UK to stop short of banning loot boxes in Gambling Act Review

One of the more controversial topics in the upcoming Gambling Act Review has been ruled out, as the government is unlikely to address loot boxes in video games as part of the new White Paper. This is done as officials fear that trying to regulate loot boxes under the laws aimed at the gambling industry, there may be "unintended consequences."

These consequences remain fairly cryptic. Loot boxes have drawn criticism all over the world, for their gambling-like nature, but were mostly found not to be a form of gambling after all. These digital boxes were banned in Belgium, but an attempt to prohibit them in the Netherlands has not been backed by the courts

This doesn’t say that loot boxes can be legally offered in the Netherlands, but it does mean that the argument against them being gambling is running thin. Now, the UK is planning to not attempt legislation under its gambling legislation.

Popular games such as Call of Duty, FIFA, Counter-Strike, and many others do use loot boxes to generate microtransactions to maintain engagement and generate a very healthy income for the developers and publishers.

Nadine Dorries, the Minister of Culture, has been criticized for not acting more decisively. Dorries, though, responded that there are plans in place and they will involve the video gaming industry. The sector itself is worth more than $8 billion in the United Kingdom alone. The minister is confident that this is the right call. Nadine said:

"Our view is that it would be premature to take legislative action without first pursuing enhanced industry-led measures to deliver protections for children and young people and all players."

She assured me that all options have been taken into consideration. Restricting children's accounts, though, would only make some children more inclined to use their parents’ registrations or register accounts in their name, reducing parental control. The biggest factor for the government to act this way was the fact that there is no direct causative link between loot boxes and problem gambling.

However, there is a clear "association." In one in-depth piece, Casino Guru explored the subject matter, looking for similarities between slots and loot boxes. The information comes from 15 peer-reviewed studies which is one of the most significant arguments to date as to why loot boxes should be banned or conversely left as they are. There are other considerations that have shaped legislators’ opinions or at the very least, reluctance to act more decisively.

For one, loot boxes cannot be exchanged back for real money. There existed an opportunity to gamble with loot box goods, known as skins, but regulators have cracked down on those websites. Regardless, there have been instances where the UK Gambling Commission had to tell websites not to allow people, and specifically children, to swap virtual goods for real money.

The plan, for now, is to work with the gaming industry and hope that the necessary changes will be passed. However, video game companies make a tidy profit on loot boxes, and it could be hard to inspire them to self-regulate to the detriment of their own bottom line. According to David Zendle, a video games expert at the University of York, the industry will not be able to make adequate decisions with regard to player protection.

Cited by The Guardian, Zendle said that enabling the parties that benefit from loot boxes to regulate them would be tantamount to allowing foxes to guard the hen house. Meanwhile, Spain has already floated the idea of addressing loot boxes more thoroughly to protect children.

Image credit: Activision Blizzard