Class license conditions for remote games of chance take effect

New class license conditions under the Gambling Control (Remote Games of Chance - Class Licence) Order 2022 took effect on 15 August 2022, Singapore's Gambling Regulatory Authority (GRA) said. The order was made by the Minister for Home Affairs under section 60 of the Gambling Control Act 2022 and was published on 15 August 2022¹.

The GRA describes this category as "remote games with chance-based elements where players can win prizes that are money, money equivalent and/or any thing of value," and gives loot boxes in an online game as an example of a chance-based element³. Under a class license regime, "there is no need for a person or an entity to apply for a license from GRA," and "there is also no need to submit any notification or documents to GRA"³. Instead, "the class-licensed operator can operate as long as all applicable requirements which are specified in the class license order are met"⁴.

The order sets out two tiers. A Type 1 class license covers services where every player's access to the interactive game of chance is free of charge, and the game must not involve any game, method, device, scheme or competition listed in the First Schedule, or display gambling articles listed in the Second Schedule¹. A Type 2 class license covers games where prizes or unlocked features are not money but may be money equivalent or any thing else of value, are won or acquired only through an in-game microtransaction or by playing, and are designed primarily for use in another in-game microtransaction¹. The Type 2 conditions require the licensee to take all reasonably practicable steps to ensure it does not, alone or with an associate, also provide a service where such prizes, features or complimentary tokens "is readily converted or made readily convertible into money or a money equivalent, or into any thing else of value except for use in an in-game microtransaction"¹.

The order defines when play counts as free. A player's access is not free of charge unless the player is not required to pay, and does not pay, any deposit, charge, commission or fee, whether directly or indirectly and whether or not claimed to be refundable¹. Paying to download the game, buying equipment needed to play it, or paying a subscription not connected to any element of chance does not by itself count as giving money to play¹.

The GRA states the consequences of non-compliance:

Other class license categories carry different effective dates. Cause-related games and lotteries, survey-related games and lotteries, and fundraiser lotteries took effect on 2 August 2022. Trade promotion games and lotteries, and incidental games and lotteries, take effect on 1 February 2023³. For trade promotion games, "businesses are not allowed to collect any money from persons to take part in the games of chance and lotteries"³. For incidental games, "participation in these incidental lotteries and games of chance must be free and limited to event participants"³. Mystery boxes, described as items "sold to customers and contain unknown item(s)," have no date yet: "more details on the class license conditions will be provided at a later date"³.

Separately, the Gambling Control (General) Regulations 2022 were made on 14 August 2022 and came into operation on 16 August 2022⁵. They set application fees, including S$6,860 for a relevant applicant for a license to conduct betting operations and S$320 for an applicant offering an opportunity to play a game of chance like Tombola for a prize⁶. They also set a 14-day prescribed period to take down online locations under section 117(4)(a) of the Act, and a fine not exceeding $10,000 for surveillance system offenses⁶.

What it means for players

For players in Singapore, the practical change is that operators of remote games with chance-based elements, including loot boxes, now fall under class license conditions without applying to the GRA. Games covered by the Type 1 license must be free to play and must not use the prohibited games or gambling imagery listed in the schedules. Games covered by the Type 2 license may involve paid microtransactions, but the operator must not also offer a route to convert prizes, unlocked features or tokens into money or money equivalent outside in-game use. Paying to download a game, buying hardware to play it, or paying a subscription unrelated to chance does not by itself make play non-free. The GRA has not published the full schedules in the pages reviewed here, so the specific prohibited games and gambling articles are not listed in these sources. Players outside Singapore are not addressed by these class licenses, which apply to services with a Singapore-customer link or conducted in or from Singapore with a foreign-customer link¹.

What happens next

Trade promotion games and lotteries, and incidental games and lotteries, move to their new class license conditions on 1 February 2023³. The GRA says more details on mystery box class license conditions "will be provided at a later date"³. The Gambling Control (General) Regulations 2022 came into operation on 16 August 2022⁵.