Japanese Dilemma: Is Social Gaming Gambling?

‘Games within games’ in the huge social gaming sector in Japan raised fears about under-aged players’ involvement in gambling by taking part in the massively popular “Dragon Quest X” game, in which players can get together online and play games of dice within the main game, wagering with virtual currency.

In the atmosphere of divided opinions one reminds that the Penal Code prohibits this convertibility which turns the play gambling during the game into unauthorised betting.

Since winnings can be exchanged for real money elsewhere on the Internet through real money trade (RMT) websites, the legality of the dice games has been called into question. In spite of not being regulated by law these sites are used by a large number of online gamers and the market is estimated to be worth at least 10 billion yen.

Extreme popularity of the “Dragon Quest X” in the past 30 days and the fact that the amount of virtual currency trading has far outstripped that in all other online games, surpassing the second-place game by a factor of about 2.6. caught the attention of legal experts concerned that the practice could constitute illegal gambling if virtual currency earned by dicing was cashed in for real money.

The maker of “Dragon Quest X” Square Enix Co. opposed the opinion that playing dice games within the main game was illegal.

“Players are exchanging virtual currency only within the confines of the game. It’s still within the range of play,” said an official of Square Enix Co.

Another game industry source agreed saying that: “Virtual currency used inside online games has no economic value. It isn’t subject to gambling charges.”

But legal opinions claim contrary: “Since there are cash-out systems, it’s possible that the trading of virtual currencies could constitute gambling.”

Comparing the RMT system to pachinko, in which players exchange prizes for cash at trading places outside pachinko parlours, Takashi Kiso, president of the International Casino Institute, said the main difference is that the amusement business control law prohibits people under 18 from entering pachinko parlours.

“Since a large number of primary and middle school students play ‘Dragon Quest X,’ the situation appears to be problematic from an educational viewpoint,” Kiso admitted.