Gambling Commission Report Fails to Condemn Loot Boxes

Loot boxes are not currently a major problem, according to the United Kingdom Gambling Commission in a recent report focusing on young people and gambling.

The UKGC did condemn the activity of skins gambling, but many people have shown surprise at the non-committal stance over loot boxes.

The wide-ranging report, Young People & Gambling – 2018, has picked up on some worrying trends. For example, there has been a fourfold rise in the number of underage children gambling in the region. A significant portion of them are already showing signs of serious gambling addiction.

Loot boxes off the hook?

The UKGC is not defining loot boxes as being a gateway into more serious forms of gambling. However, loot boxes are receiving condemnation in numerous European countries, some of which have already banned them.

Loot boxes are options in online video games where players can buy them order to earn in-game items. They can offer things such as aesthetic boosts or weapons. There are hundreds of potential items in these boxes, with many youngsters spending thousands of dollars on them to try to obtain rare items.

The report does say that skins gambling is an illegal form of gambling. However, this is somewhat disappointing, because skins gambling is very similar to loot boxes. Of the 2,520 people surveyed, 31% of them “claim to have ever paid money or used in-game items to open loot boxes to get other in-game items”.

Baby steps

The fact that a question relating to loot boxes was included in the survey is a step forward. Therefore, there may be potential changes in future legislation to account for this relatively new phenomenon.

However, the UKGC is adamant that loot boxes are not a form of gambling. It said: “We’ve not in any way, in the survey, referred to it as exposure to gambling. The reason we’ve asked that question is that it’s a very popular subject matter and we want to try and make sure that we have as much information and data around it as possible.”

This is a strange stance by the commission. Loot boxes clearly are a form of gambling. The players pay real currency in exchange for tokens they can spend to open the boxes. There are random probabilities for each item depending on its rarity. Therefore, it is a game of chance where players use real money to open the virtual boxes.

The issue with skins betting

The UKGC decreed in its report that skins gambling is a form of gambling.

Skins gambling is most popular with the Counter-Strike: Global Offensive and Dota 2 games, among others. Players often wagering skins on their games between one another, with the winner taking the opponent’s skins. These skins can hold a lot of value depending on their rarity.

Usually, the operators of these video games do not allow this form of gambling. Skins gambling is mostly done through third-party sites, and many of them have been shut down with the help of the UKGC and the video game developers.

Of those surveyed, only 3% said they have used in-game items to bet on the outcomes of games.

The UKGC said: “The Gambling Commission takes the view that the ability to convert in-game items to cash, or to trade them (for other items of value) means they attain a real-world value and become articles of money or money’s worth.

“Where gambling facilities are offered to British consumers, including with the use of in-game items that can be converted into cash or traded (for items of value), a gambling licence is required.”

The main difference in comparison to loot boxes is that players are not betting these in-game items with other players.

Countries rallying against loot boxes

A number of countries are already banning the likes of loot boxes. A Gaming Regulator European Forum declaration has been signed by 14 European nations.

The declaration describes loot boxes as blurring the lines between gambling and gaming. Belgium has gone so far as to ban loot boxes from being targeted at Belgian citizens if they are deemed to be breaking Belgian gambling laws.

Belgium is currently involved in a battle with Electronic Arts (EA), which is still targeting the country’s residents despite the ban.

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