Playing a game of football isn’t gambling. However, playing a game of football where the winning team gets hard cash and the losing team pays out is gambling. Equally, playing a standard game of poker is gambling, but playing a game of poker for no money — yes, some people do that — is not gambling.
With that in mind, it should come as no surprise that over 60 percent of British people said they believed loot boxes should be regulated as gambling. Loot boxes often involve taking a risk and paying money in the hope that you might win some rare in-game treat like a new character or weapon. Sometimes you win big, and sometimes you wind up with something no one really wants, like a new badge for your profile or a new color of hat for your character.
What gambling is
Where there’s a game, money, and risk, that’s gambling. As the guy who conducted the above survey, I’m amazed that this is still a debate. I’ve worked in the online gambling industry for years. I play poker, blackjack, and roulette in my spare time, and my day job is to review and compare online casinos. I love gambling, and I make no qualms that gambling is what I do and what I promote.
Because what I do is classified as gambling, it’s heavily regulated. Online and offline gambling institutions are legally obliged in the UK to encourage responsible gambling by supporting campaigns like “When the Fun Stops. Stop”. It’s also against the law to market our services to children or in public, where children might see these messages. All of that is understandable and reasonable. However, what is not understandable or reasonable is how loot boxes are able to flout these same rules.
Begun, the loot box wars have
The concerns about loot boxes reached fever pitch last November with the controversy surrounding EA’s video game Star Wars: Battlefront II. Without any real threat of litigation, EA Games exploited the legal loophole created by loot boxes more than any mainstream video game previously had, many believed. Some of the loot box minigames even mimicked the design of slot machines.
The behavior of some players — spending up to $90 of real money in one sitting in a game that costs $60 — showed how much like an online casino this game really was. It’s easy to see how this could happen. PlayStation, Xbox and Steam accounts, along with the online subscription services often attached to them, mean many video game manufacturers already have their players’ card details. So, paying for loot box after loot box is just matter of click, click, click.
Reaction from politicians was fierce. Dutch and Belgian authorities called for loot boxes to be regulated as gambling, and so too did Hawaiian state Representative Chris Lee, who called it a “Star Wars-themed online casino.” Yet, the U.K. Gambling Commission weighed in with a different take. While it expressed concerns about the rise of loot boxes, its stance is that the prizes in loot boxes have no real-world value. As such, loot boxes don’t constitute as gambling because there is no monetary risk involved. The U.S. government has taken a similar stance.
This is complete nonsense. The idea that the prizes in loot boxes have no real-world value imagines that the people who invest hours and hours into their video games would be unable to put a price on their progress or certain aspects of the game. They definitely could. People are willing to pay hard cash for the upgrades contained in expansion packs for Call of Duty, The Sims, or World of Warcraft precisely because people are able to put a price on in-game upgrades.
Where expansion packs offer the guarantee of an upgrade, loot boxes offer risk. It’s this risk which makes buying loot boxes gambling and buying expansion packs not.
Beyond the loot box
An argument against closing down loot boxes is the fear of opening up Pandora’s Box. After all, buying randomized packs of collectible trading cards may also count as gambling. The principle is the same as loot boxes. Children pay money for a pack of randomly assorted cards for their collection. Some of these cards are rare and valuable, but some are not.
As with loot boxes, the stance of the U.K. Gambling Commission would be that the rare cards have no real-world value. Yet, if that’s true, why are they being sold on eBay for real money? Both buying loot boxes and buying card packs are gambling because they involve the exchange of money in the hope that you may get something of real-world value in return.
Though, there is no need to worry about a Pandora’s Box or a slippery slope, because not everything needs to be regulated in the exact same way. The law can and does recognize nuance.
Take regulations on “gambling machines” in the U.K., for example. There are nine categories in total and they cover everything from claw machines, where children can spend pennies in exchange for the hope of winning a prize, to online poker machines, where adults can spend up to £5 at a time in the hope of winning up to £10,000.
As such, regulating loot boxes shouldn’t be problematic or controversial. Indeed, it’s already happened in some extreme cases. In Japan, a particularly predatory and aggressive form of loot box known as kompu gacha was made illegal way back in 2012.
In the U.K., “skin betting” is being stamped down on. This practice operates in much the same way as loot boxes, but it gives players the option to immediately trade in the prizes they may or may not win for money. The two men behind Futgalaxy.com, a skin betting website which was unofficially attached to another EA title, FIFA 18, were arrested and charged with the promotion of underage gambling.
Gambling law is need of an overhaul which effectively categorizes and regulates all of these gambling-lite options. Loot boxes may not fit the legal definition of gambling, but this is precisely the problem. The overwhelmingly negative reaction to loot boxes shows how the definition of gambling many governments have is out of touch. Without classification or any real rules, video game manufacturers will continue to intentionally blur the lines and take as much money from children as they can in the process.
Neil Walker is an iGaming expert and the Editor-in-Chief of Live Casino Comparer: a reviews and comparison website for online casinos and online betting games. Neil’s website features all of the latest insider news and comment from within the online gambling industry.