UK Gambling Commission states loot boxes pose ‘significant concern’ but ‘are not gambling’

UK Gambling Commission chief executive Neil McArthur has informed the UK government’s Department for Culture, Media and Sport select committee that while there are “significant concerns” about the presence of loot boxes in video games that children play, as loot boxes themselves technically have no monetary value they do not qualify as a form of gambling under current laws.

“There are other examples of things that look and feel like gambling that legislation tells you are not – [such as] some prize competitions but because they have free play or free entry they are not gambling… but they are a lot like a lottery,” McArthur said, as reported by the BBC.

While loot crates and microtransactions have been an industry staple for a number of years now, the loot mechanics in games like Star Wars Battlefront 2 and Overwatch has drawn the attention of gambling regulators. Many countries like Belgium and the Netherlands have taken action in relation to gambling laws, and the United States Federal Trade Commission has also indicated it will be specifically investigating how loot boxes impact children.

However, whilst loot box prizes may not have a monetary value, third party websites that enable people to gamble on loot box contents are “a constant battle” for publisher/developers such as Electronic Arts and its FIFA packs, but publishers should do more to enforce their terms and conditions.

“We have said [to the video games industry], ‘it’s not enough to say we don’t want this happening’,” Enright added. “We’ve been robust and said, ‘we can see you have T&Cs, what are you doing to apply them?'”

When asked which game had generated the most complaints about loot boxes and skin betting, the commission singled out Valve’s Counter-Strike: Global Offensive, stating that “where [the commission has] drawn [Valve’s] attention to British consumers, including children, taking part in gambling, [Valve has] closed [skin betting sites] down”, but insisted “Valve in the US should do more” about third-party betting sites as it was not in the commission’s remit to “monitor the internet on behalf of the video games industry”.

Industry veterans called on the global games industry last year to take action on loot boxes in video games “before it’s too late”. Executive director of the IGDA, Jen MacLean, also issued an industry-wide call-to-action in response to the United States Federal Trade Commission’s announcement it was launching an investigation into loot box monetisation.

“By not taking significant action as an industry and global game developer community to self-regulate how loot boxes are used, we run the very real risk that governments around the world will take that action for us, and perhaps create significantly restrictive laws that could impact any random reward elements in games,” MacLean said. “I offer my strongest advice to game developers and interactive entertainment businesses on this matter: addressing how loot boxes are used is both the right thing, and the smart thing, for the global game development industry to do.”

About Vikki Blake

It took 15 years of civil service monotony for Vikki to crack and switch to writing about games. She has since become an experienced reporter and critic working with a number of specialist and mainstream outlets in both the UK and beyond, including Eurogamer, GamesRadar+, IGN, MTV, and Variety.

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