Gambling regulators voice concerns about skins gambling and loot boxes in video games

Voicing concerns about skins gambling and loot boxes in video games, fifteen gambling regulators from across Europe (including the regulators for the UKIsle of Man, Gibraltar and Malta), as well as Washington State Gambling Commission in the USA, have signed an agreement to work together to address the risks created by the blurring of lines between gaming and gambling. That agreement can be downloaded below.

The UK Gambling Commission states on its website that:

Tackling unlicensed third-party websites offering illegal gambling linked to popular video games is a priority and the regulators are calling for the video games industry and technology platforms to play their part in helping crack down on these websites. Games providers must also ensure that features within games, such as loot boxes, do not constitute gambling under national laws. 

Neil McArthur, Chief Executive of the Gambling Commission is quoted as saying:

We have joined forces to call on video games companies to address the clear public concern around the risks gambling and some video games can pose to children. We encourage video games companies to work with their gambling regulators and take action now to address those concerns to make sure that consumers, and particularly children, are protected. We want parents to be aware of the risks and to talk to their children about how to stay safe online. For example, unlicensed websites offering skins betting can pop up at any time and children could be gambling with money intended for computer game products. 

Insofar as the regulatory position in the UK is concerned, this represents the first material development since the Gambling Commission published its position paper on virtual currencies, eSports & social gaming in March 2017. See here for our most recent posting on the subject of loot boxes.

UPDATE: On 28 June 2018, the Australian Senate instituted an inquiry in the following terms into the potential harm caused by loot boxes:

“The extent to which gaming micro-transactions for chance-based items, sometimes referred to as ‘loot boxes’, may be harmful, with particular reference to:

  1. whether the purchase of chance-based items, combined with the ability to monetise these items on third-party platforms, constitutes a form of gambling; and
  2. the adequacy of the current consumer protection and regulatory framework for in-game micro transactions for chance-based items, including international comparisons, age requirements and disclosure of odds.”

It has been reported in Inside Asian Gaming on 18 September 2018 that the above inquiry has found “important links” between loot box spending and problem gambling and that the in-game purchase of loot boxes is psychologically akin to gambling.