Gambling or gaming? The battle over loot boxes

The use of loot boxes in games such as Overwatch have been declared unlawful in Belgium. Photo: Lucy Majstorovic

business editor

Loot boxes in some online games have been declared illegal in Belgium and the Netherlands because they allegedly mix gambling and gaming, but none of Australia’s states and territories have moved towards regulating them.

Loot boxes are virtual lucky dips that players have to spend real or in-game currency on to open, and are found in popular online games such as Overwatch and Star Wars Battlefront II.

They are often compared to gambling because players are pushed to spend money without knowing the value of the prize they’ll get in return.

The hugely popular online game Overwatch has helped popularise the use of loot boxes containing only cosmetic game items. Photo: Facebook

University of Adelaide PhD law student and video game developer Joshua Krook said the main problem was loot boxes did not fit the legal definition of gambling.

“The legal definition [of gambling] involves spending money and the chance of receiving money in return, but in a lot of video games you don’t receive any money,” he said.

“In some ways, it’s even worse than gambling, because in gambling, you occasionally win, but in these types of video games you just spend your money.”

A spokesperson for the Victorian Commission for Gambling and Liquor Regulation (VCGLR) said they are aware of the issue of loot boxes, and were working to address the risks involved.

“The VCGLR has not made the determination that loot boxes are an unauthorised form of gambling under Victorian legislation,” the spokesperson said. 

Joshua Krook.

No state or territory has placed controls on loot boxes, although Australia’s eSafety Commissioner has published a warning for parents about them. Australia has banned many real-money online interactive gambling services under the Interactive Gambling Act, but loot boxes don’t qualify as gambling under that legislation.

Mr Krook said the Australian Classification Board should review the way it classifies games that contain gambling simulations.

“Most gambling games are rated G or PG, which means you can get them in a store without being asked for ID,” he said.

From 2000-2012, 102 video games containing gambling simulations were classified as suitable for youth in Australia, with 69 of those games rated PG and the remaining 33 rated G, a 2012 study found.

The Classification Board uses six elements to rate video games, including themes, violence, sex, language, drug use and nudity.

“Gambling is seen as part of the themes category, which is very vague. I think the classification board should look explicitly at gambling as its own category,” Mr Krook said.

Star Wars Battlefront II faced a major backlash when it was released in November 2017 due to its use of loot boxes, which unlocked new features and characters in the game.

University of Sydney senior lecturer in psychology Dr Sally Gainsbury said loot boxes have caused a lot of controversy among gambling researchers.

“The mechanisms used [by gambling and gaming companies] are quite similar. They use lively colours and graphics and engaging noises, and they reinforce players when they do well,” she said.

Senior Lecturer in Psychology Dr Sally Gainsbury. Photo: supplied

“If a player can’t progress, or they can’t reasonably enjoy the game without making excessive payments, that’s when it starts to be a problematic mechanism.”

Dr Gainsbury said children exposed to gambling simulations could become more susceptible to gambling addiction later in life.

“A small proportion of them do migrate over to gambling, or at least express a greater desire to gamble,” she said.

A 2016 study found adolescents who played virtual poker were more likely to play poker with real money a year later.

However, Dr Gainsbury said games with loot boxes should not be banned outright.

“However, there should be efforts to educate parents and children, to discuss how games are rated in terms of accessibility for young people,” she said.

RMIT Game Design student Alex Minenna said she and many other students were uncomfortable with game elements such as loot boxes moving closer to gambling.

“They’re lining the pockets of big companies, but apart from that they’re not really adding any interest to the game besides the items they hold,” she said.

A survey of over 1000 gamers found 69 per cent supported microtransactions, but only if they were for cosmetic items such as character skins, and not items that advanced the game, Triple J Hack reported earlier this year.

Ms Minenna said in-game monetisation could help small developers earn money, but there were more ethical methods than using loot boxes.

“There’s a big market for free games, and a lot of people don’t want to pay, so people who make free games have to have some way to pay their rent,” she said.

“The randomisation is really where the problem is. It would be better to say to people ‘this is how much this costs. If you want it, you can buy it straight out’.”