Loot Boxes – Bending the Video Game Gambling Laws?
Purchasable in-game loot boxes – the video games’ equivalent of Kinder eggs or an unregulated form of gambling, available to even the youngest of gamers? This new business model of microtransactions has gathered the attention of many authorities and organisations who believe the system conflicts with the video game gambling laws. Are loot boxes gambling and should they have some restrictions, or should they be forbidden completely?
Find the answers to those and many other questions in this blog post specifically focused on the infamous loot boxes. We will begin by providing you with a definition of what exactly loot boxes are and use some of the most famous examples in the gaming industry. Once that is done, we will look into the grey areas of the video game gambling laws and see for ourselves why some parties see games with loot boxes as a form of gambling that should not be legal.
Video Game Loot Boxes – Definition
Video game loot boxes, also known as loot or prize crates, are consumable virtual items found in video games. Depending on the game, they can be purchased with in-game currency, real money, or both, and boast a randomised selection of other virtual items. By opening a loot box, players can get rare loot, exquisite items, customisation features, and in some cases, powerful game-changing items.
Of course, most online multiplayer games refrain from offering players the opportunity to purchase powerful game-changing items in exchange for real money. Therefore, most microtransactions, loot boxes included, provide players with purely cosmetic items like skins, icons, stickers, and so on. For example, players in CS:GO can open loot boxes that contain weapon skins that modify the gun’s appearance without changing its damage or other stats.
Origin of Loot Boxes
The loot boxes concept originated from massively multiplayer online role-playing games somewhere between 2004 and 2007. As those titles were trying to attract a large number of players, they were either free-to-play or required a one-time purchase. Therefore, selling loot boxes was seen as a natural and stable way to generate ongoing revenue to support the game while offering players new content and cosmetics.
However, during the mid-2010s, games with loot boxes began receiving criticism that their model of microtransactions negatively impacted the gameplay. Some games included “pay to win” gameplay systems where players who purchase loot boxes and other similar products would get a gaming edge, otherwise unavailable. Around the same time, the use of the loot boxes system bumped into another grey area in the online gambling laws, skin betting.
CS:GO and Skin Betting
In 2012, Valve released Counter Strike: Global Offensive, the next heir of the enormous franchise. However, the loot boxes skin system made CS:GO stand out from its predecessors. Whenever you level up or participate in events, you have a chance to receive a random low-cost skin, or a locked loot box. Of course, most players were not so interested in the easily obtainable skins as they weren’t that attractive and cool.
However, if you purchase a key from the Steam store and use it to open a box, well, that is where the “real fun and drama” begins. The system of opening the CS:GO loot boxes is essentially the equivalent of the “gacha” games. It is a mini-game inside Valve’s shooter that is in many ways similar to some forms of online gambling like scratch cards or slots. All you have to do is select the type of loot box you want to open and press the magic button “gamble”, pardon, “open”.
Then, a single reel, with all available skins for that specific box, starts spinning, and you are guaranteed to receive the cosmetic on which the “wheel” stops. Usually, those video game loot boxes contain some boring and common items, in addition to some rare and even extremely rare items. In fact, some CS:GO skins are so rare that there are just a few bunches of players that have them. Having such hard-to-get items is where things start to get interesting.
Those items, predominantly weapon skins, were not only accessible in CS:GO but also in your Steam inventory and could be traded or sold. Soon after, the game’s loot boxes and items appeared as a lucrative opportunity for profit. People began selling and purchasing different weapon skins, costing as much as a few thousand pounds. Third-party websites were created to trade items safely, of course, with some additional fees.
Unlike today, when you can find many popular eSports at the betting sections of some of the top gambling sites in the UK, unregulated online platforms offered CS:GO players of any age the opportunity to bet their skins on matches and tournaments. This form of online gambling was not regulated and had no actual age restriction whatsoever. Overall, the example with CS:GO accurately represents some of the dangers surrounding the online loot boxes.
Loot Boxes in Other Games
Now that we have looked at the case of Counter Strike: Global Offensive, we will move the focus of our blog post to other popular loot boxes. Without a doubt, when thinking of any kind of loot crates, two names appear instantaneously, the games Overwatch and FIFA. Therefore, in the following chapters, we will look into both of them.
Overwatch Loot Boxes
Overwatch is a multiplayer team-based first-person shooter, developed and published by Blizzard Entertainment. The game places two teams of six members each in a clash with a varying objective, depending on the map. The essence, however, is always the same, your team must defeat the enemy. To do so, players must choose different heroes that take up key roles in the match.
