The legal battle around loot boxes has been ongoing for years now. When Belgium ruled out that loot boxes are considered a form of gambling in the country, UKGC said they’re going to look into the matter. Now, they’re saying it’s not gambling, and software creators can put loot boxes in their games. Here’s why their decision is questionable, to say the least.
What’s a loot box?
For those of you who aren’t involved in gaming, it may sound like a minor ruling. After all who cares about video games and what developers put in them? However, it’s a very important thing for the industry. For starters, it’s not fair.
A loot box is a popular mechanic that many games developers put in their products. They create a free-to-play game and monetize it with the help of in-game purchases. You can buy any item from the in-game store for real money. Some items can be very expensive. On Steam Community Store, you can easily find items that cost over $1000.
Then, there’s another way to get the items you can’t afford to buy. Win them in a loot box. You buy a loot box and get a random item from it. The outcome is completely random and you’re not guaranteed to get an item you don’t already have. People are buying multiple loot boxes to get the item they need by pure chance.
This mechanic even gives you an equivalent of free spins to introduce you to this in-game gambling. You get some loot boxes for free and then you’re are encouraged to buy more and more loot boxes to get your desired item.
Gambling or not?
It seems like this question shouldn’t even be raised. Loot boxes have all the features something needs to be qualified as gambling. You pay real money to get a significantly bigger reward, and the outcome of getting that reward is based solely on chance. You could describe both loot boxes and video slots with this definition. UKGC disagrees.
According to them, there’s one key component missing to qualify this mechanic as gambling. It’s a monetary reward. The British law states that for something to be qualified as gambling, it has to produce a monetary reward. Loot boxes give players a non-monetary reward, even though it fits all the other criteria.
The Commission knows that there is a secondary market where the prizes are sold for real money. This means even if they’re not technically monetary rewards, people are willing to pay money for them. It’s a shame UKGC doesn’t consider that.
It’s about the kids
You probably don’t play video games that much, but there are millions of kids who do. It’s well known that being exposed to gambling at an early age leads to more cases of addiction than when you’re an adult. The mechanic looks incredibly alike to video slots, so it’s not known how exactly will it impact the young.
We hope that Irish lawmakers don’t let that loophole pass through the new Gambling Bill, and will regulate loot boxes as gambling.