Over the past few years, loot boxes have come under attack as a form of gambling. Countries like Belgium and Netherlands have outlawed the content. Japan had already declared complete gacha games illegal back in 2012. But observers have watched some of the larger markets like the United Kingdom inch toward loot box prohibition as government agencies continue to conduct research on the effects of gambling on children.
The largest market in the European Union is Germany. Much rejoicing went up as news spread that the nation of 83 million might restrict loot boxes to games rated PEGI 18. Those games are only purchasable by adults.
According to lawyer Julia Maris, the law will have an impact on the age restrictions. "Online games or other applications that use loot boxes or similar in-game offers would probably be classified with an age rating of 18 and over," Maris told SPIEGEL.
The reform would also affect games that were previously classified as harmless, such as "Fifa 21" . The soccer simulation is currently approved by the testing center for entertainment software self-regulation without age restriction. But since the “Ultimate Team” collecting mode offers card sets for sale as standard, that could change. In order to get an age rating for children for video games, loot boxes would have to be deactivated by default.
It appears the Bundestag made a mistake with its own announcement of the legal reform. The announcement, which can be viewed on the Bundestag's website, no longer includes the line: "It is also planned to deactivate cost traps such as 'loot boxes' by default."
The amendment does stipulate that age ratings will be expanded to include descriptors for various problematic mechanics, including "cost traps". The idea here is to indicate risk if it was not taken into account in the age classification.
However, there is currently no indication that video games with loot boxes will be rated 18+.
Thankfully I couldn't get to the news right away so I avoided having to print a retraction. I guess a chance still exists that loot boxes could become age restricted, but the published information indicates otherwise.
I really wonder if the people who began the crusade against lootboxes knew the force they were unleashing on our hobby. Today's example comes from the United Kingdom. On 18 January, the National Health Service published an article by NHS mental health director Claire Murdoch calling for the elimination of loot boxes.
“Frankly no company should be setting kids up for addiction by teaching them to gamble on the content of these loot boxes. No firm should sell to children loot box games with this element of chance, so yes those sales should end.
“Young people’s health is at stake, and although the NHS is stepping up with these new, innovative services available to families through our Long Term Plan, we cannot do this alone, so other parts of society must do what they can to limit risks and safeguard children’s wellbeing.”
Look, I get it. Loot boxes are bad. When I played Guild Wars 2 and ArenaNet asked me to purchase keys to unlock the loot boxes that dropped from NPCs, I was pissed. But the NHS isn't just concerned about gambling for kids. The article also quoted Dr Henrietta Bowden-Jones, a psychiatrist and founder of CNWL’s National Problem Gambling Clinic.
“As the Director of the National Centre for Gaming Disorders, the first NHS clinic to treat gaming addiction, I am fully in favour of taking a public health approach and bringing in a regulatory body to oversee the gaming industry products currently causing great concerns to parents and professionals. Loot boxes are only one of several features that will need to be investigated and indeed researched. We need an evidence-based approach to ensure our young people and gamers in general do not continue to be subjected to new and increasingly harmful products without our intervention.”
I think a lot of gamers and talking heads on YouTube see the loot box issue as a central issue. They do not see that gambling is just a part of a bigger issue to those outside the video game ecosystem. In September 2018, the World Health Organization declared "gaming disorder" a disease.
Why is gaming disorder being included in ICD-11? A decision on inclusion of gaming disorder in ICD-11 is based on reviews of available evidence and reflects a consensus of experts from different disciplines and geographical regions that were involved in the process of technical consultations undertaken by WHO in the process of ICD-11 development. The inclusion of gaming disorder in ICD-11 follows the development of treatment programmes for people with health conditions identical to those characteristic of gaming disorder in many parts of the world, and will result in the increased attention of health professionals to the risks of development of this disorder and, accordingly, to relevant prevention and treatment measures.
I'm old enough to remember moral crusaders like Jack Thompson railing against the harmful effects of video games. Back then, politicians introduced legislation in the United States to protect children from the contents of video games. A law was passed in California doing so, but was ruled unconstitutional in 2011. In Brown v Entertainment Merchants Association, the Supreme Court ruled in a 7-2 vote that video games deserve the same constitutional protections as books and movies. As the Washington Postreported at the time:
Writing for the majority, Justice Antonin Scalia said that “like the protected books, plays and movies that preceded them, video games communicate ideas — and even social messages” that are guarded by the First Amendment.
He continued: “No doubt a state possesses legitimate power to protect children from harm, but that does not include a free-floating power to restrict the ideas to which children may be exposed.”
...
Scalia was unmoved. “Justice Alito recounts all these disgusting video games in order to disgust us — but disgust is not a valid basis for restricting expression,” Scalia wrote.
He said that violence has never been found to be outside the First Amendment’s protection. And he noted that children through the years have been fed a hefty portion of it, from fairy tales (“Cinderella’s evil stepsisters have their eyes pecked out by doves”) to high school reading lists (“Lord of the Flies recounts how a schoolboy called Piggy is savagely murdered by other children”).
