If you’ve played any game in the past 5 years or so, whether on console, mobile or PC, you’ve undoubtedly encountered the infamous loot box. Even as a parent, you’ve likely unknowingly heard about them. Maybe you’ve wondered what your children are spending their weekly pocket money on all the time. Loot boxes are slot machine style mechanics embedded into games for players to acquire certain playable items. A player spends real money for a chance to win a randomised reward, quite often not receiving the item they want first time, encouraging the player to spin again and again.
Imagine a slot machine in a casino. The player pushes spin, the screen lights up and exciting sounds play as the reels turn. Eventually the reels stop and the player either wins or loses, giving the player emotional lows or euphoric highs. There’s a reason why these games are only playable by adults. The games are manipulative and often addictive. Like any high, the player wants to feel that again, spending more over time and chasing losses to feel the rush of winning again. This system is precisely what is included in video games aimed at children, including the very popular FIFA franchise in their Ultimate Team.
“If a product looks like gambling and feels like gambling, it should be regulated as gambling.”
Government bodies and consumer protection organisations within the UK have spoken up about the admonishment and regulation of loot boxes. With parents especially voicing their concerns over the practice of implementing loot boxes in video games, the House of Lords have stepped in with their own take, believing that “Lords call for ‘immediate’ gambling regulation”. The report says, “If a product looks like gambling and feels like gambling, it should be regulated as gambling.”
Most would agree the statement is common sense but the gaming industry simply disagrees. However, they don’t present any counter-evidence to suggest that loot boxes aren’t gambling. Loot boxes behave like slot machines and affect people psychologically in a similar way slot machines would. The report continues, “The Government must act immediately to bring loot boxes within the remit of gambling legislation and regulation.” By putting loot boxes under gambling laws, age restrictions would apply among other things.
Loot boxes are “teaching kids to gamble”
Lord Grade, Chairman of the committee, spoke out saying, lots of other countries have already started to regulate loot boxes because, “they can see the dangers” which is “teaching kids to gamble”. After the announcement by Belgium that loot boxes were considered gambling the country, EA, as well as other companies were also forced to either remove the option to pay for loot boxes from their games, remove the loot box mechanic or remove the game from Belgium entirely.
Imagine that happening in the UK, which is a larger market than Belgium. Given the legal and financial ramifications, EA wouldn’t be able to release the current version of FIFA in the UK. Not to mention that if the UK enacted this, many other countries might follow suit to become a worldwide movement where most major markets deem loot boxes to be gambling.
Gambling Act was “way behind what was actually happening in the market”
With loot boxes falling under the purview of gambling laws, games companies would no longer be able to advertise games as ‘child friendly’. Games would have to definitively say their games are ‘Adults Only’, more likely receiving a PEGI Rating of 18. Lord Grade went on to say that the Gambling Act was “way behind what was actually happening in the market” but also mentioned that the “overwhelming majority” of the report’s recommendations “could be enacted today” as they don’t require any legislation.
How much of those recommendations are directly related to loot boxes remains to be seen. The outcome looks promising for those concerned about the predatory practices being enacted by games companies after seeing the negative effects on friends and families.
“There is academic research which proves that there is a connection…between loot box spending and problem gambling.”
The issue with loot boxes is how easily accessible they are, being sold in games that are targeted towards children. Even games that are given 3+ PEGI ratings, have gambling systems snuck in to them. The report says, “There is academic research which proves that there is a connection, though not a necessarily a causal link, between loot box spending and problem gambling.” So it appears more of a correlation instead of a causation. An expert, Dr David Zendle, explained to the committee that either loot box spending causes problem gambling, due to their similarity – or that people who have gambling problems spend heavily on loot boxes. He warned that either way, the connection was “extraordinarily robust”.
Basically, if someone is susceptible to gambling in casinos, they’d also be susceptible to loot boxes according to research. The Lord’s report concludes that ministers should make new regulations which explicitly state that loot boxes are games of chance. Similarly, the definition should apply to any other in-game item paid with real money, such as FIFA Ultimate Team packs.
There is a particular emphasis on FIFA in the UK due to the popularity the gaming franchise has. The popularity meaning that FIFA is able to spread gambling across the nation to both adults and children alike. Popular games make it extremely accessible for anyone to engage in gambling-like activities which should not be so easy to do, especially for children and problem gamblers.
