Gambling in Video Games – Loot Boxes
There is news regarding the dealing with Loot Boxes in Video Games. A few days ago the UK MP stated that in their opinion the use of Loot Boxes should be banned for children and that Loot Boxes are gambling and should be regulated according to the UK Gambling Act.
What are Loot Boxes?
A Loot Box is a virtual box in Computer Games that contains a random collection of certain items, such as weapons, ammunition or other special items. Loot boxes can be unlocked, found or purchased in-game. The purchase is made either in player currency or in real money.
Since the purchase of Loot Boxes usually gives the player an advantage, they are often purchased.
Criticism and Problems of the Loot-Box-Systems
The purchase of Loot Boxes involves two major problems:
1) The use of Loot Boxes is often criticized for pushing so-called “pay-to-win systems”. These are free-to-play games, which are basically played without any additional real money, but cost a lot of time, are very difficult to win with free money or offer a disadvantage in competition. Sometimes the providers go so far that essential items can only be offered for real money. In this case, the term “pay-to-win” is clearly used.
Therefore the purchase of Loot Boxes offers in most cases an unlawful advantage to the other players.
2) Because of the natural competitive spirit of the gamers, the players always try to be better than their opponents. By buying Loot Boxes it is possible to gain an advantage over opponents who have not bought a Loot Box. This may increase the need for some players to buy more and more. Critics talk about a considerable risk of addiction and compare the Loot Box system with gambling.
In one case, the UK Committee heard that a player had spent up to 1000 pounds per year on Loot Box mechanisms in EA FIFA.
In another case, a player’s parents came forward and reported that their adult son had incurred debts of 50,000 pounds through microtransactions in the online game RuneScape. The game’s developer, Jagex, reported to the committee that players could potentially spend up to £1,000 a week or £5,000 a month.
Global Comparison of Loot-Box-Regulations
a) Netherlands and Belgium
Especially in the year 2018 there were court decisions, which stated that some, but not all Loot Boxes violate the existing gambling laws.
EA deny the judgments and wants to proceed with the sale of Loot Boxes. However, the Belgian public prosecutor started an official investigation to investigate whether EA was involved in illegal activities.
2K has informed customers that in the future, optimisations could be made for real money purchases within the NBA 2K game to ensure compliance with legal requirements.
Blizzard has decided to eliminate the possibility of buying Loot Boxes with real money for some games in order to meet the requirements.
b) China and South Korea
In China and South Korea, it is already mandatory for any video game developer who sells Loot Boxes in their games to reveal the percentage chance of receiving a reward. China also passed a tough regulation in 2017 prohibiting the sale of virtual lottery tickets.
A 2018 study found that Loot Boxing is psychologically similar to gambling, especially among young people. The study recommends that games with Loot Boxes contain a warning notice and that their sale be restricted to people over the age of 18. These recommendations have not yet been transformed into legislation.
Due to the latest events and the opinion of MP UK that Loot Boxes are to be classified as gambling and not for sale to young gamers, it is likely that there will be changes in legislation in the near future.
e) The US and Canada
The US has not yet issued any formal regulations that specifically regulate the sale of Loot Boxes. However, some states have taken further steps.
The state of Washington is working to investigate the problem. In the state of Minnesota, a law has been introduced prohibiting the sale of games that offer loot boxes for real money to anyone under the age of 18.
In May 2019, a Senator introduced a law called “The Protecting Children from Abusive Games Act” that prohibits pay-to-win microtransactions and loot boxes for video games sold in the US.
As far as I know, there is no law in Canada that regulates the sale of Loot Boxes.
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