Anyhow, since Overwatch’s introduction in 2016, players can customise their gameplay by adding skins, emotes, sprays, and stickers to their favourite heroes. Usually, you get those by unlocking them from loot boxes or purchasing them with in-game currency. While playing the game and levelling up, you receive such loot boxes and can theoretically unlock everything for free. However, players can also purchase those mystery crates with real money.
In 2018, loot box scandals escalated to the point where countries such as Belgium, the Netherlands, France, and the UK classified Overwatch’s loot boxes as a form of gambling: hence, illegal. The Belgian government published a warning that anyone who does not remove paid video game loot boxes from their services will be sentenced to up to five years and may receive serious fines.
Nevertheless, Blizzard was not the only company targeted by European video game gambling laws. Counter Strike: Global Offensive’s Valve and NBA’s 2K were also affected by the legislation changes. Their response was to swiftly block all Belgian and Dutch players from opening paid loot boxes. Blizzard Entertainment soon followed and removed any loot box purchase options from Overwatch and Heroes of the Storm.
FIFA Loot Boxes Scandals
Since we have looked at some of the most popular online multiplayer games with loot boxes history, we cannot ignore talking about FIFA. Due to its nature, the football simulator enjoys a wider spectrum of players. You can see adults enjoying the sports game just as much as some younglings. In fact, because the game does not contain any violence, parents often encourage their young gamers to play games like FIFA.
However, player packs, which act just like loot boxes, can be dangerous for the junior audience. For example, in 2019, four children spent nearly £550 in three weeks buying player packs on the family’s Nintendo Switch console. Initially, the children’s father had bought them a single pack for £8 but did not realise that his kids saw how he made the purchase.
Mr Carter and his wife only found out what had happened with their bank account when their card was declined elsewhere. His four children are under the age of 10 and did not understand the impact and weight of their actions. Luckily, Nintendo agreed to a full refund and quickly removed the purchased players.
Nevertheless, according to the father, he felt that the in-game concept of buying player packs without knowing what was inside was unethical, especially when dealing with children as young as the age of 3. Furthermore, Mr Carter also adds that the only way you can gather and assemble a great team is essentially by gambling and opening loot boxes. To end this section, we have included a short table with some popular games and what you could get from their loot boxes in the past.
| 🎮 Video Game | 🎁 Loot Boxes Rewards |
|---|---|
| Counter Strike: Global Offensive | Weapon Skins, Gloves, Stickers, Sprays |
| Overwatch | Hero Skins, Emotes, Sprays, Icons |
| FIFA | Player Cards |
| League of Legends | Skins, Icons, Essense, Shards |
| PUBG | Weapon Skins, Clothes, Icons |
| Heroes of the Storm | Hero Skins, Emotes, Sprays, Icons |
In Discord with the Video Games Gambling Laws?
The responsible gambling organisation BeGambleAware commissioned new research by the universities of Plymouth and Wolverhampton to explore and evaluate the link between gaming loot boxes and problem gambling. The universities found that loot boxes are “structurally and psychologically akin to gambling”. Also, the experts verified that a large number of children are opening such loot boxes. In the listing below, you will find some key findings.
- Up to 40% of children playing video games open loot boxes
- Roughly 5% of gamers generate half of the entire revenue from the loot boxes
- Twelve out of thirteen studies show connections between loot boxes and problem gambling behaviour
- Young men are most likely to use loot boxes
Amidst the loot boxes chaos and discussions, many governments have considered this modern issue and are already looking to find a solution. For example, the UK’s House of Lords has approved the Gambling Act and has clearly stated that loot boxes should be firmly regulated as “games of chance”. Because of that, the government amended the UK gambling laws, shortly after. France has also taken similar action and banned the use and sale of any loot boxes for real money on their territory.
If a product looks like gambling and feels like gambling, it should be regulated as gambling. In the House of Lords Gambling Committee report
According to a spokesman for Ukie, the national games industry body, probability disclosure has already been introduced to the major gaming platforms. Furthermore, a new paid random item descriptor was added to the PEGI age rating system to inform players. New tools are set on all significant game devices so users can manage, limit or turn off the access to loot boxes.
Drawing Conclusion on the Loot Boxes
Even though thousands of players worldwide enjoy the opening of loot boxes experience, the facts cannot be ignored. If we look at the cases presented in our blog post, we can notice many similarities with gambling in both the loot box product and the gamers’ behaviour. Regardless of whether loot boxes should be forbidden entirely and outlawed, one is certain; governments must recognise their gambling nature, strictly regulate them, and restrict children from accessing them.
Answering Frequently Asked Questions
Alas, we have reached the end of our blog post devoted to loot boxes; we hope we have been informative and introduced you to this hot topic. Despite our best efforts to provide you with all the essential details, there is always the chance of leaving something out. For that reason, we prepared answers to the most popular questions regarding loot boxes.
