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Pallone Voices Concern Over Rise in Unregulated Online Gambling and Underage Betting

Mar 1, 2017
Press Release

WASHINGTON, DC – Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ) today voiced concern over the rise of unregulated gambling on online multiplayer video games and the dangers it is posing for minors in light of a recent investigation by ESPN.
The ESPN investigation focused on popular multiplayer video games that allow players the ability to buy, sell, and transfer virtual items, known as “skins,” which has created a new market for gambling.  Skin betting—online gambling using skins instead of money—has proliferated.  This new gambling market operates unregulated, allowing for underage gambling and disreputable companies to flourish.  According to research conducted by Eilers and Krejcik Gaming and Narus Advisors, approximately $5 billion was wagered in skins last year.
“Gambling is taking new forms—from daily fantasy sports, to betting on e-sports, and even online casino games using virtual ‘skins’ instead of cash—that attempt to bypass the law,” Pallone said.  “Current federal gambling laws are hopelessly out of date, leaving the American public vulnerable to unscrupulous behavior.  No matter the form of the games, we must ensure integrity, accountability, and basic consumer protections, including appropriate age limits, are in place.”
In May 2016, a hearing was held at Ranking Member Pallone’s request to examine the relationship of fantasy sports to gambling.  Since the hearing, Pallone has conducted a comprehensive review of federal gambling laws and is in ongoing discussions with key stakeholders in preparation of introducing comprehensive legislation to update gambling laws to better reflect the current attitudes and circumstances.