Lootboxes: Advice to the Gambling Commission from ABSG
ABSG has given advice to the Gambling Commission in regards to lootboxes. This advice outlines what lootboxes are, concerns around them, and how to protect consumers.
- Executive Summary
- Evidence of harm
- Under-utilisation of existing consumer law
- International approaches
- Annex A: Links to Recent Research with abstract summaries on key conclusions
- Annex B: Extract from ABSG advice (published July 2019)
Annex B: Extract from ABSG advice (published July 2019)
Full version is available here
Lootboxes are in-game features which allow players to stake either real world money or in-game items for a chance of winning something of an unknown value (see Case study 2). Nearly a third of 11 to 16-year-olds have paid money or used in-game items to open lootboxes.37
Many video games make use of lootboxes as a way of increasing revenues for developers. One such game is StarWars Battlefront, which makes extensive use of lootboxes - with characters, ‘skins’, weapons, and other valuable resources all available via this mechanic. Some of these in-game items have different tiers of quality – ‘common’, ‘uncommon’, ‘rare’ and ‘epic’.38 This means that players with money to spend can make faster progress – but this is also subject to a game of chance within the game. The characters available in lootboxes included those that were included in the game’s marketing.
Games such as StarWars Battlefront, and others with similar mechanics, like FIFA Ultimate Team, have recently attracted media attention as a result of a claim made by a Vice President of the games developer EA Sports to a DCMS committee, likening lootboxes to Kinder eggs.39 This parallel, however, does not take account of the different values to players of the items contained within lootboxes.
Research with gaming developers has suggested that the architects of these features may have little awareness of ethics surrounding gambling or the potential for exploitation through these mechanics. Some described being incentivised to ensure they included lootboxes in their design to maximise revenues and that they would develop further to “extract further money from players”.40
Research has found a repeated association between the amount that gamers spent on lootboxes and the severity of their problem gambling status, suggesting that those who buy lootboxes and also gamble on other activities are at increased risk of experiencing gambling-related harms.4142
The similarities between lootboxes and gambling are clear, and some jurisdictions are already taking steps to ban the provision of these games to under-18s. For example, Belgium has already imposed laws which has led to Nintendo removing games from that jurisdiction43. In the USA, a ‘Protecting Children from Abusive Games Act’ is being proposed which would prohibit video game companies from allowing under-18s to access lootboxes and ‘minor-oriented’ games to include pay-to-win features.44
There are additional concerns around lootboxes, as the information offered to players is not regulated and therefore consumers will not always have the necessary information to make informed decisions. In some jurisdictions there is now a mandatory requirement to provide more information. For example, in China, a new rule was introduced requiring lootboxes to display the odds of obtaining different prizes.45
37 Young people and gambling, Gambling Commission, November 2018
38 Star Wars Battlefront 2's Lootbox Controversy Explained (opens in a new tab), Gamespot, November 2017
39 EA games: Lootboxes are not gambling, they are just like a Kinder Egg (opens in a new tab), BBC News, June 2019
40 Lootboxes, a striking new element in the ongoing gamblification of video games (opens in a new tab), Johnson, Alberta Gambling Research Institute, 2018
41 Lootboxes are again linked to problem gambling: Results of a replication study (opens in a new tab), Zendle, Cairns, PLOS One, 2019
42 Adolescents and lootboxes: links with problem gambling and motivations for purchase (opens in a new tab), Zendle, Meyer, Over, June 2019
43 Nintendo removes two mobile games in Belgium (opens in a new tab), BBC News, May 2019
44 Bill to ban the sale of lootboxes to children presses forward with bipartisan support (opens in a new tab), The Verge, May 2019
45 China's new law forces Dota, League of Legends, and other games to reveal odds of scoring good loot (opens in a new tab), The Verge, May 2017
Annex A: Links to Recent Research with abstract summaries on key conclusions
Last updated: 13 August 2021
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