British politicians are calling for the regulation of loot boxes in video games.
Regulators in both the United States and United Kingdom have been investigating whether the loot box mechanics featured extensively in video games should be legally classified as gambling.
The British Department for Digital, Culture, Media & Sport Committee recently released a report, which criticized the games industry for its “lack of honesty and transparency” regarding the potential harm of loot boxes on youth. The report also recommended that games that feature loot boxes that are purchased with real world currency should be regulated under the 2005 UK Gambling Act and banned from being sold to children. The members of the committee have stated that they are well-aware that the games industry and its representatives will not be satisfied with any legislation they make.
The damning report cites a 2018 Gambling Commission survey, which showed that 31% of teenagers paid for loot boxes or other microtransactions for in-game items. The report specifically referred to Electronic Arts’ FIFA franchise as one of the biggest violators of the Gambling Act. According to Electronic Arts, roughly half the money that the company makes has come from extra digital content that is paid for in the loot box-driven Ultimate Team mode and because previously purchased content cannot be carried over to future installments.
However, the committee could not officially confirm that loot boxes have fostered a gambling addiction among youth, but the 2018 Gambling Commission survey does make it sound that it likely has. As the report argues, it has turned video games into games of chance as the odds of unlocking certain items in loot boxes is never disclosed prior to them being purchased, which has been the root of opposition to loot boxes. Experts have made it clear that the core problem of loot boxes isn’t that they could lead to gambling addictions, but that they take advantage of people’s ignorance and their psychological predisposition to gambling.
“It is not that it is a gateway; it is that it is a way that video games companies may, accidentally or incidentally, be profiting from problem gambling among their consumers,” Dr. David Zendle told the Committee.
The games industry has previously disputed arguments that loot boxes are unethical and foster gambling addictions. Most notably, Electronic Arts rejected the committee’s characterization of their loot box mechanics by referring to them as “surprise mechanics” and likening them to Kinder eggs or other surprise toys. The committee was not moved by this testimony as the recent report explains in detail.
It is important to note that while the committee’s report is not officially law, but if Parliament decides to follow its recommendations then loot boxes could become regulated in the United Kingdom.
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