Rework Laws To Reduce Loot Box Harms, Say Researchers

April 25, 2022
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The drive to prevent harm caused by loot boxes would benefit from clearer legislation and enforcement, according to new research published in the Journal of Behavioral Addictions, which also suggests safer gambling tools can protect consumers.

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The drive to prevent harm caused by loot boxes would benefit from clearer legislation and enforcement, according to new research published in the Journal of Behavioral Addictions, which also suggests safer gambling tools can protect consumers.

The “proposals for understanding and addressing issues at a national level” article is based on previous academic work that concluded virtual items are valued by consumers in the same way as real-world items, yet many legislative approaches consider them to have no real-world value.

In this paper, researchers concluded there is also a need for secondary prevention, centred around the early detection of addiction, namely through increasing awareness of loot boxes.

The conclusions are also based on the output of an informal working group set up to better understand loot boxes and reduce harm, in particular looking at how they have an impact in Finland, with the paper funded by the Academy of Finland project Centre of Excellence in Game Culture Studies.

“This approach would also benefit from being supported by a campaign designed to educate different sectors of society,” it says.

The researchers said there is also a potential for responsible gambling practices to be adopted by game developers and legislators to help minimise the harm from overspending in gaming activities.

Research into loot boxes, including looking into player data as well as longitudinal and qualitative studies, would also benefit legislators, according to the paper.

The proposals are not a definitive list of ways to reduce loot box harm, but are instead intended to stimulate debate, said the academics.

Leon Y. Xiao, PhD fellow at the Center for Digital Play, IT University of Copenhagen and teaching associate in the School of Law at Queen Mary University of London, told VIXIO GamblingCompliance the paper provides a “good overview”.

“In my opinion (following the published interpretations of various European gambling regulators), loot boxes that are purchased with real-world money and contain rewards that can be transferred to other players in exchange for real-world money contravene the gambling laws of many countries,” Xiao said.

However, a lack of enforcement action against games means “regulators are saying one thing, but doing another. This inaction is unsatisfactory and should be more publicly critiqued”, Xiao said.

There have been numerous other proposals for reducing harm caused by loot boxes.

Some of these have been adopted, such as probability disclosures in China; however, we do not know whether any of these are actually helpful to players and effective at reducing spending/harm, highlighting a need for more research, according to Xiao.

“I think it is important to resist the urge to think that there is some sort of ideal ‘worldwide,’ ‘international’ solution to loot box regulation. We know that the loot box situation varies greatly in different countries,” Xiao said.

Lawmakers across Europe have increasingly targeted loot boxes when creating new gambling legislation.

For instance, the Austrian Ministry of Finance is working on a draft of a delayed set of proposed changes to its gambling law, which is reported to include restrictions on loot boxes.

While in the UK, a joint letter sent by the All-Party Parliamentary Group for Gambling-Related Harm and Peers for Gambling Reform on November 17 called on the Prime Minister to adopt a raft of changes, including introducing specific loot box regulation.

However, on March 9, 2022, the Dutch Council of State, which is the highest administrative court in the Netherlands, overturned a Netherlands Gambling Authority (KSA) ruling that EA’s loot boxes in its FIFA games constituted unlicensed gambling. The ruling of the Council of State is final and cannot be appealed.

EA could have faced a penalty of up to €5m as the KSA claimed the loot boxes were akin to unlicensed gambling as they were deemed to have “economic value”.

A paper published by a European Union think tank in 2020 said the most effective way to address a lack of loot box regulation among its member states would be to shift the debate away from gambling and towards player protection, as it would “provide the EU with an array of tools to address problematic practices and minimise”.

Separately, there has also been some research into assessing the correlation between loot box use and gambling behaviour.

A 2020 Australian university study has found that young-adult use of loot boxes is correlated with more frequent and aberrant gambling behaviour, but it found no evidence that earlier loot box use predicts problem gambling.

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