The loot box rewards popular in many games are not gambling and current UK legislation as they cannot be officially monetised, the Gambling Commission has said.
A prize needs to have direct monetary value for it to be classified under UK gambling legislation, and whilst players do buy and sell in-game content on secondary grey markets, that does not officially make loot boxes a form gambling. Gambling Commission programme director Brad Enright admits “There is unquestionably a demand for a secondary market”, but maintains that a whilst developers like EA face a “constant battle” against these unauthorised markets, as long as they do not create such a market themselves then the loot boxes they sell are not covered by the current gambling legislation.
A number of parents have raised concerns about the prevalence of loot boxes in modern video games, with some children reported to spend hundreds of pounds on such purchases promoted within popular titles such as football team management game Fifa. As gamers buy player packs in Fifa or weapons or costume packs within other games without first knowing the content of those bundles, there is an element of chance that many would consider such purchases gambling.
Speaking to the Department for Culture, Media and Sport (DCMS) Select Committee, Gambling Commission chief executive Neil McArthur, said: “There are other examples of things that look and feel like gambling that legislation tells you are not—[such as]some prize competitions but because they have free play or free entry they are not gambling… but they are a lot like a lottery.”
If EA was forced to adhere to UK gambling laws, they would be forced to follow officially licensed online gaming firms like Casumo casino and offer simple ways for players to limit their spending, find support, and keep minors safe. They would also face limits on how and where they can advertise, which could cause difficulties with the launch of games like Fifa that have long been popular with all age groups.
In November 2018, the UK Gambling Commission published a report that said nearly a third of youngsters polled had opened at least one video game loot box. However, due to the profitability of loot boxes to developers and distributors, it is likely that this number has only risen over the last six months and will continue to do so unless it is addressed by the likes of Valve or the various games stores from Apple, Google, Sony, and Microsoft.
The DCMS Select Committee is currently examining immersive and addictive technologies, but governments elsewhere have already acted to clamp down on loot boxes. In April 2018, authorities in both the Netherland and Belgium officially banned loot boxes entirely as it found them in contravention of its gambling legislation after an investigation into Fifa 18, Overwatch, Counter-Strike: Global Offensive and Star Wars Battlefront II. In its report, authorities paid particular attention to a post on community news website Reddit where an EA spokesman called in-game micro-transactions like loot boxes a way to “provide players with a sense of pride and accomplishment for unlocking different heroes”. The post quickly made Reddit history as the most unpopular comment of all time on the site, with over 6.5m downvotes.
Outside the EU, in Australia the Victorian Commission for Gambling and Liquor Regulation has said it considers loot boxes to be a form of gambling, but as it does not have the authority to prosecute companies registered overseas instead urged Canberra to issue all games that offer loot boxes with an immediate “R rating”.