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  • Writer's pictureKevin Jones

Virtual Worlds: Understanding the Dynamics of the Metaverse and the Gambling Industry

Gaming Eminence delves into the crossroads of the Metaverse and gambling industry, examining forecasted growth, early adopters, worlds overview and insight from product and legal experts.

In the ever-evolving landscape of online gambling, one concept is on the minds of the industry leaders and bettors alike: the Metaverse. While online gambling has been a staple since the early days of the internet, the metaverse presents an interesting opportunity for gambling operators to tap into a shared virtual world where real-life experiences seamlessly blend with digital interactions.


Amidst the global pandemic, with brick-and-mortar casinos forced to close their doors, virtual gambling platforms experienced a surge in popularity, specifically - the Metaverse. Often described as an uncharted realm of limitless possibilities, the Metaverse allows users to engage in a plethora of activities, from purchasing virtual goods to socialising with others and even establishing virtual businesses.


According to a report by Verified Market Research in June 2022, the Metaverse market, which was valued at $27.21 billion in 2020, is projected to grow to $824.53 billion by 2030. Additionally, the Citi GPS report "Metaverse and Money" suggests that the Metaverse could potentially attract up to 5 billion users by 2030. Despite the growth potential, the Metaverse has faced criticism from many quarters.


A further report by Fact.MR outlines the Metaverse gaming industry is estimated to be worth US$51 billion in 2023 and is expected to grow significantly to reach US$1.3 trillion by the end of 2033, with a remarkable CAGR of 38.2% from 2023 to 2033.

The metaverse offers a unique opportunity for gambling operators to reach a wider audience and provide an immersive and interactive gambling experience that goes beyond what is possible in the physical world. By setting up virtual casinos and sportsbooks, operators can provide players with access to a wide range of games and betting options, all from the comfort of their own homes.


Several gambling operators are venturing into the Metaverse despite the challenges. BetUVerse is developing fully licensed Metaverse resorts and casinos to provide a range of games and activities within the Metaverse ecosystem. Companies like Atari and Decentral Games also are delving into the metaverse and in January 2022 leading operator Entain's announcement about its launch of their Global Innovation hub, Ennovate "Ennovate to develop and showcase disruptive technologies and first consumer products for the sports and entertainment metaverse"


In 2022 former Ex-Genting and Betsson director Jeremy Taylor launch a new Metaverse-focused casino and sportsbook call LynxBet powered by JNS Gaming with a focus on the Latam market, that recently partnered with Delasport.


Earlier this year a press release from Kindred, a major player in the gambling industry, has partnered with The Sandbox, a French online gaming platform, to offer a unique betting experience called Unibet Arena.


Pragmatic Play, announced in April this year a significant commercial deal with Land Vegas, the first Latin American casino in the Metaverse. This partnership positions Pragmatic Play as the first provider brand to collaborate with Land Vegas.


More recent this past week Roobet announced it's summer launch into the Metaverse

 

The breakdown below outlines an overview of what Gaming Eminence could find out about known worlds, and casino's launched with those that are in the works this year or potentially launching.

