Category Archives: Children

McDonald’s Come Under Fire for Super Mario Slot Machine Toy

Casino Watch Focus has long reported on underage gambling and risk factors for children exposed to gambling. The NFL came under fire for marketing fantasy football to minors, and they decided to end those efforts. More recently, its been loot boxes in video games that have been so widely discussed. As many have explained, it’s a game mechanic with virtually no difference from gambling, with on legislator outright calling Battlefield II a “Star Wars Themed Online Casino.” Where as Mickey Mouse, the second most recognizable character in the world under Disney was under fire (as they own the Star Wars brand and had to intervene in the loot box situation), its now the world most recognizable character, Nintendo’s Mario, that’s in news.   McDonalds made a slot machine toy of Mario in a line of Nintendo themed happy meal toys, and its been called inappropriate by the National Council on Problem Gambling and others. An online source explains: 

Today, Jennifer Kruse, Executive Director of the Florida Council on Compulsive Gambling (FCCG), joined the National Council on Problem Gambling by calling upon the toy manufacturer giant, Nintendo® of America, and the fast food industry leader, McDonald’s®, to stop marketing their Slot Machine Super Mario™ toy from McDonald’s® Happy Meals®.

“We were shocked when we noted the slot machine toy in a Happy Meal® here in Florida. Nintendo® and McDonald’s® need to be attentive to the messages their products are promoting among children,” said Kruse. Youngsters are very impressionable and despite the restrictions to gamble among minors, research reveals that adolescents are involved in gambling activities and are at higher risk for developing gambling problems than their adult counterparts.”

“Just because you cannot easily ‘see’ a hazard, does not mean it doesn’t exist. Had the Super Mario™ Happy Meal® toy highlighted a bottle of beer or bloodshot eyes, or had the fantasy character smoking a cigarette, government and others would be up in arms. Unfortunately, we can no longer afford a double standard when research confirms that problem gambling is a growing public health issue, in general, and especially among adolescents, that demands attention now,” concluded Kruse. 

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New Loot Box Legislation Proposed Domestically as Foreign Governments Ban them in Video Games: Publishers State they Wont Stop Exposing Children & Gamers to Such Practices

Casino Watch Focus has reported on the ongoing realization that loot boxes are simply a sophisticated form of gambling in video games. More and more jurisdictions are becoming aware of loot box and skin gambling as they are expected to reach revenue over $50 billion dollars by 2020. Many domestic jurisdictions have already proposed regulations, studies or called for the industry to self-regulate. Minnesota is the most recent to propose legislation. An online source explains: 

[N]ew loot box bill was introduced in Minnesota this week. The bill joins other state level legislative efforts in the USA, which were introduced since the global loot box debate peaked in the second half of 2017. State Rep. Rick Hansen (DFL-South Saint Paul) introduced the bill H.F. 4460, which “would regulate ‘loot box’ gambling in video games”. The matter was discussed and both parties spoke in favor of the bill. According to Rep. Hansen “People are spending real money on random drawings in video games. Minnesota regulates gambling and when loot boxes meet the threshold to be considered gambling, then we need to treat it as such and regulate it too.”

The bill prohibits the sale of a “video game containing a system that permits the in-game purchase of (1) a randomized reward or rewards, or (2) a virtual item that can be redeemed to directly or indirectly receive a randomized reward or rewards to a person under 18 years of age” [sic].

Additionally, no video game may be sold or provided unless accompanied by a warning stating: “Warning: This game contains a gambling-like mechanism that may promote the development of a gaming disorder that increases the risk of harmful mental or physical health effects, and may expose the user to significant financial risk.” For games sold through electronic means, the warning must be acknowledged by the purchaser.

The Minnesota bill has a long way to go before it becomes binding legislation, as do most of the domestic bills discussed recently. However, several foreign government have passed and implement regulations including outright banning loot boxes from video games. The online European source The Verdict explains: 

Belgium has followed the Netherlands in banning the sale of loot boxes in video games, as Europe begins to crack down on what it deems to be illegal gambling operations run by major game publishers. Speaking to /Verdict/, a Belgian Gaming Commission spokesperson said: “The Belgian Gaming Commission has come to the conclusion thatreal-money loot boxes are gambling. This means that in Belgium, these types of games are prohibited unless licensed.”

