Clamp Down On Loot Boxes Expected Due To Child Gambling Risks

The days in which video game players only had to spend money buying the game that they wish to play are long gone. Instead, game-makers have found ways to monetise the experience of playing games, with users asked to spend money buying so-called loot boxes in order to further expand the games.

The idea was first mooted in 2005 when Microsoft introduced the Xbox Live Marketplace, in which players could spend small amounts of money in order to buy content for the games that they were playing.

Since then it has grown and grown as an industry, with Take-Two Interactive admitting that in 2017 42% of the company’s entire revenue stream came not from the sale of games but rather from ‘recurrent spending’, or loot box purchases.

Back then the company’s CEO declared that that would be the future for all of their games, but by heading down that path the likes of Take-Two Interactive, their parent company Rockstar Games and other game manufacturers have put themselves inline for public scrutiny.

What Are Loot Boxes?

Loot boxes, which are also known as prize crates, are consumable items that can be bought when playing computer games. Users buy a box containing random selections of ‘loot’ that can be used to customise their gaming experience.

They have become a popular feature of video games as they can offer game-makers an additional source of income once people have already bought the game itself. However, they have also become a controversial issue, with many believing that they should be considered to be gambling.

One such example is loot boxes offered in the football game FIFA, by EA Sports. Users purchase Packs, which contain special players like Lionel Messi or Mohamed Salah, which can then be used in teams in the online mode of the game. Rather than inform people which players feature in the Packs, however, users don’t find out who they have bought until they’ve already spent their money.

This can lead to people spending hundreds of pounds in the search for the player that they most want, often remaining disappointed at the end of it all.  Many would class this as a form of gambling.

Is It Gambling?

One of the key questions that has faced game-makers, legislators and MPs in recent months is whether or not loot boxes should be considered to be gambling.

The United Kingdom Gambling Commission informed a panel of MPs that they did not believe that to be the case because the boxes hold no actual monetary value. In order to fall under gambling legislature something must either be with money or be actual physical money, which isn’t the case with loot boxes. Even so, EA Sports have admitted that there are many secondary markets that allow users to sell the goods they ‘won’ in loot boxes for real cash, complicating the matter.

The UKGC’s take on the matter was not shared by the Belgian Gambling Commission, however. They decided to ban loot boxes back in 2018, declaring that they violated the country’s gambling legislation.

It also wasn’t enough to persuade Members of Parliament to ignore the links between loot boxes and gambling related harm. Indeed, MPs decided that loot boxes should be banned altogether as far as children are concerned, feeling that industry representatives that were called to speak before them lacked transparency and refused to accept any responsibility. That follows moves in America, where a Republican senator introduced the ‘Protecting Children From Abusive Games’ bill.

Why It’s A Problem

The link between young people and gambling has been making headlines more and more in recent times, which is why the issue surrounding whether or not loot boxes should technically be classed as gambling is such a big issue. Whilst people of all ages can obviously play on computers and computer games, they are typically marketed at younger players.

That’s a problem because young people are more susceptible to the damage of gambling, which is why the argument around whether or not loot boxes count as gambling is such an important one. With the Gambling Commission saying that children as young as 11 have gambled online, it’s crucial to protect vulnerable people as much as possible.

Loot boxes took centre-stage in the conversation in Belgium in 2017 when Star Wars Battlefront II was released there and major characters such as Darth Vader and Princess Leia were only available through buying them. There was such a backlash over it that EA suspended the purchase of in-game features in the country, eventually leading to them being banned altogether in the country.

Loot boxes still exist there, but they’re won as rewards for gameplay rather than bought with real cash. There was little issue for gamers in the country when they were outlawed, many of whom felt that they were ‘dishonest’.

Children’s Commissioner Wants A Crackdown

The most recent bit of news to emerge around the world of loot boxes is that Anne Longfield, the Children’s Commissioner for England, has said that tighter legislation is necessary in order to protect young people playing the various video games. As well as hoping that the current law will be amended to mean that the boxes are classified as gambling, Longfield also believes that a maximum daily spending limit should be introduced in order to curb excessive spending by people in-game.

That comes of the back of news that children and young people often end up spending hundreds of pounds in order to try to advance where they’re up to in games and keep up with their friends.

Writing in a report entitled Gaming The System, the Commissioner revealed that some children fear that they are addicted to gaming and don’t feel in control of how often they’re playing on their computers. With more than 90% of children in the UK playing video games such as Fortnite, Minecraft and FIFA, it’s easy to see why it’s becoming more and more of an issue with every passing week.

Whilst Longfield did readily admit that children can form friendships and develop their strategic thinking by playing online, she also pointed out that games companies are currently free to exploit vulnerable people playing online.

Upcoming Legislation Is Perfect Time To Make Change

The Children’s Commissioner believes that the upcoming online harms legislation being introduced by the government is the perfect time to make changes that would protect children. Section 6 of the Gambling Act of 2005 is the part of the Act that outlines the definition of gaming, with Longfield believing that it gives the government the opportunity to alter that Section and ensure that children and vulnerable people are protected accordingly.

MPs on the Digital, Culture, Media and Sport Committee agree with her, having previously said that they think that loot boxes should be considered to be gambling.

Jo Twist, the Chief Executive of UK Interactive Entertainment, which is the country’s trade body for the video game industry, said: “We recognise the need to educate players, parents and carers about safe and sensible play habits and for the industry to take an appropriate role in doing so”.

Longfield, meanwhile, feels that games played and distributed online should be subject to a ‘legally enforceable age-rating system’, which is already in place for physical games bought from shops and so on. If games then allow for in-game spending then the Commissioner believes that they should be subject to additional warnings.