Government says video game loot boxes will not be regulated

The UK government has decided video game loot boxes will not be regulated under betting laws, despite it finding a link between them and gambling harms.

In a long-awaited call for evidence, it instead told the video game industry to take action to protect young people.

It says it will step in if firms do not act, and also wants loot box purchases to be restricted to adults, unless approved by a parent or guardian.

One academic said he was "dismayed" by the government's approach.

Loot boxes are an in-game feature involving a sealed mystery "box" - sometimes earned through playing a game and sometimes paid for with real money - which can be opened to reveal virtual items, such as weapons or costumes.

They have come under fire in recent years, with consumer groups in 18 European countries backing a report calling them "exploitative" in May.

Gambling Act unchanged

The government was considering whether loot boxes should form part of its yet-to-be released review of the Gambling Act 2005 - but it has decided against this.

Video game publishers have been told they must bring in "sufficient measures" to govern player safety, such as protecting vulnerable adults and fully disclosing the odds of getting certain items from loot boxes.

"While many loot boxes share some similarities with traditional gambling products, we view the ability to legitimately cash out rewards as an important distinction," it said in the report.

"In particular, the prize does not normally have real world monetary value outside of the game, and its primary utility is to enhance the in-game experience.

"The Gambling Commission has shown that it can and will take action where the trading of items obtained from loot boxes does amount to unlicensed gambling, and it will continue to take robust enforcement action where needed."

The government plans to launch a video games research framework later this year, which it hopes will work with academics and people from the industry to improve the available data. It said there were "limitations in the evidence base regarding loot boxes".

'Insulting' Kinder Surprise comparison

However, some say the government has not gone far enough in its response.

James Close, from the University of Plymouth, who has published research on the link between gaming loot boxes and problem gambling, said he was "dismayed" by the report.

"I take issue with some of the citation of the evidence base," he said. "The report released yesterday did show strong links with problem gambling.

"They cited those things, but then they equally said there's no evidence of causation here. They might not be able to support causation, but if people at serious risk of harm are engaging heavily in this form of monetisation, then it doesn't matter whether loot boxes cause problem gambling."

Dr Close also raised questions about whether the government was right to say prizes did not have real-world monetary value outside the games, as some secondary markets online allow players to easily sell the items acquired in-game.

His research, published in 2021, found loot boxes "are structurally and psychologically akin to gambling".

But games publisher EA previously defended them, comparing loot boxes to children's toys Hatchimals or Kinder Surprise.

Adrian Hon, chief executive of game developer Six to Start and author of forthcoming book You've Been Played, called this comparison "obviously ridiculous".

"It would be like there's a Kinder Surprise shop in your bedroom and you can buy as many as you want," he said.

In order for the two to be comparable, he added: "When you open them up there's fireworks going off everywhere.

"And you can get this amazing toy that you can use in the game that you play with your friends. That's not a Kinder Surprise - the comparison is insulting, really."