If they do not adapt their games, they all potentially face criminal prosecution. Punishments would include up to five years in prison and fines of up to €800,000, which could be doubled if it is found that minors were involved.

It is highly likely that this would be the case. Approximately 22% of video gamers are aged between ten and 20 years old according to Statista, which is largely the cause of the Belgian Gaming Commission’s concerns. The Belgian Gaming Commission added:

“Real-money loot boxes are not innocent. Especially because the video games that they appear in are often played by children. “The Gaming Commission wants to protect the players in general and vulnerable groups (e.g. minors) in particular.”

Despite all these bans and all the discussion of how loot boxes are gambling and harmful to children, publishers don’t seem to willing to stop such predatory practices. EA, the publisher whose Star Wars video game Battlefront started this backlash, has been the most vocal about their inability to part from this gaming mechanic. The Verdict continues:

The loot box debate has been going for some time, but the bans issued by the Netherlands and Belgium are the first sign that governments are beginning to take notice. However, at least for the time being, publishers are unlikely to be too concerned.

Tom Wijman, market consultant at video game research company Newzoo, told Verdict: “I don’t expect publishers to be too worried, it should be quite simple to turn the option for loot boxes off for Belgian and Dutch bank accounts, and those markets are pretty small compared to the United States or UK.”

EA stated that it disagrees with Belgium’s ruling. A company spokesperson told /Verdict/ that the company welcomes discussions with Belgian authorities, but did not confirm whether it intends to comply with the request to remove these items from its games. EA CEO Andrew Wilson has since told industry analysts that the company plans to continue pushing forward with services such as Fifa Ultimate Team, which generates vast revenues through the sale of loot box items known as player packs.

For now, the issue is more of a nuisance than a problem for game publishers, but it could get worse if other regulators decide to follow Belgium’s lead. “I think the significant part about these bans isn’t so much theNetherlands and Belgium banning loot boxes, but rather the messagethis sends to regulatory institutions for gambling worldwide,”Wijman added. Should other countries issue similar bans, the attack on loot boxes could prove costly for developers.

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Video Game Loot Boxes and Skins Gambling Pose Risk to Children as Revenue Generated are Expected to Reach $50 Billion

Casino Watch Focus has reported on the ongoing battle by legislators and video game companies over the highly controversial loot box mechanics that many see as out right gambling being marketed to children and older gamers alike. Its now being reported that revenue generating from micro transactions in video games could almost double over the next four years. An online investment source explains: 

A new study from Juniper Research forecasts that loot boxes and skins gambling, two emerging gaming growth sectors, will reach a total spend of $50 billion by 2022, up from under $30 billion this year. Loot boxes are in-game packs which contain a random selection of items; while skins are in-game cosmetics which change the appearance of weapons or characters.

The new research, Daily Fantasy Sports & In-game Gambling; Skins and Loot Boxes 2018-2022, found that skins gambling should be of great concern to regulators. Frequently utilized as virtual currency for betting, skins are then cashed-in for real money via online trading platforms.

Research author Lauren Foye explained: “Skins are acquired both through playing video games and from opening purchased loot boxes. These items have value depending on rarity and popularity within game communities. On PCs, skins are traded for real money via Steam’s ‘Marketplace’; the platform has 125 million registered users globally.”

These grown numbers are especially troubling when one understands just how prevent these transactions are accessible by children. In the US, many legislators have taken notice and started discussions and legislation formation to address the issue. In the UK, the amount of kids identified as having already participated in skins gambling is beyond troubling. The article continues: 

A 2017 study by the Gambling Commission found that 11% of 11-16 year olds in the UK had placed bets with skins; meaning around 500,000 children under the age of 15 could be using skins for gambling. Juniper finds skin gambling risks being pushed underground; without further counter-measures, wagers will surpass $1 billion globally by 2022, a fifth of the global market seen prior to Steam’s interference.

Juniper strongly recommends regulation for skin trading and gambling, in an attempt to both prevent youth participation and remove malicious actors who run sites which steal skins or short-change users.

