The subject of loot games has been a controversial one for a fair while now. One of the main concerns is the relationship between them and online gaming.
Hutch Games have recently found themselves in deep water with the Advertising Standards Authority (ASA). They have warned the video games developer for not disclosing that a couple of their mobile racing games include what are known as loot games.
Loot boxes see video game players able to buy random items but with a financial amount required to be made. July 2023 saw a statement made on the subject by the UK Interactive Entertainment. They are the video games trade body and have introduced a guideline recommending that loot boxes should only be available for players aged 18 or over.
The new guideline followed a study by a technical working group, set up 12 months previously. The Department for Culture, Media and Sport (DCMS) were behind setting up that working group. There had been a call for this after there’d been a call for evidence on loot boxes in September 2020. Again it seems that any decisions on matters like this do tend to take a while to come to fruition.
It’s not just in the UK that there has been concern over loot boxes. The subject is also being discussed in Germany. There have been calls for discussions about loot boxes with scientists, politicians and industry stakeholders giving their views.
Video games can become addictive as players strive to reach the next level or achieve a highest score. Therefore, players will become keen to add new elements to the game that they are playing.
The problem is that loot boxes are often offering randomised rewards. Those making payments do not know the contents of the loot box that they have purchased. It could contain weapons that can boost your chances of winning or the introduction of new characters. The view of some therefore is that buying loot boxes is like taking part in a game of chance and that makes it gambling with no skill being required.
The main concern though is that under-18s are being targeted. It’s nothing new as the UK Gambling Commission (UKGC) have since 2016 regarded loot boxes as a possible risk to children in terms of gambling said a BritishGambler spokesperson, an online gambling guide in the UK.
Is it gambling though? The UKGC stated that if it was a case of in-game items that are only used for the game in question and no cash out is possible, then they wouldn’t be able to regulate loot boxes. However, they had received correspondence from worried parents who said they “are not interested” in whether the loot boxes meet the legal definition of gambling behaviour.
Of more concern to those was whether they “could present a risk to their children.” The UKGC conclusion was that the “line between video gaming and gambling is becoming increasingly blurred.”
2021 saw the UKGC publish a Young People and Gambling Survey. That revealed 52% of respondents (questioned in 2019) were aware of loot boxes with 44% having made payments. 6% said they’d bet with in-game items. This was either with unlicensed third-party websites or friends.
Both Belgium and the Netherlands have made the ruling that loot boxes are in some circumstances a form of gambling. In China, the probability of getting certain rewards from a loot box must be disclosed.
Gaming companies have of course defended loot boxes from the claims they are gambling. Electronic Arts have likened them to the toys you can get in Kinder Eggs. Others have taken the decision to to include loot boxes in their games.
Four years ago the DCMS said loot boxes shouldn’t be sold to children if the items received were simply down to chance. The 2019 Conservative Party manifesto said that the outdated 2005 Gambling Act would be reviewed. It promised “particular focus on tackling issues around loot boxes.” More evidence was requested by then Prime Minister Boris Johnson.
That evidence did find some elements of loot boxes did have “potential harms” and this included gambling ones. Empirical studies came to the view that in terms of an “association between loot box use and problem gambling” it was “stable and consistent.” Their view is that the risk of some harm is “likely” to be higher for those under the legal age for gambling.
The government stated that children should not be able to buy loot boxes and there should be “improved protections” for adults too. They added that their preference was for the video games industry to increase their level of protection not legislation.
That explains why the UK Government White Paper on gambling reform does not deal with loot boxes. While they feel that they have some similarities with gambling, the inability to cash out rewards is important. The fact you can’t cash out rewards is a key one. Consumer protection is important for this issue and that’s what has been seen in this action from the ASA.