Loot Boxes Not Classed As Gambling, UK Gambling Commission Says

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Video game companies could face prosecution for failing to prevent children from using gambling-related gameplay mechanics in games.

During an evidence session with the Committee of the Department for Culture, Media and Sport this week, MPs were told that the UK Gambling Commission had “concerns” about loot boxes and skins in video games. Loot boxes are mystery rewards that must be bought to see what is inside while skins are items that can be worn in-game.

In the session, which was held to examine the link between video games and gambling, the UK Gambling Commission revealed that it doesn’t classify loot boxes and skins as gambling due to current UK laws, the Guardian reports.

According to reports, a prize has to either be money or have monetary value for it to be considered gambling, despite the features involving an element of chance similar to placing a bet.

Speaking at the committee, Neil McCarthur, the Gambling Commission’s Chief Executive, said: “The Gambling Act tells us that gambling means playing a change of chance for a prize, and you can certainly see circumstances where a loot box might fall with that definition, but where things become a bit more complicated are where one looks at the definition of prize, and prize is defined as being money or money’s worth.”

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

UKGC: Video Game Firms Are Not Doing Enough

Gambling Commission’s Programme Director Brad Enright explained that the action the Commission could take against loot boxes and skins were “constrained” by the current legislation. But he later suggested the Commission was ready to begin regulating the products if the current law was changed.

Enright also told MPs that video game firms were not doing enough to prevent players from selling the loot boxes or skins for cash on third-party websites. He suggested that video game firms could take action by shutting down said sites for breach of copyright.

The meeting took place a day before Rockstar Games launched a digital casino in an update for its Grand Theft Auto V video game. The update for the game’s online service allows gamers to gamble in-game with casino chips on games such as blackjack, roulette and three-card poker.

Concerns regarding loot boxes have been increasing for the past several years. According to the BBC, children have reportedly spent hundreds of pounds on loot boxes and skins. In March this year, Labour proposed stricter limits on loot boxes and a study from September 2018 suggested that loot boxes are “psychologically akin to gambling”.

In 2018, Belgium made the decision to ban loot boxes and skins after declaring that they were in violation of the country’s gambling legislation. Soon after, the country launched an investigation into EA over the loot box mechanics in its FIFA 19 video game.