The UK House of Lords, specifically its Select Committee on the Social and Economic Impact of the Gambling Industry, has called for loot boxes to be classified as gambling and regulated as such.
The report, which is wide ranging, claims that the “liberalisation of gambling by the Gambling Act 2005, the universal adoption of smart phones, and the exploitation of soft-touch regulation by gambling operators has created a perfect storm of addictive 24/7 gambling.”
Videogames were a target, and the reclassification of loot boxes is one of the report’s key recommendations. It also notes that other countries have already started regulating them, like Belgium and the Netherlands. As evidence, it presented other reports and from various groups and experts, though not all of it backs up the select committee’s recommendations.
The UK Gambling Commission, for instance, published a report saying that loot boxes are not gambling, at least under UK law, even if they involve an element of chance and a prize. It concluded that no changes were necessary, but that social gaming should be kept an eye on.
Last year, the Department of Digital, Culture, Media and Sport performed a nine-month parliamentary inquiry into loot boxes, and came to a different conclusion, recommending gambling content warnings be applied to games. In June, the government also launched a call for evidence into loot boxes. The House of Lords, however, believes the issue needs more urgent attention.
“We agree that it is vital that any legislative changes are based on evidence,” reads the report. “The evidence we have heard has stressed the urgency of taking action, and has not drawn attention to any unintended consequences.”
It recommends, then, that ministers shouldn’t wait for the governments review of the Gambling Act, instead making changes to the act now, placing loot boxes under its remit. It also warns that regulating something as gambling after it’s already out in the wild is too late, as it’s already caused harm, so the legislative definition of a ‘game of chance’ needs to be changed to cover “new products which blur the distinction between video gaming and gambling.”
So it also wants to give ministers the power to regulate “any activity which in their view has the characteristics of gambling” under the Gambling Act. Essentially, if it looks like gambling, it is gambling.
Trade association UKIE released a statement on behalf of the UK games industry, saying it’s been working to address the issues raised in the committee’s report.
“In January this year the industry launched its wide reaching Get Smart About P.L.A.Y. campaign, which has sought to increase the use of family controls to help parents and carers manage, limit or turn off spend in games. The major platforms have also committed to require all games featuring loot boxes to publicly disclose probabilities. The PEGI age rating system has also introduced a ‘paid random item’ descriptor to inform consumers of where loot boxes are featured in games.”
You can read the full report, but you’ll want to skip to page 110 if you’re just interested in the loot box bits.