David Clifton is quoted in an iGaming Business article entitled “Loot boxes – gambling or not gambling?”
In our view:
- The recent Gambling Commission posting says nothing new as it essentially re-states its position as set out in its March 2017 position paper.
- In-game items that can be traded or exchanged for money or money’s worth outside a video game, in which the winner or winners of the game are determined by chance (or by chance and skill combined), are likely to be regarded as falling within the statutory definition of a prize, with the consequence that a licence from the Commission will be required if the game is offered to British consumers. The Futgalaxy case provides a prime example of this.
- Other countries may have good grounds to take a different view, dependent on their statutory definitions of gambling or gaming.
- Some commentators seem to have misinterpreted the Gambling Commission’s posting as indicating that they will take regulatory action in order to protect children, even if a game does not constitute gambling. They are not saying that. Were they to do so, that would represent an obvious example of “regulatory creep”. They are merely saying that they will share with other regulatory bodies their gambling-related experience and expertise in ensuring that children and young persons are kept safe.
Download article PDF: GC Loot boxes within video games