Loot boxes for adults only under proposed new law

One challenge to banning loot boxes is that while evidence confirming the link between loot boxes and normalization of gambling is abundant, research stops short of confirming loot boxes cause negative gambling behaviors. But others pointed out that the Belgium Gaming Commission’s definition specifically requires there to be "a game element" in opening the crate, which differentiates loot boxes from trading cards. Loot boxes give random rewards and can be acquired either through gameplay or by spending real cash. Video game loot boxes are "in violation of gambling legislation", according to the Belgium Gaming Commission. For industry self-regulation to work effectively, I have recently recommended that (i) industry-standard, non-discretionary rules be adopted; (ii) compliance be continually monitored; and (iii) robust enforcement mechanisms be included to combat non-compliance.

• According to some, loot boxes are part of the “compulsion loop” of game design to keep players invested in a game.
• Exploratory analysis revealed that the Belgian version of Identity V continued to contain paid loot boxes in Belgium.
• RuneScape publisher Jagex admitted to the committee that players could spend up to $1,000 a week on micro transactions within the game.
• Using the Newcastle and Loughborough study as evidence, a bill was crafted in the Australian Parliament to restrict games with loot boxes and gamblified microtransactions.
• Mr Geens has said that he would meet members of the video game industry to discuss the next step.
• A Belgian loot box prevalence rate of 0.0% should be found amongst all games studied and amongst those games studied that were deemed suitable for underage players.

However, the newest rendition, EA Sports FC 24, was rated USK 12 (approved for young people aged 12+). In contrast, the ESRB and PEGI ratings were unchanged and remain E and 3, respectively. With the rise of avid video game players livestreaming gameplay to followers, these players are reminded of the need to follow FTC Endorsement gorilla kingdom slot Guidelines. These guidelines require, among other things, disclosure of any material connections between the players and the products they are touting, such as compensation agreements. When a player does manage to win their desired prize in a loot box, the brain releases dopamine, otherwise known as the pleasure chemical.

Australia: Mandatory minimum age ratings

Some people have been more critical of the decision, suggesting that "Pokemon and other trading cards" would also be illegal under these rules. The move has been widely praised online, becoming the most upvoted topic on Reddit’s news subreddit in April 2018 with one person calling it "brilliant" and praising it as a way to "avoid taking advantage of kids with fancy and shiny in-your-face computer graphics and images". Only Battlefront II was found not to be in violation of the law – after developer EA temporarily halted micro-transactions completely following negative feedback. Failure to comply may lead to a fine of €800,000 (£697,000) and up to five years in prison for the publishers. Loot boxes are still here with us in 2023, and some countries are finally catching up with regulation. But they are something to be wary of, particularly if you find you lack impulse control, or you are concerned about your child being exposed to gambling behaviors at a young age.

Impact on game design

It should not be suggested that loot box prevalence has somehow become higher due to, or despite, the ban. The present study provides evidence that the Belgian ban does not appear to have effectively reduced loot box prevalence. The latest research has presented conflicting evidence as to whether loot box purchasing is practically harmful to players’ wellbeing. Indeed, regulators in many countries tried to see whether existing gambling law can be applied to regulate loot boxes. However, after a slew of legal interpretations were published between 2017 and 2018 by the UK, Denmark, Belgium and the Netherlands, etc., not many substantial developments have occurred with loot box regulation. When “accessed,” look boxes provide players with a random set of other virtual items. These other virtual items can range from aesthetic items, which make something in the game look good (e.g., a visual customization for a player’s avatar or weapons), to functional items that improve in-game performance (e.g., weapons, power-ups, powers, etc.).

In November 2022, a bill was proposed in the Australian Parliament seeking to require video games containing loot boxes to be (i) classified as being suitable only for those aged 18+ and (ii) appended with a warning label. My understanding is that, contrary to popular belief, the draft Spanish law would only apply to loot boxes that contain rewards that have real-world monetary value (i.e., can be transferred to other players and ‘cashed-out’). Such loot boxes would have fallen within the definition of ‘gambling’ in most countries already. This draft law effectively ‘codifies’ that those loot boxes are regulated and sets out how this would be done. If something like this is adopted in Belgium (and indeed they should consider this), then it would resolve the unfortunate situation where participation in regulated gambling by adults is permitted but purchasing loot boxes is not due to licensing technicalities.

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Loot boxes were popularised through their inclusion in several games throughout the mid-2010s. By the later half of the decade, some games, particularly Star Wars Battlefront II, expanded approaches to the concept that caused them to become highly criticised. Such criticism included "pay to win" gameplay systems that favor those that spend real money on loot boxes and negative effects on gameplay systems to accommodate them, as well as them being anti-consumer when implemented in full-priced games. Due to fears of them being used as a source in gray-market skin gambling, loot boxes began to become regulated under national gambling laws in various countries at the same time.

A popular mechanic, particularly in some video games in Asia, was known as “Kompu Gacha.”  With this mechanic, players typically acquired a loot box or “random” pack of virtual items, typically by payment of some amount of money. As discussed above, the player would get some set of virtual items, they just didn’t know which ones until they accessed or open the loot box. The goal with Kompu Gacha was to collect a complete set of specific virtual items.