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A Brief Look at Crime 03/05 – 03/11

Gunmen Shoot 21 at Clandestine Cockfight in Mexican Border State

Preliminary information revealed that an unknown number of gunmen opened fire at the cockfighting arena known as “Centro Gallístico Santa María” which is located on the outskirts of the state capital of Chihuahua, according to Mexican news outlets. Based on a statement by the state prosecutor’s office, several masked gunmen opened fire on people gathered at the club late Saturday at approximately 11pm. Four were killed at the scene with an additional three succumbing to their wounds in transit to hospital. Two of the wounded were identified as children aged seven and 10. One victim, who died early Sunday morning, was identified as 15-year-old Juan Daniel Magallanes Rodríguez received a gunshot to the chest. Cockfighting is very popular in many parts of Mexico; the primary draw is the gambling. The activity also tends to invite organized crime and cartel elements due to the high-stakes wagers. Gun violence is also common. Cockfighting operations have also been discovered in the United States, typically along the southern border. The illegal operations are primarily run by illegal and legal immigrants from Mexico. Numerous operations have been closed down in Arizona, Texas, New Mexico, and California.

‘The sense of betrayal … was awful’ – Sterling woman gets 6 years, $400,000 bill for her gambling related crimes

A longtime employee, considered to be family, violates a position of extreme trust and breaks the hearts of her boss and coworkers by stealing vast amounts of money to finance a hobby that’s overtaken her life. Trisha Clemens of Sterling was sentenced Tuesday to 6 years in prison, and ordered to pay $400,000 in restitution, plus fines and fees, in two felony theft cases. With day-for-day credit, she could be out and paying her tab by March 2021. It’s a big one: That’s $291,153.45 she owes Sterling law firm Miller & Lancaster, for stealing deposits, not reporting cash payments, and writing checks for herself and her credit card bills from Dec. 3, 2007, through May 18, 2015, and $108,793 she must pay famed fantasy author and Sterling native Terry Brooks, whose comic book collection, stored at the firm, she ransacked and sold piecemeal. Clemens, who had hoped for 4 years’ probation, cited an online gambling addiction and alcohol abuse.

Fulton woman faces 20 years for national casino fraud scheme

Wang faces two to 20 years in prison and up to $500,000 in fines. Her case was the product of a joint investigation by the FBI and California’s Bureau of Gambling Control. Wang and a co-defendant — Frank Luo, 49, of Las Vegas — participated in a scheme to defraud casinos and credit card companies across the country. The scheme involved using the names and social security numbers of migrant workers to apply for casino credit and to open credit card accounts. Casino credit — also called a “marker” — is a cash advance provided by a casino to a patron, and it is often secured by a check from the patron’s bank account, according to the U.S. Attorney’s Office. Initially, Wang and Luo paid off several of these “markers” on time to give the impression of “credit worthiness” to casinos and credit card companies, the U.S. Attorney’s Office said. But then Wang and Luo recruited “clients” to participate in the scheme to induce the casinos and credit card companies to part with even more money under fraudulent pretenses. Wang and others working with her coordinated their gambling activity to give the appearance of losing money, which encouraged the casinos to issue future “markers,” the U.S. Attorney’s Office said. The investigation found that one schemer would “lose” money while another would gain the same.

Ex-employee sentenced to prison for embezzling $500K from Tucson auto dealership

A former employee of Chapman Honda was sentenced to 15 months in federal prison for embezzling $500,000 from the auto dealer. Brenda Reiko Bryan pleaded guilty in July to two counts of wire fraud, according to court documents filed in U.S. District Court in Tucson. Prosecutors said she spent nearly six years forging signatures, depositing Chapman Automotive Group checks into her bank accounts, and using company checks to pay her bills. Judge Rosemary Marquez on Tuesday also ordered Bryan to pay back the $514,000 she embezzled from 2007 to 2013, court records show. Bryan used the money to pay her auto loan student loans, travel, gambling, her daughter’s wedding, and to pay off her credit cards and those of her family members, federal prosecutor Jane Westby wrote in a sentencing memorandum.

