The Digital, Culture, Media and Sport (DCMS) committee from the UK House of Commons has issued a recommendation that the UK Government classify paid lootboxes as a form of gambling.
This recommendation comes following several hearings held with technology and game companies to investigate “immersive and addictive technologies”. According to the DCMS’ report, any games which offer “randomised selections of items” (AKA lootboxes) that players must obtain with real money should be “marked as containing gambling” and be age-rated or regulated accordingly. Only if the lootboxes can only be obtained through “in-game success” (AKA free rewards) should they be considered acceptable and exempt from regulation.
Originally, lootboxes were considered outside the jurisdiction of gambling laws because the items were “won” and “could not be exchanged for real money”. However, the DCMS’ investigation since uncovered that lootbox items can in fact be sold for real money, and that many game developers may be deliberately taking advantage of problem gamblers and children for profit with the use of paid lootboxes.
Committee Chair Damian Collins: “Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the government to explain why loot boxes should be exempt from the Gambling Act.”
Should the UK Government heed the warnings and recommendations of the DCMS, it will likely strike a heavy blow to all companies who employ paid lootboxes as part of their business model. We will be sure to keep an eye out for future developments, and bring the latest details as they come.
If you’re interested in finding out more about what the DCMS had to say about the issue, you can find their full report on lootboxes here.
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