Meanwhile, the games should be overseen and regulated by the UK Gambling Commission (UKGC). In 2018 a Senate inquiry report, “Gaming micro-transactions for chance-based items”, recommended a comprehensive review into loot boxes in video games. This was followed in 2020 by the “Protecting the Age of Innocence” report from the House of Representatives Standing Committee on Social Policy and Legal Affairs, which recommended that loot boxes and other simulated gambling elements in games should be subject to age restrictions and warnings. Importantly, the most dedicated and highest-spending loot box purchasers, who are arguably most at risk of harm and therefore most in need of consumer protection, would likely choose to circumvent any ‘ban.’ Therefore, it must be duly noted that any approach that seeks to forcibly remove loot boxes may be unlikely to be of assistance to the most vulnerable players. This is similar to how technical bans of online gambling in many countries can be easily circumvented by dedicated gamblers and how an effective blanket ban is not feasible (Parke & Griffiths, 2004).

UK could class loot boxes as gambling to protect children

A Belgian loot box prevalence rate of 0.0% should be found amongst all games studied and amongst those games studied that were deemed suitable for underage players. Considering that some video games might contain loot boxes which are duly licensed by the Belgian Gaming Commission (whose confirmation was sought by the present study, as explained below), any games that were so licensed would have been excluded from the sample for the purposes disconfirming Hypotheses 1 and 2. The Belgian Gaming Commission instituted the ban through applying pre-existing gambling law that did not envisage technological developments, such as video game loot boxes. This means that, technically, the Belgian ‘ban’ on loot boxes was applied executively by the regulator (albeit based on duly passed legislation). Therefore, it cannot be said that the ban itself was truly approved through a democratic process.

Netherlands’ Laws About Loot Boxes

Mainland China was the first to require companies to inform players of the likelihood of obtaining various potential rewards since 1 May 2017. Industry stakeholders (such as the ESA and Video Games Europe in 2019) have demanded that this is done elsewhere as well, meaning that this requirement is technically in force in nearly all countries as industry self-regulation. In many cases, legislators hit a roadblock when trying to prove loot boxes violate gambling laws. Hypothesis 4 was accepted because all three preregistered potential circumventions of the Belgian ban in the three examined games were successful. Pre-downloaded UK versions of the games worked without any hindrance and allowed loot box purchase within geographical and jurisdictional Belgium, regardless of the Apple ID’s Country/Region settings being set to the UK or Belgium. The coder was also able to download the UK versions of the games from within Belgium and access the in-game loot box purchase pages and Apple App Store payment pop-up screens. The short answer on the primary issue is that most, “standard” loot box mechanics should not be deemed gambling, in most countries.

For example, state attorneys general may bring criminal or civil actions, or aggrieved consumers may bring challenges directly under most states’ anti-gambling laws. Even if loot boxes are presumptively legal and do not constitute gambling under applicable law, consumers may bring lawsuits based on consumer protection or false advertising laws if they believe that the loot boxes are promoted in an arguably misleading way. However, on other more open platforms, such as PC and Android, an installation file that does not need to be downloaded from ‘official’ app stores and can be easily obtained by potential players through any online channels, such as an .apk (Android Package) file, could be used to play games. These games would be even more difficult to monitor and enforce against, as platform-based regulation would not be possible. Belgium is the appropriate jurisdiction to study in this context because the other two candidate jurisdictions (the Isle of Man and the Netherlands) are less suitable.

Developers have to keep the lights on and this is one of many business models that benefit companies within the gaming industry. "We strongly believe that our games are developed and implemented ethically and lawfully around the world, and take these responsibilities very seriously," he added. “[…] We are increasingly concerned that gambling is now part of everyday life for children and young people,” said the chief executive Zoë Osmond. "We will also continue to work constructively to support our players in partnership with Government and other organisations." "It is now for politicians to review this research, as well as the evidence of other organisations, and decide what legislative and regulatory changes are needed to address these concerns," she said. GambleAware’s chief Zoe Osmond said the charity was "increasingly concerned that gambling is now part of everyday life for children and young people". Please include what you were doing when this page came up and the Cloudflare Ray ID found at the bottom of this page.

Therefore, when designing and implementing such programmes, countries ought to be mindful of potential industry influences and ensure that the relevant audience is not potentially misled. For example, how much and what kind of (potentially valuable) input the video game industry should be allowed to provide to such programmes should be carefully considered. In addition, as with previous loot box prevalence studies, the present study examined the highest-grossing video games and so the results might differ if the sample was selected randomly amongst all available iPhone games.

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However, what percentage of Belgian players that represents is unknown and by how much (if any) average loot box spending has reduced remains the subjects of further research. Do purchasable randomised reward mechanisms in video games (loot boxes) constitute gambling? Opinions often rest on whether virtual items obtained from loot boxes have real-world value. Using market data from real transactions, we show that virtual items have real-world monetary value and therefore could be regulated under existing gambling legislation. Notably, as the present study has proven, the Belgian ‘ban’ on loot boxes has not been actively enforced. Another country emulating the Belgian regulatory position as it currently stands is unlikely to achieve a significantly better result.

This was due in part to allegations that some game operators did not disclose the odds of getting the items needed to complete a set and the further allegation that the odds were not fixed, thus making it harder to get the rare items. From this, it appears the UK Gambling Commission is looking to game publishers to assist in curtailing unauthorized secondary markets. The fact is that the line between social gaming and gambling is increasingly becoming blurred. What may appear benign today can quickly morph into something a lot more sinister tomorrow in response to market opportunities and consumer trends.