Man sentenced to prison for running illegal sports betting ring

A man who ran an international bookmaking operation out of the Lucky Lady Casino and Card Room in San Diego was sentenced Monday to about three years in prison, the U.S. Attorney’s Office said. Sanders Segal, 66, pleaded guilty to racketeering conspiracy in San Diego federal court on Aug. 29. In addition to serving a 37-month prison sentence, Segal was ordered to pay about $222,000 in criminal forfeiture for the proceeds he made from bookmaking, money laundering and collecting illegal bets, prosecutors said. In his plea agreement, Segal admitted he oversaw Segal’s Lucky Lady Sports Book from 2013 to 2016, directing associates to place illegal sports bets on overseas gambling sites on behalf of customers in the U.S. The sites were in places such as Costa Rica, the United Kingdom and Hong Kong. The bookmaking operation, which used the licensed casino on El Cajon Boulevard as a front, generated nearly $1 million in profits, authorities said. Segal admitted he received 10 percent of the profits in the enterprise.

Michigan woman admits to embezzling $1.9M

A Michigan woman has admitted to embezzling more than $1.9 million from her employer and tax evasion after being charged in federal court. Lori Lynn Pawielski of Buchanan has been charged with attempting to evade or defeat tax from 2009 to 2015. Pawielski has agreed to plead guilty to the tax evasion charge, and in return will not be charged with embezzlement. In a signed plea agreement filed with the Western District of Michigan federal court, Pawielski admitted to embezzling $1,962,611 from her former employer over the span of seven years. She wrote 271 checks to herself without her employer’s knowledge. Pawielski then used that money for personal use, including gambling at a casino.

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Seminole Compact Deal Seems Unlikely Given Florida Legislators are Shifting Full Focus to the Parkland School Shooting

Casino Watch Focus has reported on the ongoing efforts to fully renew the Seminole Gambling Compact and officially lock in various gambling exclusivity agreements with the Tribe, the most prominent being designated player card games.  Recent legislation was proposed and pushed that was an attempt to allow exclusive deals for the Seminoles at their casinos, while allowing para-mutuel operators to offer designated player games and even end greyhound racing. The Sun-Sentinel reports:

The Florida Legislature is showing its hand in another attempt to bring the Seminole Tribe into a new, lucrative gambling agreement with the state.

Th new deal would potentially end greyhound racing, bring craps and roulette to Seminole casinos and allow designated-player games.

Under a draft agreement the tribe has shown several state lawmakers, it would now be willing to consider designated-player games and fantasy sports leagues such as FanDuel and DraftKing, both of which it had previously said were in violation of its agreement with the state.

Given the court appointed deadlines and Amendment 3, which seems likely to pass and would take the power away from the legislators and into the hands of the people, this was viewed as the key time to strike a deal. An online source explains:

The first deadline is a 2015 federal court order that allows the Seminoles to stop making $250 million in annual revenue-sharing payments to the state by the end of March if lawmakers don’t curtail the growth of ”designated player” games, a hybrid of poker and blackjack, in cardrooms across Florida. The next comes in November when voters are presented with a proposed “No Casinos” constitutional amendment that would require 60 percent approval of a ballot measure to expand gambling, essentially removing legislators from the decision-making process regarding casinos. Therefore, if lawmakers are to make significant changes to gambling regulations and renew the state’s gaming compact with the Seminole Tribe, the time to do so is now or, maybe, it will be never.

The Senate Finance and Tax Appropriations Subcommittee approved a 90-page gambling bill earlier this week that gives the Seminole Tribe of Florida’s seven casinos the exclusive right to offer craps and roulette while allowing pari-mutuel facilities statewide to run “designated player” card games.

As it turns out, however, the timeline has become even more doubtful given the tragic Parkland school shooting. The Florida legislature is wisely shifting focus to discuss and address potential solutions to help protect Florida families from similar future tragedies. The budget also needs to be passed, so the window for gambling appears to be rapidly closing.   An online source explains: 

The Florida high school shooting that left 17 people dead last week has another potential casualty—the state’s gambling legislation.

Florida Politics reported that Florida’s gambling bill is on life support after legislators decided to shelve all pending bills on their desks in order to prioritize a legislative response to the February 14 mass shooting at the Marjory Stoneman Douglas High School in Broward County.

With only three weeks left in the 2018 legislative session, legislators are scrambling to enact a law that will allocate $100 million funding for the state’s mental health screening, counseling and training, and the “hardening” of Florida schools.

After passing the bill, lawmakers will then need to squeeze in discussions on the state budget within a limited time. With their hands full, Florida House Speaker-designate José Oliva is much less optimistic that they will get something done on gambling in the next three weeks.

