Game developers have been given eight weeks to fix illegal in-game loot boxes.
The Dutch Gambling Authority investigated ten popular games with loot boxes and discovered that four of them had violated Dutch gambling laws. The investigation found that the games in question award loot box prizes to gamers, who can then sell them for real money via third-party sites, reports Dutch news outlet NOS.
What are loot boxes?
In video games, a loot box – also known as a loot crate or prize crate – is a virtual item that players can redeem to further their gaming ability, such as clothes or weapons.
Players who purchase these loot boxes receive a random box and only find out what’s inside after they buy it. Players can also receive rare objects when they purchase a number of loot boxes. Games that feature loot boxes include Overwatch, League of Legends, and Star Wars Battlefront II, to name a few.
Game violated rules
The Dutch Gambling Authority didn’t name the games in question; however, it pointed out that because the four games enabled loot boxes to be sold via third-parties, they have an economic value. As NOS highlights, this means that games such as FIFA 18, Dota 2, and Rocket League could find themselves in the firing line.
Marja Appelman, director of the Dutch Gambling Authority, said: “They are designed as gambling games are designed, with the feeling that you have almost won. There are all sorts of sound effects and visual effects when you open such a loot box, so you have a tendency to play through and through.”
The developers of the four games have eight weeks to fix their in-game loot boxes. If they fail to do so, the gaming authority can impose fines or prohibit the sale of the game, NOS reports.
Notably, even though the remaining six games were not in violation of Dutch gambling laws, the Dutch Gambling Authority still criticised them, arguing that the loot boxes are similar to gambling with a fruit machine or roulette. It also noted that they pose a risk to young children and could lead to gambling addiction.
In an appeal to gaming companies, Appelman said: ‘I call on all game companies not to make loot boxes accessible to children anymore and to remove addictive elements.’
Gambling for skins
New research from Juniper Research suggests that by 2022 loot boxes and skins gambling – two emerging gaming growth sectors – will generate a $50bn (£35bn) industry. This figure is up from $30bn (£21bn) last year. Skins are in-game cosmetics which enable the appearance of weapons and characters to be changed.
According to the report, skins gambling should be of great concern to regulators as skins can often be traded in for real money via online trading platforms.
Juniper Research author Lauren Foye said: “Skins are acquired both through playing video games and from opening purchased loot boxes. These items have value depending on rarity and popularity within game communities. On PCs, skins are traded for real money via Steam’s ‘Marketplace’; the platform has 125 million registered users globally.”
There is also a call for the regulation of skin trading and skin gambling due to the risks they pose to young people. A 2017 study by the Gambling Commission found that 11% of 11–16-year-olds in the UK had placed bets with skins. This means that 500,000 children under the age of 15 could be using skins for gambling.
Juniper is of the opinion that if countermeasures aren’t put into place, wagers will surpass $1bn (£0.70m) globally by 2022.