The Victorian Commission for Gambling and Liquor Regulation (VCGLR) has stated that ‘what occurs with loot boxes does constitute gambling by the definition of the Victorian Legislation.’ Jarred Wolfe from the Commission goes on to say that legislation has not moved as quickly as the technology and the Commission is not equipped to determine the legality of this practice.

At the Institute of Games we believe it is important to keep our children safe and protected from early exposure to gambling, regardless of the legality.

So what are these ‘loot boxes’?

Loot box is a consumable virtual item which can be bought with real life money. The loot box can then be redeemed to receive a randomised selection of further virtual items, ranging from simple customization options for a player’s avatar or character, to game-changing equipment such as weapons and armour. Some of these rewards can be useless, others can be worth a lot of money.

A loot box is a form of monetisation and because the outcome of your purchase is randomised, this is seen as gambling. Just like the outcome of a spin on the pokies is randomised.

While loot boxes have been available for years, a glut of games released in 2017, with varying mechanics of concern in their loot box systems, led to critical review of the practice. Most recently Star Wars Battlefront 2’s developer EA experienced a huge backlash from their players and as a result this mechanism was turned off in the game.

Many describe the practice of loot boxes as predatory and deceptive. They are aggressive in game sales that are deceptive and target children and young people. Gamers feel that the progress in the game should not be dependent on the outcome of a random generator and “paying to win” is clearly seen as unfair.

There have been calls for the Entertainment Software Rating Board (ESRB) to classify them as gambling. In October 2017 the ESRB made the following statement: “ESRB does not consider loot boxes to be gambling. While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). “

Because of their use of random chance to gain items after committing real-world funds, games using loot boxes are now considered a form of gambling. Games with loot box systems have become subject to regulation in several Asian countries, while questions of the legality of loot boxes are under considerations in Western ones.

Belgium’s Gaming Commission is investigating the matter and is calling for a ban of the use of loot boxes in Europe. Belgium’s Minister for Justice said that mixing gambling and gaming is dangerous for the mental health of the child.

The Institute of Games is developing resources to raise awareness about gambling in video games. The work is based on evidence and does not demonise gaming. If you’re interested in this, please contact Steven Dupon – steven@instituteofgames.com or visit www.instituteofgames.com