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UK House of Lords calls for loot boxes to be considered gambling

Loot boxes are one of the most controversial aspects of modern videogames. Brought to the spotlight after their implementation in Electronic Arts' Star Wars: Battlefront II, loot boxes quickly become the target of criticism, with Belgium uling them to be a form of gambling back in 2017. For those unaware, loot boxes are a system which sells in-game items in mystery boxes, the contents of which aren't revealed until the player spends real money to unlock them (as seen above), essentially making them a game of chance. In 2018, the Netherlands considered that loot boxes are only classified as gambling if their contents are transferrable, and thus have some sort of market value.

In a report published today, the UK House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry recommends that the UK government begin considering loot boxes a game of chance as part of the Gambling Act 2005 (via BBC). The government has stated that it will make loot boxes a focus for its upcoming review of the Act, but the Committee believes that Ministers shouldn't wait for the review, and should make the necessary regulations and bring loot boxes into the realm of gambling immediately.

The report includes comments from researcher Dr. David Zendle, who makes the point that there's a clear link between loot box spending and problem gambling in adults and teenagers. Though the research doesn't necessarily indicate that loot boxes are a gateway into gambling, it does show that people who partake in one are very likely to do the other - specifically, those who spend money on loot boxes are 10 times more likely to be problem gamblers compared to those that don't. Dr. Zendle explains two possibilities as to how loot boxes and problem gambling are related:

"It may be the case that these things are linked because spending on loot boxes causes problem gambling. This is a credible explanation because loot boxes are very similar in many ways to gambling, and therefore may provide a gateway to it. However, it may alternatively be the case that this relationship exists because people who already have gambling problems are drawn to spend significantly more on loot boxes. This also makes sense. Problem gambling is characterised by uncontrolled excessive spending on gambling. Loot boxes share many similarities with gambling. It therefore makes sense that this uncontrolled spending may transfer to loot boxes too."

Additionally, the report finds that young people are most at risk of becoming problem gamblers, and that online gambling games should be reviewed to assess whether they cater to children. The report specifically mentions e-sports as a potential area for the development of gambling habits, especially for younger audiences.

While regulation is still being considered in different countries, rating agencies including the Entertainment Software Rating Board (ESRB) in the United States and the Pan European Game Information (PEGI) have both begun adding warning labels to game boxes when the games include paid random items. This should help parents understand the risks of buying these games, and avoid situations where children may inadvertently spend large sums of money without their knowledge.

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