“A lot of our bandwidth is going to be taken up,” Oliva said, according to FloridaPolitics.com. “We still have a budget to pass, and obviously we’ve got some sort of bipartisan bill that we have to pass dealing with the tragedy at Stoneman Douglas.”

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Hawaii Proposes 4 New Anti-Gambling Bills against Video Game Loot Boxes and US Senator Pressures ESRB for Industry Ratings and Regulation

Casino Watch Focus has reported on the discovery and evolution of gambling-esque loot boxes in video games and the legislative response to such predatory practices. Loot boxes are a type of micro-transaction where a video game player spends real money to open a box or chest in a video game, and hopefully win a valuable prize. If this sounds an awful lot like slot machines, then you’re thinking the same as countless fans, journalists and now legislators that are worried about he addictive and predatory nature of such a mechanic, especially when kids freely play these games. Hawaii legislator Chris Lee has lead the charge to hold the video game accountable and many others have taken note. As promised, Hawaii has now released 4 new bills that seek to regulate these predatory micro-transactions. An online source reports: 

Four new bills have been introduced in the past month that target the sale of games that sell loot boxes for real money. Two of the bills would prohibit developers from selling games with randomized loot box reward systems to anyone under the age of 21. The other two would require developers to label games that use randomized loot box systems /and/ to disclose loot box drop rates.

Developers would be forced to label games should they include “in-game purchases and gambling-like mechanisms which may be harmful or addictive,” according to the bill. A game purchased online would have to include this information on the game’s art. 

“Whistle-blowers have revealed that psychologists are employed to create these mechanisms,” Lee told the Hawaii Tribune. “If enough of the market reacts, the industry would have to respond and change its practices.” Lee said that more than half of the states in the United States are looking intro legislation regarding the sale of loot boxes in video games. Loot box regulation has already begun overseas as well. In 2016, China passed legislation that requires all developers to publish its loot box odds. Likewise, the Belgium Gaming Commission has deemed loot boxes “dangerous.”

Lee has been pushing the industry to impose its own common sense legislation. The ESRB is the rating system used within the industry and as of now, they are unwilling to view loot boxes as gambling and thus, they haven’t been willing to take the matter seriously or regulate from within. During a normal public meeting about the bills, lobbyist from the Entertainment Software Association, the industries trade group and regulators of the ESRB rating system, flew out to participate in the Q&A. They were unable to answer, justify or address some of the most basic concerns raised by Lee. It was objectively a very terrible showing for the industry. You can find the full video and update on Lee’s direct YouTube channel HERE (Loot box update begins at 2:37 and the questioning begins at 7:00).

Moreover, in addition to large number of states that are looking into similar legislation, these predatory gambling practices have now caught the attention of the US Senate, specifically Senator Maggie Hassan. She has questioned the FTC and wrote a letter directly to the ESRB. Forbes reports: 

This week, Hassan asked four FTC nominees the question: “That children being addicted to gaming — and activities like loot boxes that might make them more susceptible to addiction — is a problem that merits attention?” To which all four responded yes, it was something they would look into. But past that, Hassan wrote a lengthy letter to Patricia Vance, president of the ESRB citing that the issue of loot boxes was brought to her attention by a constituent. 

“While there is robust debate over whether loot boxes should be considered gambling, the fact that they are both expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny,” Hassan’s letter says. “At minimum, the rating system should denote when loot boxes are utilized in physical copies of electronic games.”

The fact that Hassan is a US Senator, not a state senator, is important, as this could end up leading to her proposing federal legislation about this issue, rather than individual states doing it.

The powerful letter can be read in its entirety at Forbes HERE 

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UPDATE: Gambling-esque Loot Boxes in Video Games Face Regulatory Measures & Studies from Governments like Hawaii and Private Companies like Apple, but are they Actually Harmful?

