com 2 About Osborne Clarke About Osborne Clarke: • Osborne Clarke is an international law firm with over 550 lawyers working across 12 offices in the UK, Germany, Spain and Italy • Only European law firm with a permanent West Coast presence (Silicon Valley) Our interactive entertainment practice: • OC is the leading interactive entertainment law firm in Europe • We advise the full range of interactive entertainment businesses from small developers to global publishers, platforms and distributors • We advise on legal issues including contracts, IP, privacy, regulation, employment, corporate/tax matters, finance and disputes
- 4. osborneclarke.com 3 About Jas • I'm an interactive entertainment and digital media lawyer at Osborne Clarke – I advise clients from independent studios to major publishers on contracts, intellectual property, regulation (including gambling) and disputes • I write and speak regularly on legal issues in interactive entertainment and digital media, including on my blog: www.gamerlaw.co.uk • I like Twitter: @gamerlaw
- 5. What is interactive entertainment?
- 6. osborneclarke.com 5 What is interactive entertainment? It used to run on…
- 7. osborneclarke.com 6 What is interactive entertainment? But now it also runs on…
- 8. osborneclarke.com 7 What is interactive entertainment? People used to think it only looks like…
- 9. osborneclarke.com 8 What is interactive entertainment? But it also looks like…
- 10. The size of the interactive entertainment industry
- 11. osborneclarke.com 10 How big is the interactive entertainment industry in Europe and the US? 0 5 10 15 20 25 UK Germany France Italy Spain UFIGS total USA 4.5 4.6 3.2 1.7 1.6 20 21.6 UK Germany France Italy Spain UFIGS total USA Euros (bn) Source: Newzoo.com (2012 figures)
- 12. osborneclarke.com 11 The global IE industry in 2012/2013+ Source: DigiCapital
- 13. osborneclarke.com 12 The interactive entertainment audience • Traditional perception of traditional games: Source: Video Gamers in Europe 2010 (ISFE)
- 14. osborneclarke.com 13 The interactive entertainment audience
- 15. osborneclarke.com 14 The interactive entertainment audience
- 16. Europe and online gambling
- 17. osborneclarke.com 16 Europe and online gambling • No EU wide legal/regulatory regime on (online) gambling • (though NB European Commission‟s „Action Plan for Online Gambling‟) • Gambling regulation is therefore governed by Member State law by national regulators • Wide variation in Member State approach to gambling regulation (e.g. UK vs Germany) • Markedly different cultural attitudes to gambling across EU
- 18. osborneclarke.com 17 Europe and online gambling
- 19. osborneclarke.com 18 Europe and online gambling
- 20. osborneclarke.com 19 Europe and online gambling • Where online gambling is permitted it is typically based on a government licence system • Onshore vs offshore (?) > move to „point of consumption‟ system • Breach: criminal and civil penalties • Parallel regulation of related gambling activity, e.g. gambling advertising, consumer, data privacy, child protection
- 21. Convergence (?) between IE and gambling in Europe
- 22. osborneclarke.com 21 The underlying factors Europe is potentially in a IE/gambling sweetspot: Second largest IE industry worldwide + Several large online gambling players + More relaxed regulatory position (compared to US) + Significant take-up of mobile and social services = IE/gambling convergence?
- 23. osborneclarke.com 22 IE and gambling convergence in Europe to date • Move to shared mobile/social platforms • Move towards free to play models • Online gambling learning from social games models
- 24. osborneclarke.com 23 Mobile gambling apps in Europe
- 25. osborneclarke.com 24 The regulation of online gambling in Europe Where online gambling is permitted in Europe, regulation focuses on: • The game mechanic, AND • Is the game closed or open loop? • (What about virtual goods/currency fuelled games?) • Wider question: does this game exhibit the qualities of gambling? Are there other reasons to regulate it?
- 26. osborneclarke.com 25 The regulation of online gambling in Europe • IE and online gambling convergence, and IE regulation itself, beginning to creep up regulators‟ agenda: • UK Gambling Commission, summer 2012: “social games are on the perimeter of gambling regulation” • UK OFT investigation into free to play games, May 2013 • Should gambling regulation be extended over the IE industry? How should European IE be regulated more generally?
- 27. osborneclarke.com 26 The regulation of online gambling outside Europe What about online gambling in other major markets? BRICS: NO South Korea: NO Australia: partly regulated Canada: partly regulated South Africa: heavily restricted
- 28. osborneclarke.com 27 Some conclusions • The interactive entertainment industry is set to become one of the largest creative industries in the next few years • It has gone through a number of evolutions and is developing a number of strands – of which online gambling convergence is one • There is clearly interest in interactive entertainment and gambling convergence and considerable opportunities.... • ...But they are still at an early stage... • ....and the regulatory position is still uncertain worldwide