Banning Loot Boxes in the UK

Post by:
24 Sep 19

Legislators want in-game spending regulated by the gambling laws and entirely banned for children

What is a ‘loot box’?

A loot box is explained as an in-game feature that offers randomized rewards that players buy using real-world cash or in-game currency earned through gameplay. Often, the boxes contain game boosts, new gear or costume upgrades for in-game characters. For example, in FIFA Ultimate Team, loot boxes contain random players to add to a player’s customized team.

Loot Boxes and Gambling

Loot boxes have been considered and likened to gambling by many critics because of their unknown content. You pay money, but there’s no guarantee the bought item would be of much worth. Quite like spinning the wheels on a slot machine and watching the fruit figures, hoping they would line up and bring you the jackpot. Or waiting to hear just the right number being called out when playing UK’s ever-favourite bingo (or free bingo – you don’t lose your money but there’s still the uncertainty factor about the prize).

The contents of each package of a loot box are not revealed to a player until the package is bought and opened. This could prompt a player to spend more and more on the loot boxes in a bid to unlock an item they want. The player is not guaranteed to get something valuable when they buy a box. This brings in an element of chance – like a lucky dip, just as in gambling.

A report from a UK parliamentary committee published on the 12th of September looking into the rise of ‘immersive and addictive technologies’, urged the government to look into a grey area in the gambling laws that allow loot boxes, which offer random virtual rewards to players, and to enforce a blanket ban on the feature especially to players under the age of 18. The members of parliament called for any games that contain the loot box feature to be classified as gambling and rated age 18 and over.

“We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games. In the absence of research that proves no harm is being done by exposing children to gambling through the purchasing of loot boxes, then, we believe the precautionary principle should apply, and they are not in games played by children until the evidence proves otherwise” a part of the report reads.

Loot boxes currently do not fall under the 2015 Gambling Act as they are not considered to have monetary value outside the game. Neil McArthur, the chief executive of the United Kingdom Gambling Commission, confirmed this as he told parliament that under the current gambling laws, loot boxes – explicitly mentioning the FIFA Ultimate Team card packs, are not considered gambling, even though he expressed ‘significant concerns’ about the games’ popularity with underage players. The chief regulator of gambling said that loot boxes do not have a ‘formal way of monetizing their content.’ The county’s gambling law applies only to prizes that are either in cash or have a monetary value.

“There are other examples of things that look and feel like gambling that legislation tells you they are not,” McArthur said, while appearing to suggest that the gambling laws in the UK would have to find a way to incorporate regulations for a new form of prizes, and also sighting lack of honesty and transparency in the business practices of some tech companies. The same sentiments are shared by the committee of MPs in the report.

Video Gaming Companies answer

Some of the top video gaming companies are fiercely battling the notion that loot boxes are indeed a form of gambling and gone on to try to justify and even change the name to suggest otherwise. An awkward spat between parliament and Electronic Arts (FIFA game maker) Legal and Government Affairs Vice President Kerry Hopkins saw the EA executive refer to loot boxes as “surprise mechanics” and “quite ethical and fun [and] enjoyable to people” during a hearing in June. Hopkins compared buying loot boxes to purchasing things like kinder eggs, Hachimals, or LOL surprise.

But those who play these games will disagree with EA. “When you speak to any gamer, even gamers who do buy those games and do buy into those loot boxes, none of them are happy with it. They don’t deem it as being fun, they wish it weren’t there,” says Ryan Brown, a games journalist.

What happened when Belgium banned Loot Boxes

Belgium made loot boxes illegal for under 18s in April 2018. The loot boxes debate in Belgium kicked off when players widely criticized Star Wars Battlefront II because major characters had to be unlocked through loot boxes, something that wasn’t pleasant to very many players. The Belgian Gambling Committee took up and established an investigation of the game alongside FIFA 18, Counter-Strike: Global Offensive and Overwatch, that led to the ban on loot boxes.

Gamers in Belgium were supportive of the ban as they saw the loot boxes as dishonest. Even though loot boxes that can be opened using in-game rewards rather than real money are still legal in the country, the Gaming Commission still does frown at them. Many English players could be wishing that the ban is effected in the country but will a mere ban deny access to underage players, especially nowadays when the technology is rapidly growing to make it challenging to filter content?

What about the UK?

The United Kingdom is a leader in the gaming industry and should be able to adjust and grow along the growing tech industry to ensure a healthy online gaming industry. It was very disappointing that the committee found some of the gaming industry stakeholders very inconsiderate, uncooperative, and ‘wilfully obtuse. This sends out a very distressing notion that gaming companies could be wilfully avoiding or escaping regulations to make more money even at the expense of childhood. The report indicated that gaming companies are not interested or give the cold shoulder to guarding morality or child development, to the extent of calling loot boxes ‘surprise mechanics’  whereas it’s obvious they are not mere toys.

The UK parliament should make concerted efforts to take appropriate action and tinker around the 2005 Gambling Act. The act was meant to be iterative as the need grows without needing too much primary legislation, as it has failed to keep up with the rapidly developing gaming industry. With all that said, parents should also take it upon themselves to step up and protect the precious years of their kids. And after that, the whole nation will wake up and smell the coffee.