Despite a crackdown announced this autumn, loot box legality is still under investigation.
In September 2018 Neil McArthur, chief executive of the UK Gambling Commission, signed a declaration addressing “the risks created by the blurring of lines between gaming and gambling”.
This month the UKGC released a report about the impact these boxes had on young people, but has qualified it by saying more research, particularly among parents, is needed.
With the UKGC still not reaching a definite conclusion as to whether or not loot boxes should be classified as gambling, and as such whether they should be banned for players under the age of 18, the whole idea of regulation is thrown into confusion.
31% of kids used loot boxes
The Young People and Gambling report, which surveyed 2,865 children aged between 11 and 16 years old in the UK, revealed that 31% of young people have opened a loot box in the past year, using either in-game or real-world currency.
It is unclear how many of these children made the purchase themselves, but most of the real world currency purchases will likely have been made by a parent or other adult, making it more difficult to regulate who is actually opening the boxes.
Despite the high numbers of children opening loot boxes, the UKGC did not use the term gambling when talking about the boxes and it has listed National Lottery tickets and scratch cards, as well as bets between friends and family, as higher risk factors than loot boxes.
Online gambling, on the whole, appears to be unpopular among the age group, with 60% of respondents agreeing that they thought online gambling would result in them being frowned upon by their parents.
Much like the regulations, the report is vague when it comes to loot boxes and the survey’s commissioners have said this was intentional: “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.”
The regulator has promised to gather more information on the topic of loot boxes before the end of the year, and also hopes to survey parents to find out if they understand what loot boxes are and their possible links to gambling.
Belgian loot box ban
In Belgium, however, loot boxes have been banned, and as a result, Square Enix has cut three of its popular games in the country. The company has removed games including popular franchises Final Fantasy and Kingdom Hearts following the ban.
The virtual treasure boxes, which contain mystery in-game add-ons that players can either buy with real-world money or in-game currency, have been at the center of a controversy surrounding whether or not the concept exposes young players to gambling before they turn 18.
Mobius Final Fantasy, Kingdom Hearts Union X and Dissidia Final Fantasy Opera Omnia have all been removed from the market in Belgium. Square Enix published a statement saying the games have been removed because loot boxes “present uncertain legal status of loot boxes under Belgian law”.
Other developers have been modifying games to comply with the new regulations in order to avoid having to remove them from the market completely, despite the boxes generating large amounts of revenue for many of them.
EA has in turn refused to modify its FIFA games, saying the Ultimate Team mode does not equate to gambling, which led to the Belgian government launching a criminal investigation into the publisher.
The Belgian Gaming Commission had previously published this statement in respect of the ban: “[We have] come to the conclusion that real-money loot boxes are gambling. This means that in Belgium, these types of games are prohibited unless licensed. If they do not adapt their games, they all potentially face criminal prosecution.”
The commission’s findings concluded that loot boxes should be banned and the decision was approved in April 2018. Its main concern was the appeal of loot boxes to children, and how they could be seen as a form of underage gambling.
Regulators around the globe could follow in Belgium’s footsteps and introduce similar bans, with the Gambling Regulators European Forum saying in September that it needed to “address the risks created by the blurring of lines between gaming and gambling”.
In the UK, 450,000 children are understood to take part in gambling activities on a regular basis. With more than 1m children being exposed to gambling by loot boxes in the country alone it is a sizeable problem that will need to be tackled.