With the UK Gambling Review Underway, There Are Calls for Greater Regulation of Loot Boxes

Loot boxes – one of the most controversial aspects of video games today – are back in the news, thanks to a new report commissioned by the charity GambleAware. Titled “Lifting the Lid on Loot Boxes” and carried out by researchers at two UK universities, it offers a comprehensive analysis of several previous studies, revealing some interesting and concerning truths about loot box consumption. 

One is that only 5% of people who purchase loot boxes are responsible for half of total loot box revenue, splashing out around £70 per month. What’s more, “these players have considerably higher scores of problem gambling symptoms”, with one third actually falling into the “problem gambler” category. The report also states that fears about young people being especially vulnerable to the “gambling-like harms of loot boxes” are warranted. “If harms are associated with loot boxes,” the report states, “these harms are liable to disproportionately affect children, adolescents and young people.”

Loot boxes are features which players can purchase within video games, and can be anything from new skins and weapons to playable characters. The controversy around the phenomenon lies in the fact that the exact contents of loot boxes aren’t actually known until after they’ve been bought and opened. This integral characteristic of loot boxes has led many critics to compare them to casino games like online slots, and object to what they regard as gambling mechanics being slyly embedded within games aimed at people of all ages. It’s a concern that’s exacerbated by the fact that, as the GambleAware report points out, loot boxes “often incorporate exciting and drawn-out animations when revealing their contents, building a sense of anticipation”. 

Many prominent figures have spoken out against loot boxes in recent years, in no uncertain terms. Last year, NHS mental health director Claire Murdoch slammed the practice, saying “No company should be setting kids up for addiction by teaching them to gamble on the content of these loot boxes. No firm should sell to children loot box games with this element of chance, so yes those sales should end.”

Some months after that, Lord Grade – chairman of a House of Lords committee on gambling – bluntly said that loot boxes are teaching kids to gamble. The committee’s reports summed the opinion of loot box critics up in one sentence: “If a product looks like gambling and feels like gambling, it should be regulated as gambling.” 

There is, however, the inconvenient and unignorable fact that loot boxes are huge revenue generators for video game developers. A prominent example can be found within the super-popular FIFA football game franchise. The aspect of the series most popular with players is Ultimate Team mode, which lets users put together their own bespoke squads made up of some of the greatest players in the history of the sport. Actually obtaining such players can take a lot of time and money, with many users choosing to purchase randomized player packs – ie, loot boxes – which may or may not contain valuable additions for their squads. Ultimate Team made $1.49 billion for EA in 2020 alone, and this is just one instance of how loot box mechanics are reaping vast financial rewards for a games company. It’s estimated that, by 2023, the international loot box market will reach around £36 billion.

With such colossal profits in mind, it’s little surprise there has been pushback from the games industry, with a top EA executive once describing them as enjoyable and innocuous, like Kinder Eggs.

Such defences have been roundly dismissed by campaigners, politicians and health professionals alike, and there has been a legal crackdown on loot boxes in Europe. Back in 2018, Belgium ended the debate by declaring loot boxes to be “in violation of gambling legislation”. This came after the Belgium Gaming Commission scrutinised some of the games most associated with loot boxes, including FIFA and Overwatch. Failing to comply with the law by removing loot box features can lead to huge fines and even prison terms for publishers, and this shift has forced radical changes to certain games. For example, EA no longer allows players in Belgium to purchase FIFA Points, the in-game currency used to buy Ultimate Team packs. The Netherlands, too, has passed legislation restricting loot boxes.

With concerns still running as strongly as ever – as is evidenced by the publication of this damning new GambleAware report – is it only a matter of time before other countries follow suit? The British government is currently reviewing outdated gambling laws going back to 2005, which means that the UK, at least, may be poised for a crackdown. However, even the writers of the GambleAware report have sounded a note of caution, highlighting how ambiguities and nuances within the debate can make it tricky to come up with workable laws. “The problem for the EU,” the report says, “is that the gambling laws themselves have not yet been harmonised, and loot boxes are not, in any case, a perfect fit for gambling legislation”. 

Many would argue that there is frankly no option but to clutch foreheads and work out this legislation, because industry self-regulation, and the general softer approach taken so far, hasn’t been working. 

A few years ago, FIFA began displaying “pack probabilities” on its Ultimate Team loot boxes, so users have an idea of the odds of getting a great player for their money. Yet many have voiced irritation at the imprecise percentages provided by EA – indeed, the system is less clear than the carefully audited Return-to-Player rates displayed at licensed online casinos. And, while the video games rating board PEGI has rolled out warning labels for games that include loot boxes, this measure has also come in for criticism for doing little to prevent children and teenagers from exposure to these kinds of mechanics. 

In the words of the GambleAware report, such approaches are “unlikely to mitigate risks posed by loot boxes. They are either ineffective or poorly implemented. Not surprising, then, that such efforts have also failed to stymie increasingly vociferous calls for policy action.”

The bottom line is that, as Amanda Atkinson of the Young Gamblers and Gamers Education Trust has put it, “today’s young people are clearly more exposed to gambling than previous generations”, being at all times “just clicks away from the online galaxy of gaming and gambling.” For this reason, the debate over loot boxes, and loot box regulation, may just be the tip of the iceberg, and it’s arguably only a matter of time before countries each have to take difficult and even draconian decisions to curb problem gambling among the most vulnerable in society. 

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