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The shaky rise of digital gambling

What happened?

In the last few weeks, the U.S. repealed a federal ban on sports betting, while the U.K. heavily restricted betting on gambling machines and Belgium declared loot boxes in videogames in violation of gambling legislation. What explains these policies and what does the future of gambling hold?

What does this mean?

While there is a hazy borderline between gambling and playing (e.g. loot boxes, fantasy sports, trading cards, card games, dice games), games with any trace of gambling are liable to public scrutiny. That is because even in individualistic societies that are more lenient towards such risky behavior (e.g. U.S., U.K), gambling is seen as a threat to social order – especially to lower income groups. Still, instead of banning gambling, governments opt for legislation because that enables them to exert control over gambling operators – especially since online gambling transcends national jurisdictions. In fact, legalization of gambling turns gambling more into “playing”, as laws require operators to limit destructive behavior. Thus, the Netherlands has legalized online gambling and the U.S. freed states to legalize betting on sports.

What’s next?

Future digitalization of gambling could reduce the stigma on gambling even further, but could also impede effective legislation. For instance, AI could help detect gambling addictions, but could also contribute to much more addictive games and disrupt casinos by creating unbeatable bots. In addition, blockchain could increase the player’s trust in the integrity of gambling games, but through decentralization could also push players away from major operators that are liable to legislation.