Are Social Casino Games Gambling?

The topic of online gambling and what actually constitutes it has been making news headlines of late, thanks to the fact that fantasy sports betting has come under the political spotlight in the US. It seems that all forms of sports and casino related gaming are now being scrutinised and many are questioning what actually constitutes gambling.

Social Casino Games are now also being questioned, with one class action suit in Washington challenging the courts to classify these games as gambling too. The plaintiff’s argue that although social casino games do not directly accept monetary bets, virtual casino chips which allow players to extend their game play are sold in a secondary market. This game model is similar to a host of other mobile games which allow players to use tokens to purchase items that will enable them to unlock the next level or certain rewards within the game.

The Washington Federal Court ruled that even though online social casino games may allow the use of purchasable virtual chips or coins, the absence of a stake and opportunity for monetary return mean that this form of gaming is not gambling. This means that any games that are free to play and do not award physical prizes other than player amusement fall under the non-gambling category.

For anti-online-gambling proponents, the availability of virtual chips for sale by a secondary market do raise concerns, but the court also ruled that the terms of service within these games that states that “virtual chips have no monetary value and cannot be exchanged for cash or merchandise” renders the existence of virtual currencies for the purpose of the game, inconsequential.

So what constitutes Gambling?

In terms of the laws and Gaming Commission rules of most countries, gambling has a threefold definition and all elements must be present within a game for it to be considered gambling.

  1. The game offers a prize
  2. There is some consideration required by the player, ie. something of value (usually monetary) in the form of a bet, wager or fee to play
  3. There is an element of chance in the game

Thus, any game that offers players the opportunity to play for free, even if real money can be used to enhance or extend the game play, if no prize is offered in return, then the game is not considered to be gambling.

This means that players are able to play social casino games with virtual chips which they may pay for with real money, but they will never really get anything out of it other than entertainment value.

While they do not offer the “social” aspect that some games do, you can still play online casino games for free in “free play mode” with the same entertainment value and ultimate effect without ever having to spend a cent on virtual coins. And by the above definition, there is nothing wrong with doing so and you’ll save money. Makes you think…