Mervyn Davids

Mervyn Davids

Posted on 17 March 2020

What is the Difference between Gaming and Gambling?

There are reasons why the terms ‘gaming’ and ‘gambling’ are sometimes used interchangeably. Gaming and gambling pursuits share many features at the esthetic and utility levels. Both activities can be deemed to cause harm through excessive participation. Still, there are fundamental differences to the activities connected with gaming and gambling.

This is true even in situations where the boundaries may seem blurred. Examples of such distinction is digital games with paid and free virtual currencies or objects, or online casinos offering no deposit codes or free slot machine with free spins. There is the aspect of ‘wagering’; people may use actual money to pay but winners are not given real prizes.

Blurring of Boundaries

Such an overlap not only creates confusion but also regulatory hurdles and improper screening, diagnosing and therapy for people going through extreme conditions of either gaming or gambling. Gaming should be principally defined by its social interactivity, skills-based playing, and outcomes of winning or progress without the involvement of real money. By contrast, gambling is primarily defined by a desire to wager on games with the result that the player will either win or lose real money. The outcomes are completely dependent on chance.

Another reason the distinctions overlap is that both the gaming and gambling industries are constantly evolving. Both sectors effectively leverage the constant advancements in technologies to create games and applications that appeal to newer and diverse audiences.

A significant result of this is that digital media content, which was previously available only on single devices, can now be shared across multiple platforms and networks. This phenomenon is responsible for the crossovers of some gambling and gaming products, networks and device platforms. This has led to widespread concerns that the coalescing of boundaries between gaming and gambling may lead to ‘hybrid’ gambling, where betting houses adopt gaming features and vice versa.

The term ‘gambling’ has negative connotations while ‘gaming’ is perceived by the ‘entertainment’ value. Hence, promoters of lotteries and gambling products like digital gambling machines refer to them as ‘gaming’ to emphasize the ‘entertainment’ aspect.


Loot Boxes
The coalescence of gambling and gaming is particularly evident in the growth of gaming apps and social casino games. The latter are available on social networking sites and smartphone apps. Apart from social interaction, these casino games offer many opportunities that fall within the scope of gambling such as card games, electronic gaming machines, etc.

The opportunity to play these games has to be purchased by collected points, and sometimes with real money. However, everyone knows there are no payouts. Social casino gamers are aware that if they do put any cash in a game, they are not getting it back. Hence, though social casino games cannot be technically associated with gambling, there is another dimension to it.

There are other gaming apps that do not fall under the category of social casino games but have a definite element of what we call gambling. These games offer a virtual consumable, also called loot boxes, which contain random selections of items related to the games.

The items could range from player uniforms to make-up and from sports equipment to special tools that can give players an edge. These consumables have to be purchased, either by virtual assets won or collected, but many times with real money. What raises the question of ethics is the fact that players actually do not know what individual items there are in the box they are buying. They purchase hoping the package will contain what they need to win the game.

Netherlands made international headlines in 2018 when the Dutch Gaming Authority decreed that these virtual packages found in popular games like FIFA 18, PUBG, and Dota 2 would be classified as gambling. The Belgian Gaming Association soon followed suit and ruled that that loot boxes in many games were structured as games of chance and hence should be classified under gambling.

In September 2019, the U.K. Digital, Culture, Media and Sport Committee also recommended that the United Kingdom parliament classify loot boxes as gambling. In its report, the Committee highlighted these ‘immersive and addictive technologies’ and the hesitation of developers to take any responsibility and their refusal to share data on player activities.

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The Importance of Qualified Definitions

Research makes it evident that there exist ample opportunities and potential for increased gambling, especially in the digital sphere as well as actual games with gambling features.

A 2012 report by Morgan Stanley Research outlines five principal ways in which gaming and gambling converge:

  • Introduction of gambling features in social media games
  • Cross-selling of digital gambling platforms or physical venues to social game players
  • Introduction of social gaming elements to digital gambling platforms
  • Consolidation of non-financial gaming and online gambling on sites owned by the same owner
  • The so-called ‘gamblification’ of actual games where players can win items of worth.

Gambling is regulated by government authorities. Gambling addiction is medically and psychologically treated. This means there are various laws and rules, which contain carefully-worded legal language. Any semantic or syntactical errors can have consequences on the application of these rules.

It was recently found that in developing diagnostic guidelines for DSM-5 pertaining to Internet Gaming Disorder, there was a terminology handicap that prevented the inclusion of activities classified as gaming but did not have any elements of gambling. Ultimately, the DSM-5 Working Group agreed on the term ‘Internet Game’. They came to the conclusion that other qualifiers were still required.

Published on: 2020/03/17