March 29, 2023

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Has the House of Lords Just Ended Loot Boxes

House of Lords released a report stating that Loot Boxes should be classified as "Games of Chance" and brought under the regulations of the Gambling Act 2005.

by Badger Nimahson

Earlier today the House of Lords released a report stating that Loot Boxes should be classified as “Games of Chance” and brought under the regulations of the Gambling Act 2005.

This is a massive decision that will hopefully have a massive and far-reaching impact on the predatory practices of the games industry. If you have been a reader of this site for a while then you will be well aware of my stance on not just loot boxes but microtransactions and gambling mechanics in gaming.

Whilst I am a lifelong gamer and revel in the ingenuity and evolution of the games industry I also worry for the children and vulnerable that are getting into gaming today.

I wrote back in Feb 2019 about the need for Government regulation in mobile gaming about the predatory practices of mobile games developers. Whilst that article looked more at the gambling addictions of vulnerable people and compared the issues to those that are legally policed in the betting industry the point about gambling encroaching into gaming still stands.

Reports in the media suggest that the House of Lords has taken the same approach to the ever-increasing use of gambling mechanics as I did when 2K Games released NBA 2K20 last August. The use of loot boxes and pretending they are not gambling is immoral in my opinion but inserting Gambling mechanics into a game with a 3+ rating is abhorrent!

In the article I linked above I discuss how 2K games have followed the letter of the law and legally didn’t introduce gambling but it seems that defence is no longer relevant after the House of Lords stated in its report that “If a product looks like gambling and feels like gambling, it should be regulated as gambling,”

This is a powerful statement that will hopefully remove the ambiguity that developers are allowed to manipulate in order to introduce gambling to children.

The predatory measures that this development trend has created can only be described as grooming. It is teaching children how to gamble and normalises addictive and destructive behaviours.

Lord Grade, Chairman of the committee responsible for the report said the Gambling Act was “way behind what was actually happening in the market” but he added that the “overwhelming majority” of the report’s recommendations “could be enacted today” as they don’t require legislation”.

I find it extremely refreshing that not only are the government looking to protect children and taking this issue seriously but that the House of Lords has publicly stated that waiting for the government review is too slow to react and measures must be taken immediately.

Dr David Zendle, explained to the committee that loot box spending and problem gambling are extremely similar and that there is a correlation between people who have gambling problems and loot box spending.

The full report by the House of Lords committee covers the whole gambling industry although it is reported some parts of the report focus on new forms of gambling and gambling that is targeted towards children.

This explanation doesn’t only cover loot boxes but is also recommending that the government look at eSport betting as “eSports represents the largest growth opportunity for sports gambling and presents a particular worry, as its players and spectators are young.”

This is backed up by the extremely unsettling statistic that there are 55,000 problem gamblers in the UK between the ages of 11-16. Let me just say that a bit louder for the people at the back…

FIFTY-FIVE THOUSAND CHILDREN BETWEEN THE AGES OF ELEVEN AND SIXTEEN HAVE A GAMBLING PROBLEM! That is disgusting and as a society, we should be ashamed with ourselves. How can we allow this to happen and how can we defend these practices?

Now please don’t get me wrong. I am not against gambling and regularly have a little flutter on the football but not everybody has the self-control to regulate themselves so we have legislation in place to protect these adults. Bookmakers in the UK are required to monitor spending habits and remove service if they recognise problem spending.

There is no such safeguards put in place for the same vulnerable people when it comes to gaming and there is nothing at all to stop game developers for aiming gambling at children and grooming them for future income.

What makes this report even more welcome is that the statement accompanying the report says “The government must act immediately to bring loot boxes within the remit of gambling legislation and regulation,”

Hopefully, the government will act quickly and the dark stain that is loot boxes and predatory practices will be consigned to history. Although I don’t expect companies like EA who use the FIFA franchise to print money will go down without a fight.