More than 400,000 British teenagers have been lured into under-aged casino-style gambling through their video gaming, an investigation has revealed.

The children, aged 13 to 18, have been able to gamble winnings from their video gaming on websites where they can bet them for cash on roulette wheel spins or other games of chance.

The online gambling, which is illegal for under 18s, has been made possible by the creation of virtual items called "skins", modified weapons or costumes that players can win or buy in video games.

Now Parent Zone, an advice service for parents and schools, is demanding urgent action to close the loophole that allows skins to serve as a digital currency that can be gambled and cashed out.

Giles Milton, Parent Zone’s head of content, said its investigation showed gaming firms were not doing enough to stop it: “It is gambling and children should not be gambling online. Parents need to understand what their children are doing with their money.”

There are concerns the trade in skins – of which there are 6bn in circulation worth an estimated £10bn – could itself be fuelling the rise in addictive gaming among teenagers.

This month the World Health Organisation (WHO) classified gaming addiction as a medical disorder treatable on the NHS. The Telegraph is campaigning for a statutory Duty of Care on gaming and social media firms making them legally responsible for protecting children from harms.

The scale of skins betting is exposed by an Ipsos MORI poll for Parent Zone which found 10 per cent of 13-18 year-olds admitted gambling on unregulated casino, esports betting or mystery box games, equivalent to almost 450,000 teenagers.

More than a quarter (27 per cent) had heard of skins gambling, and 29 per cent thought it was a “very big” or “fairly big” problem for under 18s.

Despite age-verification procedures to keep under 18s off some gaming and gambling sites, the poll found 46 per cent said they were able to freely access 18-plus sites if they wanted.

One teenager claimed to Parent Zone to have amassed £2,000 worth of skins before blowing it all on a gambling site. 

A 14-year-old told of a 15 year-old friend collecting £1,000 of skins before trying skins gambling. “He lost [money twice] and wanted to get his £10 back. He ended up winning £750 but he’s really addicted to it,” he said.

Another boy, 13, said: “You can lose loads of money on [the gambling websites]. It’s basically just gambling, they just cover it up…cos you use the skins instead of currency.”

A boy, 13, said: “I’ve got my own bank account so whatever money is in there [my parents] don’t really ask – I just spend it. There’s loads of £2/£3 micro-transactions that I do all the time...They know that I’m spending it, just they don’t know what on.”

Skins, so called because they modify the appearance of in-game objects such as guns and characters, can be bought or earned on Steam, a widely-used gaming platform that lets users trade them to each other for a dollar or sterling value which can be used to buy more skins or other games. 

That balance cannot be withdrawn, but unaffiliated websites – sometimes falsely branded with Steam’s logo and with lax checks on age – let users wager their skins on virtual casino games or professional video game matches and cash out the proceeds.

Mr Milton said: “Steam has an anything goes policy. It allows sites to connect code so that skins can be transferred out. Steam says it’s the third party’s fault and has issued cease and desist orders but it is not doing enough.”

Lauren Foye, of Juniper market analysts, said new measures by Steam’s owner Valve, including a seven-day freeze on trading new items, had shrunk the value of skins gambled from £3.7bn in 2016 to £316m in 2017.

But she said many sites easily adapted to the new rules and that Valve itself had paved the way for them by creating the skins market in the first place: “Steam is gaining up to 5 per cent commission per item traded. It’s a considerable market for them, which is why they’re not really cracking down on it.”

Most of the virtual items traded on Steam and other games come from “loot boxes”, digital reward packages bought for real money. They are banned in Belgium and regulated in China and Japan because their unpredictable rewards make them addictive like slot machines.

Mark Griffiths, professor of behavioural addiction at Nottingham Trent University, said loot boxes had all the attributes of gambling: “All my research shows that the earlier you start gambling, the more likely you are to continue gambling into your adulthood. The video game industry needs to take more responsibility in terms of a duty of care..”

The Gambling Commission said most loot boxes are not gambling because their prizes cannot be exchanged for money, but said they may still “pose risks to young people”.

A spokesman told the Telegraph: “Where in-game items that are derived from loot boxes can be readily exchanged for cash, the loot boxes themselves are likely to fall within the definition of gambling.

“Whilst Valve are not licensed and regulated by us we have shared our concerns with the company and expect them to be actively enforcing the terms of their user agreement. Failure to do so risks elements of their games being classified as gambling.”

Valve said it has no relationship with skin gambling sites and regularly acts to prevent the activity, citing a recent shut-down of Steam accounts associated with OPSkins, a skin trading and cash-out website.

To read and download the full report, please visit www.parentzone.org.uk/skingambling

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