“This issue requires more urgent attention.”
There are strict rules in the UK about children gaining access to casinos. The same level of strictness should also be applied to loot boxes and other gambling mechanics included in games. The Government had told the committee that it has plans in the future to review the Gambling Act with regards to loot boxes, however the Lord’s report warns: “This issue requires more urgent attention.” Agreeably, loot boxes are more of an issue than any other gambling. The fact being they are operating with the least regulation and control, operating within games playable by children.
A summary of the Lord’s report, “Time to act to reduce gambling-related harm, says Lords report” provides key recommendations on how to deal with gambling-related harm in the country with loot boxes receiving particular attention:
- The gambling industry offers a variety of products to consumers, including some which can be highly addictive. The Gambling Commission should create a system for testing all new games against a series of harm indicators, including their addictiveness and whether they will appeal to children. A game which scores too highly on the harm indicators must not be approved.
- The equalisation of speed of play and spin, so that no game can be played quicker online than in a casino, bookmaker or bingo hall.
- The Gambling Commission must explain the minimum steps which operators should take when considering customer affordability, and make clear that it is for the operator to take the steps which will enable them to identify customers who are betting more than they can afford.
- The Government must act immediately to bring loot boxes within the remit of gambling legislation and regulation.
Companies that implement loot boxes being held accountable
Organisations like PEGI focus hard on mature content when rating games. However, with loot boxes, micro-transactions and other gambling-like mechanics, they only add the warning “In-Game Purchases”. The fact that they are so strict on mature content, such as sex, drugs and violence, but so lax on gambling in games which causes legitimate harm to children and families psychologically and financially, highlights a discrepancy in the industry.
Another danger of loot boxes is the speed at which you can spend money. Often the only action is insert your card details, navigate a few menu prompts and you can start purchasing. It’s what makes these games somewhat more dangerous than even online casino games. Applying an “equalisation of speed of play and spin”, companies would have to slow the rate at which people spend. They would have to put measures in place to control how much people can spend and acquire items on mass.
Another important aspect is companies that implement loot boxes being held accountable for customer affordability. It won’t be acceptable for companies to stand by knowing customers are spending their money on gambling due to addiction. It is the responsibility of these companies to understand who they’re selling to and how that’s affecting these people.
Children talked about how they feel pressured to spend money in these games
The reports states that it made 66 recommendations which will begin to address what has become a huge problem. Not all of these recommendations are directly related to loot boxes but given that the committee wants loot boxes under the umbrella of gambling law, they may well eventually be applied to them in the future.
This comes in after other UK organisations and government bodies have spoken out against loot boxes:
September 12th 2019 – Parliamentary committee recommends banning loot box sales to children. Report proposes industry tax to fund research into the harmful effects of gaming, slams”wilfully obtuse” industry representatives (gamesindustry.biz)
The Children’s Commissioner report is of interest, as it discusses the addictive nature of loot boxes for children. It features testimonials from children who play games like FIFA. These children talked about how they feel pressured to spend money in these games. This is largely attributed to the ‘grind’ required to unlock players because FIFA Ultimate Team is renowned as Pay-To-Win. If you don’t continuously spend money in-game, you won’t have a chance to earn the best players for your team. You’ll end up falling behind your friends and other players. As such, the Children’s Commissioner for England agreed with MPs who had previously called for a ban on loot boxes being sold in video games.
Change is coming
Back in July 2019, the BBC had released articles spotlighting how children were spending thousands of pounds of their parent’s money, even going as far as emptying their parent’s bank accounts on a variety of games, with of course FIFA being an obvious mention amongst families – ‘My son spent £3,160 in one game (BBC)
The mounting evidence suggests loot boxes are gambling and should be regulated under Gambling Laws. Yet the games industry continues to deny the claims, preferring to identify them as “surprise mechanics”. We know a ruling stating loot boxes are gambling will affect these companies revenue profit margins. EA reportedly brought in revenue of $1 billion in 2018 due to loot box sales. At the end of the day, it comes down to money over the safety of their customers.
However, it would appear the walls are closing in on the predatory games companies. Governments worldwide will continue to declare loot boxes gambling, requiring regulation across the board. The change is coming with the type of movement from government bodies in the UK and around the world. Governments will continue to protect children from new forms of gambling in games aimed towards children, being labelled as ‘family-friendly’.