Sweden has blocked three illegal operators, including two skin gambling brands

Among them: Galaktika NV, as well as Newera Frozen PTE Limited and Aprodi Ltd, which offered skin gambling without having the necessary license.
Due to the increased interest of young people in skin gambling, there were many disputes regarding the regulation of this niche.

Roman Baranovskyi, Senior Associate at SBSB Fintech Lawyers, comments on the situation:

Recently we have seen a rapid ‘boom’ of skin gambling and loot boxes, where there are demonstrable elements of gambling, which comes out of the principle of randomness of winning. This means that the player has the opportunity to win a valuable expensive item for thousands of dollars (in our case, skin) or get a digital product, at a cost clearly lower than the original bet on his winnings. For example, bet $100, get a skin for $2.

This business model is not traditional and is not regulated in many countries, so online casinos provide this type of gambling without a license.

The topic of determining the legal status of lootboxes with random in-game items is the most discussed topic in the iGaming sphere today. Regulators are trying to determine whether different types of lootboxes with skins and in-game items in video games have an element of “gambling”. If so, they should be regulated under existing gambling laws. Accordingly, companies that offer this type of in-game parameter should be licensed accordingly.

EU countries are still debating and showing uncertainty regarding this issue. Some member states are trying to regulate big giants like Counter-Strike, FIFA, Hearthstone, Play Station in terms of offering lootbox purchases, not to mention skin-gaming online operators.
To summarize: the topic of skin-gaming is quite controversial. Regulatory bodies in practice have a clear list of verticals that are subject to licensing. These are betting, slots, poker, bingo, lotteries, baccarat, and other traditional, familiar verticals.

Skin gaming is currently unregulated, and therefore not subject to licensing.

However, as we can see, things are moving towards gradual regulation and, as a result, blocking operators who provide this type of gambling without proper licensing.

If you want to run your gambling business properly and without being blocked by the regulator, SBSB Fintech Lawyers are ready to help you now! Contact us!