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UAE considering a legal framework for E-gaming platform

Monitoring Desk

Gaming is currently the most profitable form of entertainment in the world, with the industry split into mobile games, e-sports streaming, console purchases and more. It is no surprise then that e-gaming in particular is thriving and rapidly growing in the UAE although digital or online media content remains heavily regulated in the UAE.

The Telecom operators Etisalat and Du have seen e-gaming boom as an opportunity to increase data usage and subsequent revenues. In 2019, Etisalat launched the first ever cloud gaming service to promote e-gaming in the UAE.

Many gaming activities now include gambling features and vice versa which may increase the current uncertainties as to the legal framework around the gaming industry in the UAE given that if any amount of money is involved, it could be construed as gambling – an activity strictly forbidden in the UAE.

Further on this point, it is worth noting that a research report1 by the investment bank Morgan Stanley found five primary types of convergence between gaming and gambling which are as follow:

  1. an introduction of gambling features into social media games;
  2. a use of social gaming features on online gambling sites;
  3. a ‘gamblisation’ of games in which individuals have the chance to win a prize of value;
  4. the consolidation of similar games on non-monetary sites, where the operator of both non-gambling activities and online gambling activities are the same; and
  5. the cross-marketing of online gambling sites to social casino players.

The legal Framework in the UAE

The Telecommunications Regulatory Authority (TRA) has implemented the Internet Access Management Regulatory Policy, in coordination with National Media Council and Etisalat and Du. This policy consists of certain frameworks and categories in regards to the internet, which must be taken into consideration by the UAE internet service providers to ensure the security of the internet and protect end-users from harmful websites that contain materials that are contrary to religious and ethical values of the UAE, which includes gambling.

In addition, the government has set national standards for media content and requires that all local mass media institutions operating in the UAE to abide by them, and should as a result not only respect the regime of the UAE, its symbols and the political system but also refrain from offending its divine and Islamic beliefs.

It is essential to keep in mind that the UAE is first and foremost a Muslim country, governed by Islamic principles and as such, gambling remains forbidden. Article 414 of the UAE Penal Code sets out that those found gambling can be punished with up to two years of imprisonment or a fine of up to Dhs20,000 (Ł5,000), with a certainty of detention if the gambling takes place in a venue prepared for gambling, in a public place, or open to the public.

If caught running a gambling operation in the form of a venue or in a public place, a maximum period of ten years’ imprisonment can be charged, per article 415 of the UAE Penal Code. A foreign gambler may see his/her custodial penalty changed by the court to deportation from the UAE, in accordance with article for foreign gamblers, according to article 121 of the UAE Penal Code.

Moreover, article 17 of the Cyber Crime Law punishes individuals and moral persons, who publish, produce, exploit, or transmit online gambling or any other material deemed to have the potential to prejudice public morals. Anyone found to supervise, establish, or operate gambling websites, can be punished by incarceration and a fine between Dhs250,000 (circa Ł50,000) and Dhs500,000 (circa Ł100,000).

Given that the boundaries between online gaming and gambling have become increasingly blurred, differentiating online gaming from gambling will be a hard undertaking but nonetheless essential for the industry. It is clear however that the UAE is moving forward a most modern view of online gaming, offering great opportunities to the major players in this field as well as new comers who wish to develop middle-eastern tailored online games. However, they will need to understand this region and comply with the complex legal infrastructure that governs this fast growing industry.

While the gambling industry elsewhere in the world has stepped up its duty of care in relation to social responsibility and consumer protection, it is now time for the gaming industry to do so as well.

Courtesy: Marketscreener