Loot box loophole

by Noah Taylor Last Updated
Loot box loophole

Loot boxes have quickly gained a negative focus from gamers, being perceived as “pay to win rewards”.

Calvin Ayre reports this has become a growing concern for Australian lawmakers, as they could be perceived as a form of gambling targeted at minors.

Australia has taken a proactive step to limit access to these loot boxes by setting age restrictions.

The new regulations require that any person purchasing video game loot boxes will have to show ID.

According to the Office of the eSafety Commissioner, access to these boxes and other simulated gambling elements in computer and video games will be restricted to “adults aged 18 years and over, including through the use of mandatory age verification.”

Australia isn’t the first country to try and legislate against the practice.

United States senator Josh Hawley has introduced a bill that would ban the sale of loot boxes to minors, despite taking criticism from gaming industry leaders.

ESA chief executive officer Stanley Pierre-Louis, attacked the United States bill.

“This legislation is flawed and riddled with inaccuracies,” he said.

“It does not reflect how video games work nor how our industry strives to deliver innovative and compelling entertainment experiences to our audiences.

“The impact of this bill would be far-reaching and ultimately prove harmful to the player experience, not to mention the more than 220,000 AMericans employed by the video game industry.

But keeping the loot boxes in check has become a fairly popular policy position.

Former United States presidential candidate Andrew Yang also called for new regulations during his run for presidency.

He explained that there is a very direct resemblance between gambling and loot boxes.

“These mechanisms can seem similar to gambling because of the random outcome, keeping players (usually kids) engaged on the platform for longer or costing them hundreds or thousands of dollars in addition to the base cost of the game.

“Some games have a ‘free-to-play’ model, where the game itself is free but they’re funded by the purchase of these loot boxes.”

The United Kingdom is also arguing that loot boxes can become a gateway to gambling.

The Royal Society for Public Health recently published a report that indicated that loot boxes are “polluting youth and that regulation should be implemented”.

According to RSPH chief executive Shirley Crame, even young people are seeing a need for regulation.

“However, we, and the young people we’ve spoken to, are concerned at how firmly embedded gambling-type features are in many of these games.

“The rise of loot boxes and skin betting has seen young people introduced to the same mechanisms that underpin gambling, through an industry that operates unchecked and unregulated on the back alleys of the internet, which young people can access from their bedrooms.”

Belgium and the Netherlands have also added regulations banning the sale of these loot boxes to persons under 18, forcing game developers to remove them from their games in these markets.

Denmark cracks down on skin betting

Denmark is cracking down on skin betting – which is gambling with virtual goods – with illegal sites getting shut down out of concern for teenagers and children.

Casino.org  reported in April that a Copenhagen court approved the government’s request for telecom companies to block 25 unlicensed online sites.

Ten of these had casino games or sports betting and 15 offered skin betting.

Skins are coverings found in video or Internet games and sometimes start as video games, but suddenly turn into gambling, according to gambling abuse experts.

“Might be the look of amour, a weapon or even a background,” explained Dr James Whelan, a professor and co-director at the University of Memphis’ Institute for Gambling Education and Research.

Dr Whelan added that, “the skins or covers can be simply or flashy. A player wagers something of value in order to have a chance or better chance of winning such a covering. It is basically gambling while gaming.”

“Certain skins become highly sought after by players. Unfortunately many of the ‘best’ items are difficult to obtain, thereby raising their value,” he said.

This is the second time in the last year the Danish regulator went to court to block skin betting sites, with six websites blocked in February 2018.

Skin betting sites have sometimes circumvented regulators and that tends to “complicate our work of documenting and blocking,” the director of the Danish Gambling Authority Birgitte Sand said.

Ms Sand explains that the ongoing blocking of illegal sites protects both licensed operators and players.

Last year, the regulator also closed four Facebook groups that provided illegal gambling.

Officials say that since 2012, there has been a decline in the number of websites that target Denmark with illegal gambling.

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