This document provides an overview of the interactive entertainment and online gambling industries in Europe. It notes that interactive entertainment has grown significantly and converged with online gambling, utilizing shared mobile and social platforms. However, regulation of this convergence remains uncertain as approaches to gambling vary widely between European member states and other countries. The document examines key factors driving convergence, emerging mobile gambling apps, and debates around regulating games exhibiting gambling qualities.

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

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Overview
• Interactive entertainment in Europe
• Online gambling in Europe: state of the nation
• IE and gambling convergence

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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

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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?

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What is interactive entertainment?
It used to run on…

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What is interactive entertainment?
But now it also runs on…

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What is interactive entertainment?
People used to think it only looks like…

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What is interactive entertainment?
But it also looks like…

10. The size of the interactive
entertainment industry

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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)

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The global IE industry in 2012/2013+
Source: DigiCapital

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The interactive entertainment audience
• Traditional perception of traditional games:
Source: Video Gamers in Europe 2010 (ISFE)

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The interactive entertainment audience

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The interactive entertainment audience

16. Europe and online gambling

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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

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Europe and online gambling

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Europe and online gambling

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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

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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?

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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

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Mobile gambling apps in Europe

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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?

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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?

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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

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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

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Questions?
Jas Purewal
Lawyer
Osborne Clarke
jas.purewal@osborneclarke.com
@gamerlaw