There has been a raging debate in many quarters on whether loot boxes are gambling. If you have been around the latest online games for the past five years, chances are you have come across a loot box. Now, whenever such a question is asked, you are bound to get a plethora of responses in both directions. Recently, concerns have been raised in the highest levels of government on this technology. So what are loot boxes and what is it about them that has garnered so much interest? This article seeks to unpack these issues.
What are Loot Boxes?
So what is a loot box, anyway? Well, the quick answer is it’s an in-game purchase. It usually features the form of a virtual box-shaped container. You buy these boxes because they contain virtual items that you can use in the game. You don’t know what you are buying, you can only see what you get after you have made the purchase and opened the box. Game manufacturers came up with this idea as a way of generating revenue from their games. What used to happen was people would just get one video game. They would then copy and share amongst themselves, cheating suppliers out of revenue.
Similarities to Gambling
So why would anyone equate loot boxes to gambling? We’ll tell you right now; the evidence makes a very strong case. Before we proceed, you need to understand what is gambling. Defined simply, this is when you engage in a game of chance hoping to get a reward. In slots games, many players are gambling to win real money. To take part, the casino requires that you place wagers, and maybe if you are lucky you’ll win more or even hit the jackpot. You must admit, the language used in loot boxes and casino gambling sounds very similar.
Countries That Have Banned Loot Boxes
Loot boxes have received much attention of late and for all the wrong reasons. In the UK, a 2019 report highlighted the harms that come from the use of loot boxes in video games. In the report, which is titled Gaming the System, the Children’s Commissioner cast a grim picture. The focus was on how loot boxes gave minors the impression that they are gambling. Other European countries also conducted their research and compiled scathing reports. After finding that loot boxes are in violation of their gambling laws, these countries took swift action. The Dutch Gaming Authority and the Belgium Gaming Commission banned the use of loot boxes in games.
The House of Lords Gambling Committee
The UK government seems to be eyeing the gaming industry and its insistence on using loot boxes. Removing all ambiguity, the House of Lords suggested that loot boxes should be deemed as games of chance. In its 2020 report, the committee advised that regulation of loot boxes was a matter of urgency and could not be delayed. This action has many repercussions for all stakeholders of the video gaming industry. Loot boxes would now have to be regulated under the Gambling Act of 2005. But if history is anything to go by, this is easier said than done. Take Gamstop, for example. Players who are listed can side-step the UK self-exclusion scheme by registering on non UK casinos
The Defendants: EA Sports and other Game Providers
Game developers have not taken the entire issue lying down. They have tried to put up a case for their defense. One of the chief arguments which have been floating around is that since loot boxes are not giving you cash, then it cannot be defined as gambling. The textbook definition of gambling does imply that you should be receiving cash rewards. But this stance does not carry much credence. The internet is awash with exclusive loot box merchandise which is being sold for cash. The committee was also quick to point this out.
So loot boxes do lend themselves towards gambling. The jury might still be out on whether tough measures will be instituted on loot box game manufacturers. But it seems the calls for regulation are growing louder by the day. Politicians from Europe to the United States are making the case against what they are calling “the exploitation of minors”.
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