The conversation: loot boxes
So what’s the story?
The House of Lords’ gambling committee has recommended that loot boxes should be officially classified as a form of gambling in its new report.
Wait, back up a second… What’s a loot box?
Loot boxes are virtual ‘treasure chests’ often bought in video games popular with young people such as Fortnite, Overwatch and Apex Legends. They may – or may not – contain items of value to the player.
Most of the time, they contain cosmetic items such as ‘skins’ (costumes for their in-game avatar), emotes and stickers which don’t affect gameplay in any way – but sometimes they also contain items which boost the player’s performance, or so-called ‘pay-to-win’ items.
Why could they be harmful to young people?
There is an ongoing debate around whether they should be considered gambling or not because of the chance element involved.
Players have no way of knowing whether the loot box will yield the items they want – it could contain ‘Legendary’ or ‘Epic’ items which are often valuable status symbols, or worthless ‘Common’ items. There are concerns that children and young people might be tempted to keep buying until they get the items they want and thus develop gambling-like behaviours.
Parent Zone’s own research found that 76 per cent of children and young people say games try to get them to spend money all the time, and 49 per cent that online games are only fun when they spend money.
That sounds like gambling to me…
It does, doesn’t it? But the UK Gambling Commission, which is responsible for regulating most of the gambling industry, has said that they can’t be considered gambling because the in-game items you receive from a loot box are not worth ‘real money’ and can’t be cashed out.
Is the Gambling Commission right then?
Well technically, they’re correct – these items can’t be cashed out in the game itself – but a flourishing online industry known as ‘skin gambling’ allows players to export their skins on third-party websites where they can be gambled for real money. These websites are unregulated and completely independent from the games, but the case could be made that the items obtained from loot boxes do have a real-world value.
Also, the Gambling Commission compares loot boxes to football card packs in that the player never ends up empty-handed. They always receive something, but whether that something is worth the amount the player paid for the loot box is up for debate…
Seems like this has been going on for a while… What else has the government had to say on the matter?
It’s been a contentious issue since many games – especially free-to-play – depend on loot boxes for revenue, but many MPs, committees, and organisations (Parent Zone included!) have long called for loot boxes to be classified as gambling and to ban their sale to children.
In June, the Department for Digital, Culture, Media and Sport (DCMS) launched a call for evidence into loot boxes and their effect on children. This was a part of its response to the DCMS’ select committee’s report into immersive and addictive technologies, which concluded that loot boxes should be reflected in the Gambling Act 2005 as a form of gambling.
Surely these loot boxes are available worldwide – what are other countries doing?
Loot boxes have raised eyebrows all over the world and several countries have taken action to protect children from gambling-related harm. Belgium banned them outright in early 2018 when the local gambling regulator found that they were in violation of its laws, whereas the Netherlands and China have taken a hard stance and restricted their availability.
So what happens now?
Hopefully, the government will make updating the gambling legislation a more urgent priority now that it’s facing pressure from so many sides. Loot boxes, according to the government, will be considered when the Gambling Act 2005 is due to be reviewed, but the Lords warn that more urgent action is needed. Lord Grade, the chair of the Lords’ committee, told BBC Breakfast that the UK’s gambling laws were “way behind what was actually happening in the market”.
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