Though they will be familiar to anyone who is a gamer (or has children who are) not everyone is aware of what a loot box is and so I will start with a quick description. When playing an online game you will often be offered the chance to buy loot boxes, which give you the potential to improve your performance. What’s in the box will depend on the game you are playing, for example if you are playing football you might be able to get new, better players in your loot box, and if you are playing a combat game you may get additional powers, weapons and strength to improve your ability to beat your opponent. The thing all loot boxes have in common is that you do not know what is inside the box until you have bought it.

There has been an ongoing debate about whether loot boxes are essentially gambling because they do not necessarily enhance your ability to play the game as their contents can be poor, leading to encouraging players to continue to buy them until you get the item/s you really want. Much like chasing the illusive ‘win’ when gambling. Their contents can cost less than the sum you paid for the loot box and they are designed to look and sound exciting, again drawing parallels with gambling. But are they gambling?

The Government’s recent White Paper addresses the issue of loot boxes pointing to the response to its call for evidence last year. It identifies the increased risks to children ‘such as less developed impulse control, susceptibility to peer pressure, and a generally more limited understanding of purchasing decisions and probabilities’. It also concludes that while there are a number of possible harms associated with loot boxes ‘research has not established whether a causal relationship exists between loot box purchases and problem gambling and there are a range of plausible explanations that could underpin this association.’

The Government concludes that ‘ we do not intend to adjust the legal definitions of gambling at this time in order to capture loot boxes. In our view, it would be premature to pursue legislative options without first pursuing enhanced industry-led protections, given the potential downsides. However, we will not hesitate to consider such options if we consider it necessary in future.’

There have however been recent developments in the EU which suggest a clear association between gambling and loot boxes. Earlier this year a court in Austria decided that loot boxes are gambling in the case of the online FIFA game after a group (including an under 18 year old) spent hundreds of euros on loot boxes while playing their games. The court ruled that the loot boxes were gambling in that they are “licensable games of chance” and  because they can be resold on a secondary market, a potential source of profit, they violate Austria’s gambling laws. The court found in favour of the plaintiffs who can expect a playout as a result, with many more players allegedly seeking compensation as a result.

It is not clear where the Austrian ruling will lead to in terms of how loot boxes are treated in other games in the EU in future. But what is clear is that loot boxes remain controversial in relation to their links to gambling, in particular with young people.

Kate Halliday

Executive Director