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Is Online Gaming Considered Gambling?

Is Online Gaming Considered Gambling?

Is gaming gambling? This debate has been going on for a long time, and a verdict isn’t visible in the near future. China and the United States are two countries currently leading the gaming industry, and subsequently, also produce the most esports players. However, the European market has seen some exponential growth in gaming since the start of the pandemic. 

It is predicted that by 2023 Europe will spot over 351 million gamers, which is nearly half of the total population! With the current projection, the market will see a massive increase, become more profitable and lead to more gaming businesses being created. 

But, running a gaming business is no easy task, especially considering that it is considered a high-risk market and that many banks and financial institutions are not supporting these industries. 

There’s no question that these markets are on the rise but can we compare gaming and gambling as similar entities? First let’s look at what is considered as gambling. 

What is gambling 

Gambling is identified by two characteristics:

  1. Risking money or belongings 
  2. Driven by luck or chance

Usually when someone gambles, they have to risk the loss of either their money or their belongings. They have to “buy into” the game first by giving money to play. Then, it’s a case of relying on luck or chance in hopes to  increase the value of the buy-in they gave. 

Some familiar games that are considered as gambling: 

  • Poker
  • Black Jack
  • Slots
  • Roulette
  • Betting of any sort

Gaming vs Gambling

With gaming, luck is not the factor that ensures a return or a win. Gaming relies on a level of skill. Although both gambling and gaming are online, it can make it tricky  to distinguish between the two. 

There isn’t a black or white definition to this, especially with the move to online. Many argue that online gaming is gambling, by consideration of the myriad of microtransactions that take place within gaming. 

The gamer uses real money to purchase in-game advancements or items, which cannot be traded for real money. Other games don’t contain in-game microtransactions, but require an upgrade that unlocks more features or gives access to the full game. This, to many, is considered gambling.

However, gambling relies more on luck and gaming on skill. Think chess, skill is needed to win the game. Whereas, when you think of slots, the gambler relies only on luck after pushing the “roll” button. 

So, do you think online gaming is gambling? 

Is gaming gambling, then? 

It is not uncommon for some to refer to online gambling as gaming and vice versa. Especially considering that the gambler needs to play a game to win money. But, can the same be said for gaming? 

Consider this: many online games only allow advancements once money is paid to either upgrade the game and unlock more features or to complete a level. When this is taken into consideration, online gaming could be seen as gambling, because there is no guarantee that the gamer will get their money or worth’s back. 

But, it is hard to say, as online gaming falls within the grey area of this argument. When a gamer purchases in-game elements, they know that they won’t get their money back. Which means the risk factor isn’t there, nor are the chances of increasing the value. 

How microtransactions function

Gaming and gambling businesses have multiple ways in which microtransactions take place. Usually these businesses try to avoid transactions and banking fees as best they can. So, they work around making use of wallets for in-game transactions or applications like PayPal and Venmo

They usually require a minimum amount of money to be allocated to these platforms to allow gamers to make transactions within the game. The user makes a relatively small credit card purchase to buy in-game currency. However, each one of these in-game coins is usually only worth a penny or so. The player then uses these to buy virtual items within the game, without additional transaction fees for the business.

This means that gaming and gambling businesses need a banking or financial platform that caters for their needs and supports them as a high-risk business. These types of services are hard to find for gaming businesses, especially considering the perceived dangers and risks they could potentially be to financial service. 

PayPugs can help high-risk businesses

PayPugs is an online payment solution for all, and that puts our clients in charge of their finances. There are many challenges that gaming businesses face as high-risk industry businesses, and PayPugs has the right solutions.

We can assist businesses in high-risk industries who are in need of financial solutions. We provide customisable packages that allow businesses to operate as they please, all the while being fully in charge of their finances. 

Gaming companies face the challenge of getting an operational banking solution enabling them to operate internationally. That is why we have a ‘high-risk friendly’ approach, so that our customers can continue to work in their industry without worrying about banking. 

PayPugs offers a great solution to gaming companies, book a call with us to see how we can help you. 

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