Loot boxes have been a hot topic in the regulation world for many years. A controversial element found in many videos and mobile games, loot boxes are once again on the chopping block.
The Department for Digital, Culture, Media and Sport are calling for the banning of loot boxes and to have them classified as a form of gambling. The DCMS claims that loot boxes being found in games such as FIFA puts children at risk of developing gambling problems later in life.
The low down on loot boxes
Loot boxes are found in many video games and also in games played on mobile devices. These loot boxes are bought with real money, but there’s no guaranteeing what the box contains.
Essentially, loot boxes are a gamble as to what you’ll receive. And they can cost a pretty penny.
Not currently regulated in any way, loot boxes currently bring in more than £23 billion a year. Most of this is spent by children under the age of 18. This is the direct cause for the DCMS’s outcry to have loot boxes classified as gambling.
Labour MP Carolyn Harris, who also chairs a party of MPs that investigate gambling-related issues, commented:
“They are a virtually speculative commodity that only helps to normalise and encourage young people to take a chance. All too often this will lead to youngsters developing an addiction to gambling.”
Apple in hot water
While this is not the first time that loot boxes have caused outrage in the UK, it comes hot on the heels of a $5 million class-action lawsuit against Apple.
On the 12th of June 2020, Apple was hit with a class-action lawsuit over the availability of loot boxes in many of the games available on the App Store.
Filed at California’s Northern District Court, the suit points out that games such as Roblox, FIFA Soccer, and Mario Kart Tour are all freely available to kids and feature loot boxes for real cash.
Are loot boxes gambling?
While loot boxes simply provide rewards such as special characters, weapons, and virtual gaming equipment, it can be hard to definitively say whether or not they constitute gambling.
However, it’s a fact that loot boxes are bought blindly and therefore technically they could fall within the jurisdiction of the UKGC. Gambling is defined by the UKGC as “betting, gaming or participating in a lottery.” Loot boxes could fall under the category of lotteries as the outcome is left to chance.
Damian Collins, the chair of the House of Commons committee that also appealed for the banning of loot boxes in 2019, said:
“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the government to explain why loot boxes should be exempt from the Gambling Act.”
Now the industry must wait and see as to what the outcome of this latest appeal will be by the DCMS and whether or not change will take place.
Countries such as Belgium and Japan have already taken this step in protecting children by banning loot boxes entirely.