The Digital, Culture, Media and Sport Committee’s Report calls for loot boxes to be classified as games of chance and regulated under the Gambling Act. Committee Chair Damian Collins MP commented “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.”
Found in top games such as FIFA, Star Wars or Halo, loot boxes are virtual packages or treasure chests that charge players either real or in-game currency in return for random outfits, weapons or characters to play with. These games require heavy investment from the gaming industry and loot boxes are a lucrative revenue stream for them to tap in to, but a backlash has begun from campaigners, politicians and even the Church. Last week Church of England spokesperson, the right reverend Dr Alan Smith, warned that “Harmful and addictive products flooding children’s games cast a dark shadow over the colourful world of childhood. Games should be a place of adventure and discovery, not a vehicle for profit-making at children’s expense.”
But are loot boxes gambling?
Following an investigation last year Belgium’s gambling authority banned loot boxes, classifying them as gambling, and the Netherlands and China have also acted with tough restrictions on them. But are they right? In essence a loot box is a game of chance – like a prize draw or lottery – but the reason they don’t fall under the UK’s current gambling laws is because players are guaranteed a reward of some kind in return for their payment (even if it isn’t what the player had hoped for).
What is clear is that young children are at risk of being exploited and many studies are proving the very real link between childhood gaming and future gambling addiction. The Report states that “gaming is several years behind gambling in relation to protecting the vulnerable” and that the gaming industry is generally reluctant to accept responsibility the problem. The reality is that this issue may eventually be addressed similarly to the UK fast food (HFSS) and alcohol industries which have been heavily regulated in relation to children. Now that the Select Committee’s Report has uncovered some worrying truths, it will be a matter of time before the government intervenes to safeguard younger players with either age restrictions, labelling or even an outright ban – the gaming industry needs to take action, and fast.