The DCMS call loot box exchanges “gambling” as children purchase surprise in-game rewards
The Department for Culture, Media and Sport (DCMS) has published a report to the government insisting that loot boxes are a form of “gambling” and should be regulated as such in child-friendly games such as Fortnite and FIFA.
Loot boxes are randomised in-game prizes paid for with either virtual or real money by players. However, up until now they have evaded falling under gambling legislations as the prizes ‘‘won’’ are not presented to be of monetary value, despite the fact that they can come at a high cost.
The inquiry carried out by the DCMS collected hard evidence that players are purchasing in-game loot boxes at an alarming rate, with one gamer saying that they spend £1,000 yearly on FIFA loot boxes alone. The report also found that loot boxes are a significant contributor to revenue for games companies and attract ‘‘problem gamblers’’ as millions around the UK take advantage of these in-game payments.
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The DCMS explains that purchasing prizes using real money should thus be treated as gambling and the respective gaming consumer information should reflect this. The report sent to the government urges for games companies to regulate this in tandem with the Gambling Act of 2005 and for companies to remove loot boxes from games, unless clearly aimed at adults.
The 2005 Gambling Act was made law to ensure the safe and fair practice of gambling in the UK, and to protect both children and vulnerable people from addictive practices.
The committee came to the conclusion that loot box sales to children should be banned outright, as Chairman Damian Collins wrote: “Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm.”
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The committee has also recommended a ban on loot crate purchases made with real money, suggesting a system using in-game credits only.
Removing the “pay to win” option from games might be popular with players, but games publishers will likely struggle to see the point of an in-game credit-only model. Assuming the government implements the recommendations, this, combined with Nintendo, Sony and Microsoft’s pledge to publish odds of securing rare items, could well spell the death of the loot crate in the UK very soon indeed.