Let’s Play – Turn the Gam(bl)ing on
While playing computer or video games, it is not obvious and definitely not the first concern of a gamer or gamer’s parents, that the lines between gaming and gambling are nowadays blurred. This was the reason for fifteen states including the Czech Republic to sign a declaration regarding risks of computer games, among others the risks arising from use of loot boxes.
The loot box is a virtual box containing goods that can help gamers in different ways. It can be of cosmetic nature only, making the game experience more enjoyable, or it can contain items that give the gamer an advantage over other gamers. The main issue is that the gamer is paying with real money for randomly generated content. Through algorithms the gamer is motivated to buy more loot boxes and therefore spending more money for another chance to get a desired item. This has proven to be highly addictive in some cases and thus very similar to gambling while gambling is highly regulated by law. Such inconsistency might result in problems both in legislation and in the social sphere.
Czech law defines gambling as any game, bet or lottery in which the return is not guaranteed and the win or loss is fully or partially dependent on coincidence or unknown circumstances. Acquisition of a loot box might be considered gambling as the actual content of the loot box cannot be predicted and might even have zero value. However, the whole legal situation remains opaque. Further discussions are necessary. That is why the Ministry of Finance of the Czech Republic announced its international cooperation in this area in September 2018. The cooperation originates from the conference of Gaming Regulators European Forum.
The result of this conference is the above mentioned declaration which aims to secure steady cooperation between the signatories in the field of gambling prevention, awareness and safety using enforcement instruments in compliance with nation legal framework. Further, the mission of this declaration is to raise consumer awareness and secure sufficient protection of consumer rights. The intention is also to ensure safety of children as they are frequently targets of computer games. In addition, discussion between the regulators and responsible game developers shall be initiated.
It is worth noticing that in some countries loot boxes have not been found illegal as they were in general considered to be some kind of reward or because the reward is used only in the game itself. Contrary to that, the Belgium Gaming Commission has already declared loot boxes illegal. Thus, those loot boxes must be removed from all games in Belgium. Failure to comply with this decision may result in a fine amounting to hundreds of thousands of euros or even criminal law punishments. Those sanctions might be tightened if minors are involved. One example of a company which might face enforcement actions by Belgian authorities is Electronic Arts (EA).
The declaration is open to signatures of other countries in order to make a significant international impact. It will be interesting to observe the progress of discussions and negotiations between game developers and regulators. For now, you can keep on gaming without any concerns and we will keep you informed. However, if you are involved in the gaming industry you should consider evaluating this potential risk.