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A guide to loot boxes and their place in the gambling industry

Published by Stelly | February 26, 2023 | Last updated: April 23, 2023

For online casino players, improving technology brings the excitement of a world that combines video games and gambling. But in the world of video games, the combination of regular video games and possible gambling might just be taboo.

What happens when beloved loot boxes suddenly turn from a regular in-game add-on to something considered gambling?

We’re here to explore loot boxes, what they are and how they’ve gone from being loved to being banned in the past few years.

What are loot boxes?

A loot box is a type of microtransaction you have in-game while playing video games. Meaning you make a purchase with real money to receive a box filled with random loot. Loot boxes may have different names depending on your game, but they remain the same.

Loot boxes
Understanding loot boxes - a full guide

You purchase a box filled with unknown goods to enhance your character or team. This can include weapons, armour, skins and other game-related items.

The items in the boxes will always be different, but they allow you to get a step ahead. Some games will have better characters and game equipment locked in loot boxes. It’s a virtual box filled with items that benefit your gaming experience.

Are loot boxes considered gambling?

When you think of loot boxes and online gambling, putting the two in the same category is hard. But believe it or not a link between gaming loot boxes and problem gaming has been verified. Researchers have done the work and found that loot boxes are structurally and psychologically alike to gambling.

This is why big regions like the UK have considered banning loot boxes. Other areas like Belgium, Japan, China, Spain, and Canada already have bans and heavy regulations on loot boxes. Recently, Australia also ruled loot boxes as illegal gambling

While loot boxes are not exactly considered gambling, they have been linked to problem gambling. And what’s more concerning is that it’s been linked to problem gambling among children. These boxes encourage children to spend large amounts of money and allow them to develop the habit of chasing the ‘win’ and other bad habits from an early age.

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Where the troubles started

Loot boxes have been part of video games for quite some time without causing trouble. Only in 2017, with EA’s Star Wars Battlefront II game, critics started questioning the motives and viability of loot boxes.

Gamers also had plenty to say, as those who spend money on these boxes could get their hands on powerful items and characters. At the same time, those who chose not to opt in to spending cash had to play for hours to find the same items within the game.

Popular characters, including ones used for marketing, were locked behind loot boxes. Encouraging the purchase of such items in-game.

After a lot of heavy criticism, EA removed various items from the loot boxes early in 2018.

However, the situation led to US officials calling for legislation on loot boxes and games considered ‘pay-to-win’. In April 2018, Belgium became one of the first to make loot boxes illegal. Game creators have spoken out, stating that they don’t believe loot boxes can be linked to or considered gambling. It’s a big debate, with the primary focus being the drive it leaves in young kids to spend large amounts of cash on game items.

A call for proper regulation

Many regions like Belgium have implemented bans on loot boxes. One of the biggest issues is maintaining control and ensuring that no games with loot boxes slip through the cracks.

It has already been revealed that a ban on such games appears ineffective. Leaving many wondering what the most effective way is to take control of the industry without completely spoiling the fun.

While a ban was the first call to action, many believe that government officials should aim to regulate these boxes properly instead of completely banning loot boxes. In doing so, they could call for more transparency regarding algorithms that determine the outcome of a purchase and ensure no loot boxes are made available in games aimed at minors.

Other big changes could include removing any deceptive design and enforcing consumer rights within games. This has been a primary focus in the online casino games in the past few years.

Some of the biggest problems with loot boxes

You will find that many regions have put their foot down and placed a ban on loot boxes. While many are upset with this development, others believe it is the right move considering the prices of the more recent loot boxes since 2017.

A study on loot boxes found that some of the biggest problems include aggressive marketing in games for age 3+ which is concerning considering the current industry fight against underage gambling. Not to mention the fact that these boxes promise bright and shiny rewards, only to reveal something mediocre. You always get something less amazing than what is represented at purchase.

Another big problem is the deception that lies in their designs. Officials believe great marketing encourages bigger spending. There is also concern regarding virtual currency, which at the end of the day, makes it seem like you’re spending less when you’re spending quite a lot.

Depending on the game, you might also find that these boxes hold more valuable items that can enhance your game and fast-forward your progress. This only encourages users to spend more on the boxes to beat other players and improve faster. It leads to spending large amounts of cash on virtual items for a game that is available to players of all ages. And in turn, this becomes unconscious problem gambling behaviour.

Loot boxes and child gambling problems

According to a study by the UK Gambling Commission, video game loot boxes are one of the top reasons for a rise in the number of children developing gambling problems. They believe that these boxes are responsible for the figure quadrupling and leaving 50,000+ kids with gambling issues.

While it’s not the general type of gambling, it’s the form of in-game purchasing of loot boxes and in-game items. 31% of young people have purchased in-game goods, of which 3% admit to buying skins. A great concern is that about 13% of kids aged between 11 and 16 have admitted to participating in games that include real-world gambling.

One example is Jonathan Peniket, a player who is no longer underage but has managed to blow his university savings on FIFA. According to Peniket, what started as simple enjoyment in buying random player ‘packs’ to build his team on the FIFA football video game, later became an addiction he couldn’t control.

The future of loot boxes

In 2021, there were many who claimed that this was the end of loot boxes, with authorities stepping in to take some strides to restrict or ban these types of in-game purchases.

As it has already been revealed, areas where bans have been put in place, saw very little success. The truth of the matter is that while the intentions are pure, they can lead to worse consequences.

Many are now calling for there to instead be laws in place that will regulate loot boxes and games that could lead to problematic behaviour in minors. Rules could include better age restrictions, strict requirements for improving loot boxes, costs, and designs to make them less attractive or provocative for minors.

Online casinos and loot boxes

If you’re an online casino player, you’ve probably stumbled across your own share of loot boxes. Maybe you don’t even know it. Online gaming sites have different types of promotions and bonuses to reward their players, including their own version of loot boxes.

These come in the form of mystery boxes or bonuses. As a player, you need to make a deposit, which is your ‘purchase’ of the box. From there, you get to reveal the contents, which can be anything casino related. This generally includes a bonus of any kind, from free spins to deposit offers.

Restrictions have been placed on these types of promotions by many regulators. At most online casinos, you’ll find that there is a level of transparency regarding what you could win. This gives you the option of choosing if the ‘loot box’ is worth your purchase.

At the end of the day, loot boxes can exist as long as they’re open about what could be won and the true value of those rewards.

Limited access to loot boxes

For some players, there’s no harm in playing games with loot boxes. Others have less self-control and require a helping hand. Some minors have spent over $10,000 on loot boxes, while others have blown their entire college fund.

Something good and fun can easily become harmful when not managed correctly. Great regulatory restrictions are being implemented in various regions, including many parts of Europe, prohibiting minors from accessing loot boxes and implementing a self-exclusion system that will allow users to limit their spending. This is a good way to move forward and encourage safe playing, more fun, and less harm in the long run.

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