UK Gambling Watchdog Keeps Loot boxes Outside Gambling Purview

UK lawmakers are currently studying whether video games and loot boxes fall within the purview of gambling. Leading the evaluation is Neil McArthur, who heads the Gambling Commission in the UK. He believes that on the first impression, loot boxes might look to be a form of gambling, but when compared to other video games or consoles, they are hardly so. His analysis is based on the premise that loot boxes operate under various conditions and that monetary prizes are not included in it.

Loot boxes are like “treasure chests” and have add-on items that can be used to increase the power of the games and get additional customizable weapons or “skins,” thereby driving the progress made through the game. In traditional games, these are updates frequently added by the developer. However, in the modern gaming environment where video games are largely in the cloud, new updates and content are continually provided to players against payment.

This setup can be very tempting for vulnerable youth or children who often think that getting a top-of-the-line skin is a status symbol and influences them to spend money acquiring it.

Because of the manner of functioning of loot boxes, it is very difficult to accurately pinpoint whether it is a part of the overall gambling scenario and affects the end-result of such popular gambling games as FIFA and PUBG.

Mr. McArthur is not sure of which way to classify loot boxes—a part of gambling or not. He said,

While the Gambling Commission of the UK is not sure of loot boxes being included in gambling and whether it should be easily accessible to children, the House of Lords thinks otherwise. The Select Committee on the Social and Economic Impact of the Gambling Industry in a report of July 2020, categorically recommended that the UK Government should include loot boxes as gambling and that loot boxes should be considered as “games of chance.” This would lead to loot boxes falling under the Gambling Act of 2005 and being monitored by the Gambling Commission.

Incidentally, Belgian had imposed a ban on loot boxes last year as its gaming commission felt that they were an unlawful type of online gambling.

Loot boxes are like “treasure chests” and have add-on items that can be used to increase the power of the games and get additional customizable weapons or “skins,” thereby driving the progress made through the game. In traditional games, these are updates frequently added by the developer. However, in the modern gaming environment where video games are largely in the cloud, new updates and content are continually provided to players against payment.

This setup can be very tempting for vulnerable youth or children who often think that getting a top-of-the-line skin is a status symbol and influences them to spend money acquiring it.

Because of the manner of functioning of loot boxes, it is very difficult to accurately pinpoint whether it is a part of the overall gambling scenario and affects the end-result of such popular gambling games as FIFA and PUBG.

Mr. McArthur is not sure of which way to classify loot boxes—a part of gambling or not. He said, “The Gambling Act tells us that gambling means playing a game of chance for a prize, and you can certainly see circumstances where a loot box might fall within that definition, but where things become a bit more complicated are when one looks at the definition of prize, and prize is defined as being money or money’s worth.”

While the Gambling Commission of the UK is not sure of loot boxes being included in gambling and whether it should be easily accessible to children, the House of Lords thinks otherwise. The Select Committee on the Social and Economic Impact of the Gambling Industry in a report of July 2020, categorically recommended that the UK Government should include loot boxes as gambling and that loot boxes should be considered as “games of chance.” This would lead to loot boxes falling under the Gambling Act of 2005 and being monitored by the Gambling Commission.

Incidentally, Belgian had imposed a ban on loot boxes last year as its gaming commission felt that they were an unlawful type of online gambling.