UK Parliament’s DCMS Committee Recommends Loot Boxes to be Classified as Gambling by PEGI
Loot boxes may be seemingly on a downturn as more game developers and publishers realize that they'd be better off using other, fairer business models, but that doesn't mean the games industry can afford to forget about the issue altogether.
You might recall that in the United Kingdom, the Gambling Commission expressed concern in the past as the lines between gaming and gambling blurred. In a massive report published today on 'Immersive and addictive technologies', a House of Commons DCMS (Digital, Culture, Media, and Sport) committee addressed the topic once again by recommending PEGI (the Pan European Game Information board, the equivalent of the ESRB in the United States) to properly classify games containing loot boxes that can be purchased with real-world money as gambling.
Loot box mechanics are integral to major games companies’ revenues and evidence that they facilitate profiting from problem gamblers should be of serious concern to the industry. We recommend that working through the PEGI Council and all other relevant channels, the UK Government advises 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.
We agree with the Gambling Commission that games companies should be doing more to prevent in-game items from being traded for real-world money, or being used in unlicensed gambling. These uses are a direct result of how games are designed and monetised, and their prevalence of undermines the argument that loot boxes are not a form of gambling. Moreover, we believe that the existing concept of ‘money’s worth’ in the context of gambling legislation does not adequately reflect people’s real-world experiences of spending in games.
We consider loot boxes that can be bought with real-world money and do not reveal their contents in advance to be games of chance played for money’s worth. 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.
Additionally, an even greater concern was placed by the committee with regards to the effect that loot boxes can have on children. They are recommending that games with these mechanics shouldn't be sold to kids at all.
We recommend that loot boxes that contain the element of chance should not be sold to children playing games, and instead in-game credits should be earned through rewards won through playing the games. In the absence of research which proves that no harm is being done by exposing children to gambling through the purchasing of loot boxes then we believe the precautionary principle should apply and they are not permitted in games played by children until the evidence proves otherwise.
Of course, these are just recommendations. Ultimately, it will be the UK Government's decision to act upon them or not. Either way, we'll let you know if there are any updates on the subject.