Loot boxes should be considered gambling, UK parliament says

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The UK’s House of Lords Gambling Committee has said that videogame loot boxes should be classified as gambling, and therefore regulated under the country’s relevant gambling laws. The body has said loot boxes, which feature in different formats across a wide range of games, many of which are played by children, should be categorised as ‘games of chance’ – which means they’ll fall under the UK’s 2005 Gambling Act.

As was first reported on by the BBC, the Lords’ report says: “If a product looks like gambling and feels like gambling, it should be regulated as gambling”. In addition, the committee urges that changes to how the feature is classified and regulated should be made quickly. “The government must act immediately to bring loot boxes within the remit of gambling legislation and regulation,” a statement issued alongside the report says.

“There is academic research which proves that there is a connection, though not necessarily a causal link, between loot box spending and problem gambling,” the report also says. Additionally, it says “the young are most at risk” in terms of developing problem gambling behaviours.

The report concludes the government should both regulate the feature as games of chance, and also apply this definition to other in-game items that cost real-world money.

In addition to the report itself, the committee’s chairman, Lord Grade, has said to the BBC’s Breakfast programme that the current legislation (the Gambling Act), is “way behind what was actually happening in the market”. However, he says the “overwhelming majority” of the recommendations laid out in the Lords’ report “could be enacted today”. This is because they wouldn’t require legislation, the site reports.

He also notes that some other countries around the world have begun to issue regulations on loot boxes as “they can see the dangers” in that they’re teaching “kids to gamble”, according to BBC News.

Loot boxes are essentially a mechanic that allows players to spend real currency on virtual items in games, for example skins and other cosmetics, without seeing what they’re buying in advance. They aren’t currently classed as gambling in the UK, but it’s looking more likely following the Lords’ report – as well as a recent call for evidence on loot boxes by the government’s Department for Digital, Culture, Media, and Sport – that they soon will be.

Some other countries, such as Belgium for example, now class loot boxes as gambling, which has meant some titles available in the country that feature the mechanic have had to be removed from sale or adjusted.

The House of Lords is a section of the UK’s parliament which scrutinises, debates, and can amend bills passed by the House of Commons (the publicly-elected part of the country’s parliament).

The UK’s industry trade body Ukie has now issued a statement, saying: “The UK games industry, through its trade association Ukie, has been working hard to address the concerns raised in the Lords Select Committee report released today.

“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,” the body adds.

“The majority of people in the UK play videogames in one form or another,” says Ukie CEO Dr Jo Twist OBE, “so we take these concerns seriously. We’ve worked hard to increase the use of family controls on consoles which can turn off or limit spending and we will be working closely with the DCMS during its review of the Gambling Act later this year.”