Regulatory Challenges related to Mobile Gaming - Part 1

Until a few years ago, a mobile phone consisted of a handheld device which enabled a subscriber to make and receive voice calls whilst mobile, as opposed to accessing the public telephony network from a fixed location. As technology progressed, however, both in terms of the handheld device, and in terms of the transmission capabilities on mobile networks, the mobile phone became a ‘smarter’ device, combining voice services with e-mail, fax and/or Internet access. Mobile phones today offer much of the functionality that a full-sized personal computer offered a few years ago, together with the wide availability of telephony and mobile Internet accessibility, bringing about greatly-increased mobility for users. 

 

Mobile gaming refers to the playing of games on ‘smartphones’ and similar devices. It includes games which are played real-time on the Internet, interactive games, or merely games downloaded onto the mobile phone and played later. It also includes games such as poker, casino type games and betting, through the use of a mobile phone. In this article we shall be focussing on this class of games.

 

In this respect, access to gambling sites through a mobile phone is one type of mobile gambling model which the gaming provider can implement; however the mobile platform creates previously unavailable possibilities and new concepts in gambling. One example of such possibilities is gambling by Short Messaging Service (‘SMS’), whereby a player can receive text messages or questions on his mobile phone from a gaming operator and then place a bet by sending an SMS, in reply to question received, to the respective number, according to his choice. Another possibility is that of a gambling operator setting himself up as a Mobile Virtual Network Operator (MVNO). 

 

An MVNO is effectively an operator which enters into a wholesale agreement with an operator of a mobile network (‘MNO’) through which the MVNO is able to use all or part of the MNO’s network to provide a mobile telephony service to its own subscribers (hence a ‘virtual’ network), with a drastically reduced initial capital outlay. Thus MVNO simply brands a service which effectively depends on the infrastructure of the MNO. 

 

The MVNO could then choose to offer preferential packages and/or special rates on telephony and/or data to subscribers using its gaming site, or its SMS-based gambling services, thereby attracting new customers for its remote gaming product as well as generating revenue from the mobile telephony service. The preferential rates could be provided in numerous ways, such as start-up ‘bonus points’ for use in the operator’s own games, or for access to the operator’s website or SMS number; they could be based on usage of the games or usage of the telephony service.

 

The innovative concept of mobile gaming, however, poses regulatory questions: in the first place, one needs to consider whether additional regulatory issues arise from gambling in the mobile sphere. Secondly, one also needs to analyse whether the current regulation can regulate the provision of the mobile telephony service itself in order to ensure an optimal level of connectivity for the provision of gambling on the mobile platform.