Casino Watch Focus has reported on the newly covered, gambling type video game items known as loot boxes. The boxes are purchasable in a video game and they provide random loot, or in game merchandise, much like a slot machine. This system of microtransactions came to light because EA pushed the envelope so far in their new Disney licensed Star Wars video game, that the only way to truly progress in the game or have the tools to win was to buy these loot boxes and gamble on the items you would get. The system is designed for the player to buy boxes, open them and chase after the best loot. Players pushed back, mainstream media picked up the issue, Disney had to get involve and make EA pull the gambling system from the game and legislators started looking into the issue. Hawaii legislators came out very strongly against the idea of exposing children to such psychologically manipulative, gambling type systems and called the game a Star Wars themed online casino. Its no surprise that a few weeks later and Hawaii legislators are now drafting legislation and working with other states and the industry itself to regulate the issue.   Gaming publication Kotaku reports:

A Hawaii in which games with microtransactions are illegal for minors to purchase is one that state legislator Chris Lee is now hoping to realize. He says that prohibiting the sale of games with loot boxes is a “no-brainer,” and along with a dozen other politicians, he says, he’s thinking of how to put legal controls around video game microtransactions. 

Over the course of a few months, Lee had been hearing from local teachers about kids who struggled with the temptation to spend beyond their means in game microtransactions. Lee cited one conversation about a kid who, he heard, had stolen their parents’ credit card to pay for their gaming habit. He says several families reached out about spending thousands of dollars on microtransactions.

“Gambling has been illegal especially for minors and young adults because they are psychologically vulnerable,” he told me, adding that kids “often don’t have the cognitive maturity to make appropriate decisions when exposed to these kinds of exploitative mechanisms.” 

“There’s no transparency at the outset of what they’re getting into,” he said. “That’s something I think is a real concern.” Now, Lee is working to prevent the sale of games containing loot boxes to gamers under 21 in Hawaii. He also wants games to disclose up-front whether they have “gambling-based mechanics” and to publicize the odds of winning various items in loot boxes.

Apple Inc. certainly agrees with Lee that the odds of winning various items need to be disclosed to gamers. Falling in line with what other foreign governments like China Korea, Apple is now requiring game companies to publicize the odds. Venture Beats explains:

Apple quietly updated its rules for developers yesterday with a new version of its App Store Review Guidelines, and it now requires that developers disclose the odds of getting cool loot in the loot boxes for free-to-play games.

Loot boxes have become a big monetization opportunity in free-to-play games, but they’re also controversial, as Electronic Arts’ discovered with tying loot crate purchases to unlocking desirable characters like Darth Vader in Star Wars: Battlefront II. Gamers revolted, and EA backed off. Government officials also started to step in to say that loot crates should be regulated, as they can be perceived as ripping off consumers or even as gambling.

Apple is clearly trying to get ahead of any regulatory problem by requiring that developers now disclose proper information.

But those in the gaming industry don’t believe loot boxes are gambling. Not only have individual companies gone on record to say they are perfectly fine, the ESRB, the self-regulated industry body who labels games by age range, came out and said they didn’t believe they were gambling and they certainly haven’t proposed any regulatory measures to help protect consumers against the predatory nature of microtransactions. Those fighting against loot boxes aren’t simply looking at antidotal evidence either. The UK’s Gambling Commission just released a report with rather shocking evidence of children as young as 11 being preyed upon and possibly lead into gambling addiction. Dr. Mark Griffiths, Professor of Behavioral Addiction at Nottingham Trent University explains:

Last week, the Gambling Commission’s annual report found that children as young as 11 years of age are “skin gambling” online – paying money for the chance to win in-game virtual items. But this, while alarming, is just the tip of the iceberg.

It’s the terrifying phenomenon of “loot boxes” that are the most worrying and potentially dangerous aspect of e-gaming for children right now. “Loot boxes” are everywhere – they are otherwise known as crates, chests, cases, bundles, and card packs.

In FIFA Ultimate Team, for example, players can purchase gold, silver or bronze card packs, either using in-game currency or real money, in the hope of getting their hands on top talent to improve their teams. But there’s no guarantee of landing A-listers like Ronaldo or Messi – the cards won’t all be star players and will more likely be less valuable collectables.

The issue is that the buying of crates or loot boxes is a form of gambling because players, often children, are being asked to buy something of financial value that could end up being of lower financial value than the amount they paid. 

The good thing is parents are now hearing about things like “skin gambling” and “loot boxes” but children also need to be educated about these activities as much as drinking, drugs or the risks of underage sex. Parents need to get to grips with what is going on in their children’s worlds.

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