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Stephen Baker
Stephen Baker,
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…It’s probably a duck
29 July 2020

Even with the lockdown easing, gyms and leisure centres opening again and the ability to gather in ever larger (but socially distanced) groups it is probably fair to say that there is a large demographic that is still plugged into their video gaming devices of choice. 

Your household may belong to one or more tribe of gamers: from the dedicated mouse and keyboard water-cooled high-end PC gamers to the X-Box, Playstation or Nintendo players. Working from home during the school holidays may have revealed just how much time members of your family are engaged with their friends online and introduced you to a whole new dialect with terms such as buff, de-buff, n00b, potato, clutch, nerf, farming, rage quit, wall hack, and aimbot to name but a few. 

However, there is a term that hides a potentially more insidious side to interactive entertainment where there is crossover between online gaming meaning on the one hand playing video games and on the other gambling. 

The term is “loot box” (whether that is changed slightly to loot crate or loot tick, the idea is the same). A loot box is a virtual in-game container filled with randomised virtual items such as costumes for your avatar, “skins” for your weapons or maybe a new voice line for a character. 

Typically there will be items of different rarity, from common to epic or legendary with the latter items being most rare and with the least chance of being obtained. In some games these may be relatively benign providing only cosmetic enhancements. Other games’ loot boxes might provide game changing advantages with better guns or “power-ups” which players may deem essential to keep pace with the online competition. However, loot boxes come with a catch: while some games may provide loot boxes only through playing the game and advancing levels, many others make loot boxes available to purchase with real money at prices which fluctuate depending on the mere chance of obtaining sought after items. 

Prestigious video game companies have used the mechanic to help defray the cost of games development which can now rival Hollywood blockbusters in production and marketing costs to bring the title to our screens. Some small smart phone games makers have used loot boxes to make arguably unjustifiable amounts of money from the careless, uninformed or addicted with in-app purchases. 

With increasing frequency, we even hear stories of children who run up thousands of pounds on a parent’s mobile phone bill or credit card linked to an e-shop because they thought they were spending “in-game” currency. The issue has been one of growing concern as to whether the link is causative between those people who spend inordinate time or money to get loot boxes and problem gambling or whether there is just a strong correlation. The loot boxes are in effect a lucky dip and you may not even know what your chance of obtaining the hoped for item is.

Belgium banned loot boxes. The Netherlands decided that some loot boxes were gambling and banned ones where the contents had real world value as a result of their ability to be transferred or traded to other gamers. Previously the UK Gambling Commission ruled that loot boxes do not constitute gambling under UK law.

The House of Lords has now spoken on the issue in the recently published “Select Committee on the Social and Economic Impact of the Gambling Industry Gambling Harm—Time for Action Report of Session 2019-21”. Their view on loot boxes echoed the conclusions in a report by the children’s commissioner such that if a product looks like gambling and feels like gambling, it should be regulated as gambling. Loot boxes they say should be regulated as a game of chance. After all if it looks like a duck and quacks like a duck, it’s probably…

For any advice in relation to the above please contact Stephen Baker by email at [email protected]

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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