At a time when video games are more popular than the movie, music, and television industries, I can't help but think people are thinking about cutting the legs out from a competitor. But whatever the reason, the anti-lootbox bandwagon has another passenger.
With the reintroduction of gambling in EVE Online, catching up on the sentiment in the United Kingdom towards gambling in video games is once again relevant to the space game. Back in 2016, the issue was skins gambling. In 2017, the concern shifted to the massive introduction of loot boxes by big game publishers into live service games. As we head into 2020, a look back at some of the activity in the UK over the second half of 2019 is a good idea.
The subject flared up in July when the UK Gambling Commission's program director, made a very unpopular statement at a hearing of the House of Commons Digital, Culture, Media and Sport Committee.
In an evidence session with the digital, media, culture and sport select committee, which is examining links between gaming and gambling, the UK’s betting regulator said it had “significant concerns” about products such as skins and loot boxes. Skins are in-game items that can be won in the game, such as weapons, outfits or particular football players, while loot boxes invite players to pay a certain amount for a mystery reward.
Such products are not defined as gambling under English law, due to the fact that the in-game items cannot be exchanged for cash within the game, despite the fact they can be bought and traded with real money on other sites and acquiring them may involve an element of chance akin to placing a bet.
The Gambling Commission’s programme director, Brad Enright, said it was “constrained by the current legislation”, although it was prepared to regulate such products if the law were changed.
When regulators state they cannot do what politicians want them to do, the response is a push to change the law. In September, the DCMS committee issued a report recommending the regulation of loot boxes under gambling law. The report's summary specifically addressed loot boxes.
Loot box mechanics were found to be integral to major games companies’ revenues, with further evidence that they facilitated profits from problem gamblers. The Report found current gambling legislation that excludes loot boxes because they do not meet the regulatory definition failed to adequately reflect people's real-world experiences of spending in games. Loot boxes that can be bought with real-world money and do not reveal their contents in advance should be considered games of chance played for money’s worth and regulated by the Gambling Act.
Evidence from gamers highlighted the loot box mechanics in Electronic Arts's FIFA series with one gamer disclosing spending of up to £1000 a year.
The Report calls for loot boxes that contain the element of chance not to be sold to children playing games and instead be earned through in-game credits. In the absence of research on potential harms caused by exposing children to gambling, it calls for the precautionary principle to apply. In addition, better labelling should ensure that games containing loot boxes carry parental advisories or descriptors outlining that they feature gambling content.
The Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance. If it determines not to regulate loot boxes under the Act at this time, the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money's worth.
UK Government should advise PEGI to apply the existing 'gambling' content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase.
A presentation that seemed to leave an impact on the committee concerning loot boxes was a presentation from the 2018 4C International Game Developers Conference in Prague from Dr. Ben Lewis-Evans, a user experience researcher at Epic Games. He discussed some of the thinking behind the loot boxes. The presentation is available on YouTube and embedded above.
In October 2019, the Office of the Children's Commissioner for England issued a report, "Gaming the System", that focused on how the way game companies monetize games affects children. On the summary page, the following recommendations were listed.
Bringing financial harm within the scope of the Government’s forthcoming online harms legislation. Developers and platforms should not enable children to progress within a game by spending money and spending should be limited to items which are not linked to performance.
All games which allow players to spend money should include features for players to track their historic spend, and there should be maximum daily spend limits introduced in all games which feature in-game spending and turned on by default for children.
The Government should take immediate action to amend the definition of gaming in section 6 of the Gambling Act 2005 to regulate loot boxes as gambling.
The Government’s age appropriate design code must include provisions on nudge techniques and detrimental use of data, as proposed in the draft code.
Games that are distributed online should be subject to a legally enforceable age-rating system, just as physical games are. There should be a requirement for an additional warning to be displayed for games which facilitate in-game spending. The Government should consult on whether age ratings of all games should be moderated pre-release, just as physical games are.
Online games should be a key focus of digital citizenship lessons in schools, rather than lessons focusing exclusively on social media. Teachers involved in the delivery of these lessons should be familiar with how key online games that are popular with children work.
With a general election scheduled for 12 December 2019, the issue came to the fore as one the top officials must address. Needless to say, all the political parties came down on the side of saving the children from gambling. The Conservative Party of Boris Johnson specifically mentioned loot boxes in its election manifesto.
Also, given how the online world is moving, the Gambling Act is increasingly becoming an analogue law in a digital age. We will review it, with a particular focus on tackling issues around loot boxes and credit card misuse. (p 20) [emphasis in the original]
On 19 December, Queen Elizabeth gave the Queen's Speech to open parliament. In the background briefing notes, loot boxes and gambling were placed in the Online Harms section.
The Government will carry out a review of the Gambling Act, with a particular focus on tackling issues around online loot boxes and credit card misuse (p. 59).
My understanding is that the Open Harms plan has cross-party support. So while Brexit will get all of the attention, those who follow video game news will have to see what happens with legislation concerning loot boxes and other forms of gambling in online video games. If additional studies, such as the one published by the Royal Society for the Protection of Health the day after the Queen's Speech is any indication, the issue will not go away anytime soon.
