Public consultation on proposed changes to Singapore’s gambling laws | Morgan lewis

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In a press release dated July 12, 2021, Singapore’s Home Office (MHA) announced it was seeking public comment on some proposed changes to existing gambling laws. The proposed changes aim to respond to two trends in the gaming landscape. First, technological advances in the Internet and mobile computing that have made gaming products more accessible. Second, the blurring of the lines between gambling and gambling and the introduction of game elements into products that are not traditionally seen as gambling.

DEFINITION OF THE GAME

Currently, the definition of “gambling” differs under different gambling laws in Singapore, depending on the gambling product.

The MHA proposes to broaden the definition of gaming to make it technologically neutral, so that it can cover existing and emerging gaming products. The MHA recognized that a broader definition could inadvertently cover products that it did not intend to treat as gambling products, such as financial products already regulated by the Monetary Authority of Singapore through the through other laws. To avoid this, the MHA has stated that it will take the approach taken in other jurisdictions (for example, the United Kingdom, Australia, Switzerland and Denmark) and exclude these products from the definition of gambling.

GAMES WITH GAME ELEMENTS

The MHA has observed that mystery boxes are similar to lotteries, especially those that promise high value prizes that can easily be redeemed for cash. As the value of prizes increases, their potential to induce gambling behavior increases. He also observed that the arcades began to offer high value in attracting customers. This trend, together with the fact that arcade games and claw machines can have elements of chance, is of concern as it brings the operation of these machines closer to gambling. The MHA recognizes that such activities are considered a form of gambling. entertainment, but felt that safeguards should be introduced to ensure that these activities do not induce gambling behavior and do not cause social problems.

To address the blurred lines between gaming and gaming, the MHA is proposing to introduce a $ 100 price cap for mystery boxes, arcade games, and claw machines. He believes that the cap will be sufficient to combat the incentive effect of high value prices, without increasing the regulatory burden on operators.

ONLINE GAMES OF CHANCE WITH VIRTUAL PRIZES

The MHA has observed that it is increasingly common for online and video games to incorporate micro-transactions into the game (for example, loot boxes) that can resemble gambling.

Currently, Singapore’s gambling laws and regulations do not consider gambling with virtual prizes to be games of chance until there are in-game monetization facilities for players to trade. virtual prizes for actual payments (i.e. money or items that can be exchanged for cash). The MHA is proposing to update existing laws and regulations to deal with virtual items that can be transferred out of the game and potentially be exchanged for cash or cash on a third-party hosted exchange.

First, it proposes to introduce conditions to ensure that transferable virtual items are kept as part of gameplay and entertainment, as game developers desire. Online games of chance that allow players to use virtual items from other games as a form of betting on casino games or match results, such as skin betting sites, will not be permitted. .

Second, it proposes to allow in-game monetization facilities for free games (i.e. players do not have to pay to play or receive virtual prizes), subject to conditions similar to those imposed on currently exempted commercial promotion raffles. (which will remain exempt in the new legislation), such as:

  • Online gambling must be for commercial promotion (other than a gambling service).
  • No wagering should be involved (i.e. there should be no payment for participating, or for affecting the odds of winning, in the online game of chance, except for one. reasonable charge for the promotional product or service that is sold or provided to qualify for participation).
  • There should be no profit to be made from gambling. The online game of chance must be organized in such a way as to ensure that no profit is made by the commercial organization which organizes the online game of chance, from the game as such.
  • There must be no iconography of the game. Online gambling may not involve (i) any game, method, device, program or competition declared to be a game of chance or a mixed game of chance and skill , or (ii) any gaming instrument or apparatus declared to be gaming instruments or apparatus (as declared by the Home Office in applicable gaming legislation).
  • The online game of chance must not contain any advertising or promotion related to the game.

SOCIAL GAME

Although the changes proposed above extend the scope of Singapore’s gambling laws and regulations and increase the regulation of non-traditional gaming products such as mystery boxes, arcade games and online games , the MHA also proposes the relaxation of the regulations relating to social games of chance.

The MHA recognizes that play between family and friends at home is socially acceptable and poses few public order concerns. Therefore, it proposes to exempt physical social play between family and friends, subject to conditions that protect against criminal exploitation. Social play between family and friends will be expressly authorized under the legislation, subject to the satisfaction of certain criteria, such as:

  • The gathering should be for a social occasion and there is a real relationship between the participants.
  • The game is not promoted or conducted for any commercial or commercial purpose.
  • The activity is not for the private gain of any person other than the extent of gambling winnings.
  • The activity takes place in enclosed spaces of private residences, provided that the participants are guests of the owner or the tenant

The MHA has warned of tough enforcement action against unions that exploit the proposed exemption to conduct illegal gambling activities. Online social gaming between family and friends remains prohibited under the Distance Gambling Act due to difficulties in enforcement (for example, the difficulty of establishing whether individuals know each other sufficiently and meaningfully in the online context to qualify as a social game).

PENALTIES

Finally, the MHA proposes to rationalize the sanctions in various legislation on gambling. The Remote Gambling Law currently provides a three-tiered sanction structure for illegal online gaming, with the highest sanctions imposed on operators, followed by agents, and then bettors. The MHA proposes to apply this differentiated penalty structure to all forms of gambling activity, in order to ensure consistency between online and physical gambling activities.

The MHA is also proposing to increase penalties for repeat offenders who facilitate or operate illegal gambling services, to increase deterrence. The MHA has clarified, however, that it is not proposing to increase penalties for repeat offenders for bettors of illegal gambling services at this time as it intends to focus enforcement efforts on gambling agents and operators. illegal.

The public is encouraged to submit their comments to the MHA by August 10, 2021. Read it full report on MHA proposals.

FEEDBACK

The proposed changes to existing Singapore gambling laws relating to the expanded definition of gambling and the increased regulation of gambling with gambling elements are not surprising. The MHA previously announced in April 2020 that it plans to change all gaming legislation by 2021 to ensure that its regulatory mechanisms can respond effectively to evolving gaming products and business models and expressly had mentioned the need to regulate products such as mystery boxes. The media have also placed more emphasis on the link between loot boxes and compulsive gambling.

Game developers and other stakeholders in the gaming industry may wish to consider whether any of the elements of the games they develop, particularly the in-game monetization facilities and the portability of transferable virtual elements, would be fine. against the proposed changes to the law in their current proposed form, and to provide feedback to the MHA. They may also want to ask for more clarity and detail on the proposed terms to be placed on transferable virtual items and in-game monetization facilities for free games.

The proposed exemption for social gambling represents a relaxation of Singapore’s prohibitive position against gambling, other than in licensed land-based casinos or through exempted outlets and betting operators. It remains to be seen how the MHA intends to define more precisely the conditions of social play and whether it will introduce presumptions or determinative provisions (for example, whether there will be premotions as to what constitutes a “social relationship”). in good faith ”between the participants).

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