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June 18, 2021

The regulator was called to give evidence to the Digital, Culture, Media and Sport Committee

UK Gambling Commission shares concern over loot boxes in video games

UK Gambling Commission shares concern over loot boxes in video games
"The Gambling Act tells us that gambling means playing a game of chance for a prize, but things become a bit more complicated when one looks at the definition of prize" Mr. McArthur explained.
United Kingdom | 07/23/2019

According to Neil McArthur, chief executive of the Commission, loot boxes "could be a form of gambling but like so much, it depends on the exact circumstances in which they are offered."

T

he UK Gambling Commission (UKGC) was called to give evidence to the Digital, Culture, Media and Sport Committee, where chief executive Neil McArthur said the UKGC shares concern about loot boxes in video games but warned that the current law makes it hard to define them as gambling.

"The Gambling Act tells us that gambling means playing a game of chance for a prize, and you can certainly see circumstances where a loot box might fall within that definition, but where things become a bit more complicated are when one looks at the definition of prize, and prize is defined as being money or money’s worth" Mr. McArthur explained. "What that means is that the prize must mean something that is equivalent to money."

In the UK, concerns have been raised by some experts that video games can be addictive and developers should take more responsibility to protect users – particularly younger people.

As reported by Yahoo Finance, MPs are currently leading an inquiry into addictive technologies, including looking at video games and in particular their use of loot boxes – paid-for packs of in-game items which some fear could be used as a gateway to gambling for children.

Pressed on EA’s use of randomized player packs that can be purchased in its Fifa game, Gambling Commission program director Brad Enright said it was “satisfied” the game maker had taken a number of measures to ensure that they are not being traded for money in so-called skin gambling.

“We’ve engaged with EA and where they’ve explained the mechanic of the game, the player is clearly playing a game, the fact that it’s randomly determined what players you get means that it’s a chance, it does turn on the prize and whether it’s a prize of money or prize worth… in this scenario, our understanding is that EA have taken lots of measures to prevent secondary markets,” he told the committee.

“That said, the very fact that there is expenditure, a chance-based mechanic, children playing the game, we appreciate that that poses significant concerns.”

The pair indicated that the commission had taken action over more than 20 skin betting sites in the last four years.

MP Margot James, who recently resigned as digital minister, told the committee earlier this month that there is not enough evidence available to suggest that loot boxes in video games constitute gambling.

“I would contest the assumption that loot boxes are gambling and I don’t think that all the evidence that I’ve read from your committee’s hearings would support that assumption either,” she said.

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