(Bloomberg) -- During a round of poker in a virtual reality casino earlier this month, one player at the table was berated with sexually explicit language.
The player, dressed in a purple top and a white anime-style haircut, was highly likely to be a child, based on their voice and their reaction to the abuse. While playing rounds of Texas hold ‘em, a Bloomberg News reporter saw users smoking virtual cigars and passing around digital guns while the suspected child played with a toy donkey next to their chips. In another poker game, a player said they were in the fifth grade, which would probably mean they were aged either 10 or 11.
The virtual casino built by Pokerstars VR is owned by one of the biggest betting groups in the world, Dublin-based Flutter Entertainment Plc. Launched in 2018, it has about 40,000 to 50,000 daily players and is accessed via headsets including Meta Platforms Inc.’s Oculus Rift and Quest products, or HTC’s Vive.
“There is a zero-tolerance approach to any player that acts in breach our of terms of service and community standards, circumvents our age rating, uses toxic language or behaves inappropriately, all of which can lead to permanent bans,” a Flutter spokesperson said. “We are investing to enhance player protections, including the roll-out of AI-driven tools to support our moderators, and are working closely with Meta and other technology partners to continually raise standards.’’
Facebook and Instagram-owner Meta is the world’s top VR headset maker, with 80% market share according to research firm IDC. It asks users to be aged 13 and over. Pokerstars VR was the 14th most popular “experience’’ on the Oculus Quest chart in mid-May. More than a quarter of US teens own a VR device, according to investment bank Piper Sandler.
Gambling regulators have placed strict age restrictions on betting for money, with a minimum of 18 to visit a casino or game online in Britain. Playing virtual poker where no money changes hands is treated more like a videogame and is not illegal in the UK or US, and none of the major companies behind the virtual casinos have broken any laws. Now activists and politicians are increasingly focusing on how to regulate gateways into gambling.
"If you took a child into a casino there would be a public outcry,” said Carolyn Harris, a UK MP and chair of a cross-party gambling harm group. “This is no different. This is giving children access to what a real casino is like. They need to protect children and vulnerable people and the government has to take responsibility for that.”
Pokerstars VR makes it clear to users before entering its virtual casino that players must be 18 or older to play. It employs moderators, and players can report others they suspect of being underage. Flutter employs five full-time moderators but it’s planning to hire more. The other betting game available via Meta’s Oculus is Poker VR, where anyone above the age of 13 is welcome, according to its terms of service. Neither title lets people play with real money but Pokerstars VR charges for extra virtual chips and decorative items like guns and toys. Reviews for both titles on the Oculus store and game service Steam reveal user complaints about rooms full of players apparently under the age of 18.
“It’s incredibly concerning,’’ said Andy Burrows, head of child safety online policy for the UK’s National Society for the Prevention of Cruelty to Children. “The harm here is about exposure to age-inappropriate content, to age-inappropriate experiences.” Although the money is virtual, “it can socialize them into gambling habits and run the risk of normalizing that behavior. But also, we know that virtual currencies are a route for exploitation, and we know that abusers will look to offer gifts,’ he said.Poker VR developer Mega Particle, based in California, didn’t respond to a request for comment.
“Quest devices are designed for children ages 13 and up, and some experiences are only for people 18 and up,” said a spokesperson for Meta. “We strongly encourage parents who choose to allow children 13 and up to use the headset to monitor their use, limit the time they spend using the headset, and ensure they take breaks."
What the Metaverse Is, Who’s In It and Why It Matters
Virtual reality headsets have been around for decades, but have recently exploded in popularity, with customers spending over $1 billion in Meta’s Oculus Quest store, in part driven by the hype of the so-called metaverse, a virtual universe that blends various aspects of digital technologies such as gaming, VR and social media. Facebook’s parent company spent $10 billion developing metaverse products last year, and JPMorgan estimates the market will someday reach sales of $1 trillion a year.
Although the metaverse does not truly yet exist, various digital hubs are being created where companies are marketing various virtual reality experiences. Poker rooms run by Decentral Games have become some of the busiest venues in its Decentraland world, with guests buying virtual items that can later be sold for cryptocurrency.
On the Internet Nobody Knows You’re a Kid – Yet: Parmy Olson
Traditional gambling firms are keen to tap into the trend. Flutter rival Entain Plc, domiciled on the Isle of Man with its head office in London, is preparing to open a “lab” in the UK capital as part of a £100 million ($122 million) program to develop faster, more captivating games in virtual reality. The announcement played up the facility’s proximity to the local headquarters of youth-focused platforms Snap Inc. and TikTok. Entain owns 24 betting brands including Ladbrokes, and owns half of US unit BetMGM.
Entain will work on using 5G wireless from the likes of Verizon Communications Inc to deliver “more immersive” experiences, the company said. It also means more instantaneous interactions and the possibility to squeeze in ever more bets. The former CEO of Verizon Media Group, a division since sold to Apollo Global Management, previously said 5G means “more in-game betting opportunities.”
Entain doesn’t operate any virtual reality casino games yet. It plans to convert two of its traditional British betting shops into virtual reality arcades this year, and it will also launch “virtual sports clubs” where players wearing Oculus headsets can bet on fixtures. Currently, they offer a VR horse racing experience called JockeyCam for fans who have turned up to track events.
Entain said it’s upgrading player protections to “stay ahead of the rate of innovation,” including with the use of technology it says can quickly identify risks, adding that “all emerging technologies will of course be subject to the same stringent identity and age checks that are already in place across all of our products.’’
Given the full-on experiences virtual reality can provide, Burrows said companies should be paying closer attention to safety.
“The immersive and experiential nature of these services means that the risks to children are heightened compared to existing or previous forms of technology,’’ he said. “Correspondingly the requirement for companies to be delivering an effective safeguarding response should be there too. But it’s clearly lacking.’’
Facing increased activism in response to problem gambling, British and Irish lawmakers are drawing up stricter laws to clamp down on their homegrown gambling firms, now some of the world’s largest. In an April speech Andrew Rhodes, the head of the UK regulator, the Gambling Commission, honed in on “the spate of novel products we now see coming to market, often in the unregulated spaces between established markets.”
With “hangers-on, trying to make a quick buck,” the boundaries between digital products and gambling are blurring, Rhodes said. However, UK gambling law doesn’t classify games that don’t permit customers to win a prize or money or things of monetary value as gambling, so the current VR products may not count.
The speed with which the world of gambling has changed was underscored in one exchange during a Pokerstars game seen by Bloomberg, when a young player was accused of being spoiled for having an Oculus headset, which costs around £300.
“So what? I bought it for myself,” the player said. “I bought it with my money.’’
“Man, when I was in 5th grade, there wasn’t even the internet,’’ came the response.
©2022 Bloomberg L.P.