Are loot boxes’ days numbered?

The Entertainment Software Association (ESA) has spoken out about a proposed ban on loot boxes, arguing that they don’t constitute gambling.

The video game industry lobbyist group issued a statement saying: “Numerous countries, including Ireland, Germany, Sweden, Denmark, Australia, New Zealand, and the United Kingdom, determined that loot boxes do not constitute gambling.”

The ESA’s remarks follow the proposed ban on loot boxes, which can lead to players spending within games, by US Senator Josh Hawley. Earlier this week, Hawley announced a bill that would ban loot boxes and pay-to-win micro-transactions, reports the BBC.

Of his proposed Protecting Children from Abusive Games Bill, the senator said:

When a game is designed for kids, game developers shouldn’t be allowed to monetize addiction. And when kids play games designed for adults, they should be walled off from compulsive micro-transactions. Game developers who knowingly exploit children should face legal consequences.

The bill needs to be passed by the House and Senate and signed by the president before it becomes law.

Following reports of what Hawley believes is the way forward in protecting children and user addiction, the ESA said: “We look forward to sharing with the senator the tools and information the industry already provides that keeps the control of in-game spending in parents’ hands. Parents already have the ability to limit or prohibit in-game purchases with easy-to-use parental controls.”

Mixed views

The topic of loot boxes has, in the last few years, received considerable press coverage. Many believe that it is gambling, which children may be unaware of because they may think they are only playing a game.

Last April, game developers were given eight weeks to fix in-game loot boxes after they were found to have violated Dutch gambling laws. In the same month, the Belgium Gaming Commission ruled that four in-game loot boxes were illegal and that they should be removed.

Yet, as the ESA points out, not everyone agrees that loot boxes are a form of gambling. This is highlighted by France’s regulator, Autorité de Regulation des Jeux en Ligne (ARJEL), and the CEO of Electronic Arts (EA). Ireland is one nation that has shifted its stance on the topic.

With such mixed views on whether loot boxes constitute gambling, several jurisdictions have issued reports or are planning investigations to find out more.

For instance, scientists at the University of British Columbia’s center of gambling research published a paper that claims to have found a link between loot boxes and problem gambling. In online questionnaires completed by 144 adults and 113 undergraduates, most participants – 68.1% and 86.2% – were of the opinion that loot boxes were a form of gambling.

Elsewhere, the US Federal Trade Commission (FTC) is to start its own investigation into the matter on August 7. Beginning the process with a workshop, “Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes,” the FTC wants to determine the issues surrounding in-game purchases and whether they should be considered gambling.