New study in Belgium finds loot boxes spur teen gambling

Loot boxes, prize crates or loot crates are virtual items that are part of many popular online multiplayer games on mobile devices and computers. The "loot" or special item awarded from loot boxes can range from skin for a weapon, a special item cosmetic item, an avatar, armor or another award that grants video game players ways to customize or show off in a game.

Loot boxes promise unique prizes

Modern-day video games leverage loot boxes as a way for monetization and they earn extra proceeds post-game launch. While the lucrative loot crates also generate a fresh stream of revenue for the game developers, they are also subject to criticism in light of the mechanics used when a prize is awarded.

In essence, loot boxes award prizes much like how a slot machine operates. While those mechanics are sometimes referred to as "surprise mechanics," ultimately, the chances of the user winning unique, rare or expensive items are slim considering that the prize is awarded randomly. Much like hitting a jackpot while playing slots, items from loot boxes that are valuable have a really tiny chance to drop.

This otherwise means that in most cases, the players would receive an item that isn't as unique or valuable in-game as they may hope for. To complicate things further, while some loot crates are opened for free, often, they require a key or a token to be accessed.

However, keys, tokens or coins that unlock loot boxes are payable with real money. At the same time, even if a customer opens a loot box and receives a rare, unique or expensive item, their options are limited to the confines of the game or the platform they are using.

Still, some third-party platforms do offer an exchange of virtual items where their value can be converted back to real money. Considering the involvement of real money and children, loot boxes continue to spark criticism in markets across the globe.

Belgium's ban on loot boxes in place since 2018

With more European countries looking into the mechanics of loot boxes, the fears about the impact of games with such awards on children started to pile up. Belgium is one of the countries that banned the popular loot boxes several years ago.

In 2018, the country effectively banned the use of loot crates, loot boxes or similar mechanics. At the time, Belgium recognized that the use of such in-game awards within video games is in breach of the established gambling regulations. Acknowledging that loot boxes violate the gambling legislation, the country's gambling regulatory body, the Belgium Gaming Commission, banned the use of such mechanics.

The ban on loot boxes followed an investigation by the Commission into several popular games. The list included: Counter Strike: Global Offensive, FIFA 18, as well as Overwatch. This probe uncovered that the online players were identified to have an emotional profit expectation, meaning that the uncertainty of what random award would be granted was tied to profit expectation.

At the same time, some online players considered that purchasing and opening loot boxes would enable them to have an in-game advantage. In reality, this wasn't always the case, according to the gambling regulator in Belgium. Among other issues uncovered by the Commission are the "endless" supported methods for depositing real money into gaming accounts and the vagueness surrounding the random number generator behind the loot boxes mechanic.

Besides confirming the ban on loot boxes in video games, Belgium warned about the consequences of breaching the ban. Video game developers offering the mechanic were asked to remove the random awards or implement mechanics that comply with the gambling regulations. The Commission also warned about fines and imprisonment, while even tougher penalties were proposed in cases where minors are involved.

Study finds 80% of children play games, 60% admit to gambling

When it comes to the impact of loot boxes on children, new research focused precisely on this topic, uncovering concerning patterns and sounding the alarm. The new research was the result of the hard work of experts at the Media Culture and Policy Lab of KU Leuven. The researchers also teamed up with experts from UCLL University College and UGent for the new study, which was the first of its kind in Flanders, as announced by the media outlet Belga news agency.

The newly released research analyzed the habits of approximately 2,300 children between the ages of 12 and 17 for a period of more than three years. Divided into rounds, the study closely monitored the activities of groups of approximately 500 participants.

A breakdown revealed that approximately 80% of the research participants self-described as regular gamers. Concerningly, some 60% admitted to participating in different gambling activities over the last year.

This data sounded the alarm, considering that gambling is prohibited to anyone under the age of 18 in Belgium. Of those who admitted to gambling, 33% said they purchased scratch cards. Betting among friends was nearly as popular and the response of 35% of the participants.

Loot boxes as a gateway to gambling

Besides insights into the habits of minors when it comes to gaming and gambling, the new research uncovered a concerning trend. The experts participating in the study concluded that there's a connection between simulated gambling as a part of video games and gambling in the real world. Per the research, children exposed to simulated video gambling may have an increased intention to engage in real-life gambling activities after only one year.

Rozane De Cock, a Professor at KU Leuven, explained: "The effect went in that direction, not the other way around." She added that the new study didn't find evidence that children exposed to gambling activities would "seek out gambling features in video games." De Cock added: "Young people exposed to gambling mechanics in video games during the first round of research were more likely to exhibit gambling behavior later on."

The Professor explained that there's a dual risk when it comes to the exposure of children to gambling features. On one hand, that's the simulated gambling features part of video games, while on the other, there are many streamers that promote such games and open loot boxes during live streams, engaging constantly with young people.

"Even though only a small percentage of young people exhibit problematic gambling behavior, it’s dangerous to open the gate," the expert added. According to De Cock, the current loot boxes ban in Belgium can be bypassed by young people who use internet tools such as VPNs.

Parents need to be more involved in their children's online activities

Despite the ban, loot boxes in Belgium continue to reach children. Supporters of enhanced regulations may suggest that a blanket ban may resolve the issue. However, Professor De Cock disagrees, and in her opinion, a ban on online games wouldn't fix the situation.

De Cock suggested that in the digital age, the involvement of the parents is crucial. She encouraged parents to be more involved in their children's activities and at the same time pointed to the importance of the online gaming community for young people who "feel connected to others."

Loot boxes seek to incentivize the players and at the same time generate proceeds for the game developers. This helps deliver new content to previously released games while contributing to the support and maintenance costs associated with online gaming.

Yet, the way loot boxes award prizes and their close resemblance to online slots or other casino games undoubtedly will continue to raise concerns. In that line of thought, Belgium isn't the only European country that sounds the alarm about the hidden dangers of loot boxes and the impact such mechanics may have on children.

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