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The UK is “gullible” for relying on self-regulation to tackle loot boxes and their associations with gambling harms, according to an expert on the in-game purchase items, who also warns that banning them is difficult to implement and enforce.
The results of a government call for evidence on loot boxes released last week has reinforced that players who purchase them may be more likely to experience gambling, mental health, financial and problem gaming-related harms.
“The risk may also be higher for children and young people,” according to the government response.
The drive to prevent harm caused by loot boxes would benefit from clearer legislation and enforcement, according to separate research published in the Journal of Behavioural Addictions in April, which also suggests safer gambling tools can protect consumers.
However, culture secretary Nadine Dorries said: “Video games companies and platforms must do more to make sure children cannot make in-game purchases without their parent's knowledge”, as opposed to putting forward specific regulations for the product, which many campaigners have demanded for several years.
Dorries wants game companies and platforms to ensure that controls and age restrictions are applied so that players are protected from the risk of gambling harms.
Leon Y. Xiao, PhD fellow at the Centre for Digital Play, IT University of Copenhagen and visiting scholar in the School of Law at Queen Mary University of London, told VIXIO GamblingCompliance that the government’s approach is “a bit gullible”.
Xiao is confident larger game developers would likely accept self-regulating measures, but is concerned that smaller, international developers will not adapt their products for local markets.
Banning loot boxes is also seen as difficult to implement and enforce, according to the researcher.
Attempts in the Netherlands to ban loot boxes via the gambling regulator were recently defeated in court, but politicians are attempting to change the law.
Elsewhere, countries such as Belgium have also imposed bans.
“I recently went to Belgium to assess whether the ban has worked. Basically, it has not. 82 percent of the 100 highest-grossing iPhone games on the Belgian store still contained some form of loot boxes that the Belgian Gaming Commission would object to,” Xiao.
On the other hand, Xiao believes that Spain’s recent proposal to completely ban the mechanics behind loot boxes, similar to the laws in Belgium, are “going too hard”.
“That many requirements mean that the compliance cost will be very high. This means that either loot boxes are effectively banned, or at least only big companies can afford to implement them legally. This is going to negatively affect smaller companies' competitiveness,” Xiao said.
The UK government proposals, or lack of them, were quickly attacked by groups pushing for gambling reform in the country.
The All Party Parliamentary Group on Gambling Related Harm (APPG) called the proposals “a missed opportunity to take firm action which would protect children”.
“Ministers have acknowledged concerns about a range of harms, including gambling, but have failed to regulate, sign-post addiction services or tackle toxic game design,” the APPG said on social media.
Peers for Gambling Reform called them “inadequate”.
“By abdicating their responsibilities and leaving parents to be solely responsible shows how out of touch the government is with the online activities of young people and the companies who seek to profit from them,” the group said on social media.
In November 2021, a joint letter sent by the APPG and Peers for Gambling Reform called on the Prime Minister to adopt a raft of changes, including introducing specific loot-box regulation.
Xiao also warned that it is very easy to circumvent the national removal of a video game.
For instance, Diablo Immortal was not published in Belgium, but to get the game, consumers just have to change their country settings to the UK while in Belgium and then they can download, play and purchase loot boxes in those "removed" games.
A set of standardised rules on loot boxes in the European Union would help with all the diverging regulations and reduce compliance costs, he said.
However, players who are most at risk of harm would just change their country/region to somewhere outside the EU to circumvent any ban.
“I don't think I can recommend standardisation,” Xiao said, “unless the EU is somehow able to enforce the ban effectively (which does not appear technologically possible at present).”
