Last year the House of Commons published a damning report on the gaming industry and the exploitative ways that it uses loot boxes to make money specifically from children.
In response to last year’s report, the British House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry has published a followup report recommending the UK Government should reclassify loot boxes as gambling.
The report requests that the government “must act immediately to bring loot boxes within the remit of gambling legislation and regulation” and that loot boxes should be classified as “games of chance”, which means they would fall under the Gambling Act of 2005 and be regulated by the Gambling Commission.
“There is academic research which proves that there is a connection, though not necessarily a causal link, between loot box spending and problem gambling,”
The House of Lords Report discussing Loot Boxes in Video Games
“We echo the conclusions of the Children’s Commissioner’s report, that if a product looks like gambling and feels like gambling, it should be regulated as gambling.“
In response to the report, Ukie (The Association for UK Interactive Entertainment) the industry body that represents game companies in the UK, said it has been “working hard to address the concerns raised in the Lords Select Committee report”. The statement highlighted the ‘Get Smart About P.L.A.Y. Campaign’, which aims to increase the use of family controls to limit spending, along with a commitment by major platforms to publicly disclose loot box probabilities, and the new ‘paid random item’ descriptor in the PEGI age rating system.
The reaction to the report from the Entertainment Software Association in North America was somewhat more confrontational, however, as they stated that they ‘strongly disagry’ with UK Parliamentary inquiry’s finding on loot boxes.
“We take seriously the issues raised in the UK Parliament’s Digital, Culture, Media and Sport Committee report, but strongly disagree with its findings,”
“As demonstrated by the recent announcement of policies regarding the disclosure of the relative rarity or probability of obtaining virtual items in paid loot boxes as well as the robust parental controls that empower parents to control in-game purchases, the video game industry is a leader in partnering with parents and players to create enjoyable video game experiences. In addition, numerous regulatory bodies around the world, including those in Australia, France, Ireland, Germany, and the UK, have come to a conclusion starkly different than that of this committee.”
A Representative of the Entertainment Software Association
The ESA represents major publishers, such as Activision Blizzard, Bethesda, Electronic Arts, Take-Two, and Tencent, and thus has a vested interest in avoiding regulation. It is therefore always going to disagree with findings that could lead to legislation that limits monetization practices.
However, we are at a stage where it is not only numerous governments around the world that are declaring loot boxes to be gambling, but even video game industry heavyweights such as Epic’s Tim Sweeney who are speaking out against their predatory nature towards exploiting children.
Gambling should not be a part of video games, especially those marketed towards children, but if gambling does remain part of video games, then at the very least the video game industry must be held accountable and face the exact same regulation that every other industry faces for including gambling mechanics within their products.
