UK Lawmakers ‘Call for Evidence’ Suggests Loot-Box Clampdown Coming

Posted on: June 8, 2020, 03:04h. 

Last updated on: June 8, 2020, 03:56h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

The UK government could include loot-box regulation as part of an expected wider overhaul of gambling legislation in the country.

The Department for Digital, Culture, Media and Sport (DCMS) will this week launch a call for evidence on the consumable in-game devices found in popular video-game titles, amid concerns over their impact on children.

The director of the UK’s National Health Service Claire Murdoch said recently that loot boxes were “setting kids up for addiction by teaching them to gamble.”

The process will seek public views and evidence to help examine links to gambling-like behaviour and excessive spending in games. Findings will be considered alongside a review of the Gambling Act, the DCMS said.

In a move that would have far-reaching implications for the $7.2 billion UK video-games market, it’s anticipated that the DCMS is planning to reclassify loot boxes as gambling.

This would make video-game publishers subject to the same oversight as gambling operators unless they agreed to modify their games for the UK market.

What’s a Loot Box?

Loot boxes are consumable in-game devices that offer the chance to win desirable digital items, with the prize being determined by a random number-generator. Although they are encountered while playing, gamers can often pay a small sum — a “microtransaction” — to access extra boxes.

Detractors? — which in many cases includes gamers themselves — complain the system is addictive and that it apes the mechanics of gambling.

In some cases, a game is impenetrable unless a player splurges on loot boxes in the hope of winning special skills and weapons.

The UK Gambling Commission has previously said that although it has significant concerns about the mechanisms, it was “constrained by current legislation.”

But the DCMS has pledged to “revisit” the 2005 Gambling Act. After 15 years of market liberalization, the gambling industry is facing a public backlash in the UK, and legislative reforms will offer a window of opportunity for lawmakers to reconsider the nature of gambling in the modern age.

$23 Billion a Year

Some countries have already banned loot boxes — most recently Holland and Belgium — and games publishers have been forced to tweak their products for compliance in those markets.

In the US, the Federal Trade Commission is investigating whether consumer protections surrounding video games need to be strengthened.

Loot boxes have recently become a vast revenue stream for games publishers — worth some $23 billion per year, according to Juniper Research. In February, FIFA 20 publisher Electronic Arts (EA) announced to investors it had made nearly $1 billion from microtransactions alone in the previous quarter.

A University of York study published last year found that 71 percent of the most popular games available on the Steam platform employed loot boxes, compared with four percent ten years ago.