Out-Law News 2 min. read

Gambling laws should apply to gaming 'loot boxes', say MPs

So-called video game 'loot boxes' should be brought within the scope of gambling laws in Britain, a committee of MPs has said.

The Digital, Culture, Media & Sport (DCMS) Committee said loot boxes that can be bought with "real-world money" and the contents of which are unknown at the time of purchase should be considered to be "games of chance played for money's worth" and regulated as such under gambling laws in Great Britain.

"The Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance," the DCMS Committee said in a new report on immersive and addictive technologies. "If it determines not to regulate loot boxes under the Act at this time, the government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money’s worth."

Cited in the DCMS Committee's report is research into the prevalence of loot boxes led by Dr David Zendle of York St John University. That research described loot boxes as "items in video games that may be bought for real-world money, but which provide players with a randomised reward of uncertain value."

A Gambling Commission survey in 2018 found that 31% of children aged between 11 and 16 have paid money or used in-game items to open loot boxes. In its report, the DCMS Committee said that in some games the contents of loot boxes are known to gamers before they are given the option to make a purchase, but that in most cases that is not the case and "what a player gets for their money is therefore based on chance".

The Committee said that there should be a ban on loot boxes that contain the element of chance being sold to children playing games, and it recommended that gambling content labelling is applied to games along with corresponding age limits by games developers.

The government was also called on to commission a review "of the effects of gambling-like game mechanics, including loot boxes and other emerging trends, to provide clarity and advice" and recommended that the results are used to inform the government's existing plans to develop legislation on online harms.

Gambling law expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law, said: "With technology and social media having an increasing effect on society, a number of the issues raised, in particular the addictiveness of  gaming and the employment of techniques designed to stimulate users and reward them for spending as much time gaming as possible are particularly concerning. The report is very broad considering individual elements such a ‘loot boxes’, through to e-sports and the promotion of player wellbeing and promotion of healthy gaming in schools, but again it is another wake up call for the gaming industry that they are under the spot-light."

"It will be extremely interesting to see whether the proposed recommendations of the report are adopted by the government. The recommendations of parliamentary committees are not always acted upon. For instance, many of the House of Lords committee's recommendations to overhaul licensing laws in England in recent times were rejected by the government," he said.

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