Known Metaverse worlds

​MetaWorld

​Launched

​Developer

​AltsspaceVR

2015

​Microsoft

​Atari Metaverse

​2022

​Atari

Axie Infinity

​2018

​Sky Mavis

​Blocktopia

​2022

​Bloktopia

​Byoverse

​2022

​BYO Studios

​Decentraland

​2020

​Decentraland Foundation

​Highstreet

​2015

​LumiereVR

​Horizon Worlds

​2022

​Meta Platforms

​Metahero

​2021

Metahero FZCO

​Metaverz

​2022

​Triller Inc

​Shiberse

​2022

​Ryoshi

​Somnium Space

​2020

​Somnium Space

​Star Atlas

​2022

​Automata

​The SandBox

​2018

​Animoca Brands

​Viverse

​2022

​HTC

​VRChat

​2014

​VRChat

Known Metaverse Casinos

​Meta Casino

​Owner

​Meta World

​Atari Casino

​Atari

​Atari Metaverse & Decentraland

​Bored Ape Yacht Club Casino

​Decentral Games

​Decentraland

​Chateau Satoshi Casino

​​Decentral Games

​​Decentraland

​DET Poker Lounge

​​Decentral Games

​​Decentraland

​Tominoya Casino

​​Decentral Games

​​Decentraland

​Lucky Block

​Block Media Ltd

​Underdevelopment

​BC.Game

​BlockDance B.V

​Underdevelopment

​ICE Poker

​Decentral Games

​Decentraland

​BetU Verse

​Underdevelopment

​Serenity Island

​Decentral Games

​Decentraland

​LynxBet

​JNS Gaming

Recent/Upcoming/Potential Metaverse Casino Launches

​Sand Vegas Club

​Cloverland

​Astro Casino

​Doge Vegas

​BetVerse Hotel and Casino

​The Mad Pigz Casino

​The Sandbox Game

LynxBet

​EarnBet.io

​​Edgeless.io

​Peergame

Lands Vegas​

​Roobet

​BCverse

The move towards the metaverse is not without its challenges, however. Operators will need to navigate the complex regulatory landscape surrounding online gambling and ensure that their platforms are secure and fair. They will also need to invest in the development of high-quality virtual environments that can provide players with a truly immersive experience.

 

Gaming Eminence engaged the services of a diverse group of experts in the fields of product launch and legal matters to delve into the implications of a Metaverse on the gambling industry. The consulted professionals encompassed individuals with extensive knowledge and experience in these domains, and they included: Daniel Gunba Founder/CEO at TRIIONFT Gaming and Jo Joyce Senior Counsel (Data and Information Rights) at Taylor Wessing.

GE) What are the technical requirements for building a gaming product in the metaverse, and how can a gambling operator ensure their product is compatible with different metaverse platforms?


DG) Today, in the era of technology, the Metaverse offers a lot of opportunities. However, when it comes to iGaming, each Metaverse has its own requirements and may not meet the needs of operators. For example, Decentraland works for gambling, but it doesn't fully meet the expectations of the iGaming industry. Unfortunately, there is currently no way to develop a cross-platform product that will be compatible with any Metaverse right from the start. This is a task for Metaverse developers to provide the necessary tools and compatibility for operators.


GE) How can gambling operators leverage VR and AR technology to enhance the user experience of their gaming product in the metaverse?


DG) There have been many discussions about VR and AR, especially after Apple's WWDC23, where VisionPro was showcased. However, let's consider what players expect from iGaming products and why they love them. One of the main reasons is the extremely friendly UI/UX, which is simple and intuitive. If we were to ask a regular player about VR, they would likely say that they don't necessarily need it. However, the Metaverse offers a more interactive experience, and the user base is different. Leveraging VR and AR in the Metaverse can introduce new and exciting elements to traditional gambling, allowing people to experience it in a novel way like Poker Tournaments or Slots experience.


GE) What are the design considerations operators need to take into account when building a gaming product in the metaverse, and how can an operator ensure that their product is engaging and immersive for users?


DG) In general, casinos today should aim to avoid pixelated, cubic, or low-graphic Metaverses. iGaming is about high quality and rich experiences. When it comes to design considerations, I would highlight three key factors: interactivity, user-friendliness, and optimisation. Apart from the traditional gambling experience, users are looking for fast and responsive software/technology that provides new and engaging feelings. Additionally, the product should be easily accessible and intuitive, working seamlessly across various devices such as smartphones, laptops, and potentially glasses in the near future.


GE) What are the data protection and privacy regulations that gambling operators need to comply with when offering gambling products and services in the Metaverse? How can they ensure compliance with these regulations?


JJ) One likely challenge of operating in the Metaverse [see also re IP below] is a lack of control over the platform. Even though gambling operators may not control the platform in a technical sense, it remains their responsibility to ensure that appropriate privacy notices and safeguards are made available to all players. Without technical control, they will need to ensure they have contractual provisions in place with platform operators to make sure that those legal obligations can be met.

It is also essential that they understand where data is being processed. While the Metaverse may feel real, the servers that power it actually are and if data is processed in a higher risk company, it is the data controller (i.e. the gambling operator), with responsibility for ensuring the security of that data and identifying the legal measures necessary to permit the movement of personal data across borders.

In many respects gambling operators are subject to exactly the same data protection laws and privacy regulations as any other e-commerce business, regardless of being in the Metaverse or not. The GDPR will apply wherever they have players in the EU (or are operating there) and the UK GDPR will apply very similar requirements if there are players or operations in the UK. The extraterritorial effect of privacy laws means that gambling operators may find themselves subject to many different regimes at once.

