Updated: Jun 20, 2022
The convergence of gaming and gambling presents unique challenges for young people. The digital age means gambling is thriving, as technology can manifest in new ways with new intersections between gambling platforms and other digital media technologies. 
What is simulated gambling?
Simulated gambling is a common feature of many video games and involves an “interactive gambling activity which does not directly involve monetary gain but is otherwise structurally identical to a standard format of a gambling activity due to its wagering features and chance-determined outcomes of play”.  In short, the player experience is fundamentally the same as a real gambling application, except without real money being bet.
In many mainstream video games, there are gambling elements, often in the style of in-game casinos one can visit. This has occurred in games across genres, including Grand Theft Auto, Fallout:New Vegas and even Pokémon. While not all representations of in-game gambling are purely positive, with more notable criticisms of casinos and gambling in some video games, such as Red Dead Redemption 2 exploring the consequences of gambling addiction on non-player characters, the game mechanics in these games where the player gambles are still designed to be “fun” for the player.
To make these games of chance in otherwise skill-based games appealing, they may employ game mechanics such as a “Luck” statistic, or a minigame in which you must correctly time a button press, which can misrepresent real gambling as more skill-based than it really is. Often, the odds of winning a bet or a game in a video game are much higher than in real-life casinos or on gambling applications, which can skew player perception of gambling. In addition, in these games, players can save before each wager, and reset if they lose. Though not all representations of gambling in video games are equally addictive or positive for the player, all have the potential to cause a development in interest in gambling.
Simulated gambling in video games extends to a whole genre of dedicated casino-style games, which involve no real-life transactions, but offer a similar experience to online casinos which do involve gambling. These include “free-to-play” online casinos. These simulated gambling apps are often hosted and advertised on social media, which plays into the exposure effect and social response aspect of gambling – people are more likely to engage if their peers are also involved.  According to Gambling Commission 2019 data using a sample of 2943 young people, 12% of 11-16 year olds have said they had played an online gambling-style game, almost half of which did so through an app. 
These apps may be made by the same developers and owned by the same companies which develop real-money gambling applications, and indeed, the two may be one of the same, via the use of “demo modes”, a free “demonstration” of a gambling application which uses real money. Demo modes for online casinos are also a major form of youth gambling. In the same survey, 29% of young people who had gambled said they had previously used demo modes of online casinos.  Age checks are often not in place in online casino apps, and if they are, children may use their parent’s accounts or other methods to bypass the age restriction.
Effects of simulated gambling
According to research, simulated gambling exposure may be more likely to have negative consequences for youth gambling when different criteria are met.  Among other factors, if a simulated gambling application or game facilitates entry into a gambling subculture, providing social incentives to gamble, and encouraging covert gambling, the exposure is more likely to be considered harmful. Additionally, if the player experiences early wins, is enabled to engage in intense playstyles, and has misconceptions and false beliefs about the nature of gambling odds and skill levels, this is also harmful exposure. Simulated gambling may be beneficial as a part of gambling education if the player experiences normal win-loss outcomes and it is modelled as an educational experience with minimal extrinsic feedback.
Based on these criteria, there are different levels of harmful exposure in video games; and the worst offenders are the dedicated casino-style gambling applications, which often exhibit skewed outcomes that favour the player and are designed to encourage players to keep playing in order to make money, either because they rely on making money through advertising or because they are closely linked to true gambling applications. Though the simulated gambling in more mainstream video games meets less of these criteria, and there are opportunities for gambling experiences to be more educational in these regards, we believe that exposure in some video games may have an overall negative effect.
According to the ESRB‘s (Entertainment Software Rating Board) criteria, simulated gambling mechanics are considered appropriate for players aged 13 and up. We believe that this is unsatisfactory, as the links between simulated gambling and gambling behaviours with real money should not be downplayed. Gambling in real life situations has a much higher age limit, and exposure of adolescents, especially in situations where they feel compelled to gamble in these simulated environments, is likely to result in later issues for some people. 
For more information on gambling in video games and its effects, please read our pieces on loot boxes and on online skin betting.
King D, Delfabbro P, Griffiths M. The convergence of gambling and digital media: Implications for gambling in young people. Journal of Gambling Studies. 2010 Jun 1;26(2):175-87. King, D.L., Delfabbro, P.H., Kaptsis, D. and Zwaans, T., 2014. Adolescent simulated gambling via digital and social media: An emerging problem. Computers in Human Behavior, 31, pp.305-313. Armstrong, T., Rockloff, M., Browne, M. and Li, E., 2018. An exploration of how simulated gambling games may promote gambling with money. Journal of Gambling Studies, 34(4), pp.1165-1184. Young People Gambling Report 2019 (cliftondavies.com) Wood RT, Griffiths MD. A qualitative investigation of problem gambling as an escape‐based coping strategy. Psychology and Psychotherapy: theory, research and practice. 2007 Mar;80(1):107-25. King, D.L. and Delfabbro, P.H., 2016. Early exposure to digital simulated gambling: A review and conceptual model. Computers in Human Behavior, 55, pp.198-206. Kushner, M., Thurus, P., Sletten, S., Frye, B., Abrams, K., Adson, D., Van Demark, J., Maurer, E. and Donahue, C., 2008. Urge to gamble in a simulated gambling environment. Journal of Gambling Studies, 24(2), pp.219-227.