However, while subject to the same laws as any e-commerce operator, gambling and gaming operators are likely to see particularly strict enforcement since their offering is viewed as inherently bad for children.

The ICO's Age Appropriate Design Code (the "Children's Code") is a set of 15 enforceable standards which online services need to follow to protect the privacy and personal data of children likely to access the service. The fact that the applicability test for sites is whether children are likely to access them – rather than whether they are designed for them – is important. The ICO has recently indicated that it expects sites with content or services only permissible for over 18s will appeal to younger teenagers simply because children are attracted by what is forbidden.

The ICO is currently consulting to inform its guidance to businesses on how they should assess the likely appeal of their sites to children. In the meantime however, gambling operators would take a risk in making their privacy content accessible to children, since they would appear to be targeting underage users. The ICO has been clear that the only way for gambling sites to comply with the requirements of the Children's Code (without appearing to actively solicit underage users) is to effectively age-gate their sites to prevent under 18's from accessing. Self-reporting on age will not be sufficient.

The ICO recently responded to a DCMS enquiry on gambling regulation in the UK (https://ico.org.uk/media/about-the-ico/consultation-responses/4024615/ico-response-dcms-gambling-regulation-20230310.pdf). One area it commented upon was recent discussions around loot boxes. While loot boxes are not likely to be drawn into the definition of gambling in the UK imminently, meaning that can be used in games accessible to under 18s, the ICO is keen to ensure that where they are used, the requirements of the Children's Code are considered, including in the Metaverse.

Our data protection and privacy team has recently wrote about the UK's actions in protecting under 18s from online gambling and gaming-related privacy issues. We included a list of ICO recommendations on how to comply with the regulation, here are a selected few that's relevant for reference:

Be transparent – this could be done by e.g. running user research trials on child friendly privacy information with different age groups; or designing age-appropriate different ways to communicate privacy information according to age group.

Prevent detrimental use of children's data – ensure all optional uses of personal data are off by default and only activated after valid consent from the player (or parent/guardian where the player is under 13); introduce checkpoints or natural breaks in game play into game design, together with messaging to encourage players to take breaks; and implement measures to control or monitor product placement, advertising or sponsorship arrangements within community servers where children can access them from within the game.

Set high privacy settings and parental controls – this could be done by providing parents with real time alerts about their children's activities both in-game and in terms of their privacy settings; ensure players are given age-appropriate explanations if they try and change their settings; assess whether it is possible to introduce variable settings to allow children to control what personal data is visible to others; have high privacy settings by default including by having voice chat settings off by default, providing a 'do not disturb' permanent and session setting, allow settings for friend requests to include 'no one'; and introduce a setting to allow only other children to communicate, as well as other options for age assurance to help identify adults trying to communicate with children in the chat function.

Use profiling responsibly – children must be given control over both whether and how their personal data is used, especially where profiling is not essential to game play. This should include checking any third party advertising provider is displaying age-appropriate in-game content; providing age-appropriate information in-game at the point profiling takes place, encouraging children to ask a trusted adult and only activate profiling if they understand what it is; and separate the opt-in consent for marketing from the acceptance of terms and conditions and the privacy policy when players create a new account – profiling for marketing purposes should be off by default for children.


GE) What are the legal implications of using third-party assets in the Metaverse, and are there any intellectual property rights or licensing agreements that gambling operators need to obtain to offer their gambling products and services in the Metaverse?


JJ) Wherever third party IP assets are used in gameplay or other content there is a risk of IP infringement unless proper licensing arrangements are in place. In some parts of the world there may be 'fair use' exceptions for incidental inclusion but in most cases the use of a trade mark, image, music or other content belonging to a third party will be deemed commercial use and should be subject to licensing terms. Operating in the Metaverse may add some additional complication, especially where operators do not have full control of their platform but it is nevertheless essential to do proper due diligence to ensure that disputes over third party rights do not arise.

 

As the technology behind the metaverse continues to evolve and improve, it seems likely that more gambling operators are exploring the potential move into this space, offering players an exciting new way to gamble and interact with each other. Only time will tell what the future holds for the world of virtual gambling, but one thing is clear: the Metaverse is a space that is ripe for innovation and exploration, and the gambling industry is poised to be at the forefront of this new frontier.


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