The UK House Of Lords says lootboxes are gambling, calls for immediate reclassification and regulation on their sale

[Master Disaster]

After months of investigating the upper house of the UK Government have say that Lootboxes are gambling and that they should be regulated under existing UK gaming regulations.

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The House of Lords Gambling Committee says video game loot boxes should be regulated under gambling laws.

 

The Lords say they should be classified as "games of chance" - which would bring them under the Gambling Act 2005.

 

"If a product looks like gambling and feels like gambling, it should be regulated as gambling," their report says.

The report goes on to call for this change to be made without delay.

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And they warn that such a change should not wait.

 

"The government must act immediately to bring loot boxes within the remit of gambling legislation and regulation," said a statement accompanying the report.

Speaking to the BBC Lord Grade said that the concern is that they're teaching children about gambling and admitted that the current classification is behind the industry but he also warned that this require nothing more than a simple reclassification of Lootboxes in law, the laws to protect against this are already in effect in the UK.

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Lord Grade, chairman of the committee, told BBC Breakfast that lots of other countries have already started to regulate loot boxes because "they can see the dangers" which is teaching "kids to gamble".

 

He said the Gambling Act was "way behind what was actually happening in the market" but he added that the "overwhelming majority" of the report's recommendations "could be enacted today" as they don't require legislation.

He fully admits that research into problem gambling amongst children shows a connection with Lootboxes but not necessarily a causal link however he obviously feels this link is enough to warrant the action.

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The Lords report is wide-ranging, covering the entire gambling industry, but focuses in part on new forms of gambling, and those targeted towards children.

 

"There is academic research which proves that there is a connection, though not necessarily a causal link, between loot box spending and problem gambling," it says.

 

One expert, Dr David Zendle, explained to the committee that either loot box spending causes problem gambling, due to their similarity - or that people who have gambling problems spend heavily on loot boxes. But he warned that either way, the connection was "extraordinarily robust".

His report recommends that the Government begin work immediately on reclassifying Lootboxes as "Games of chance" to bring them under the control of strict UK gaming laws.

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The Lords report concludes that ministers should make new regulations which explicitly state that loot boxes are games of chance. It also says the same definition should apply to any other in-game item paid for with real money, such as FIFA player packs.

https://www.bbc.co.uk/news/technology-53253195

 

To quote Lord Grade...

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If a product looks like gambling and feels like gambling, it should be regulated as gambling

I guess this is part of the reason why so many AAA studios have backed away from Lootboxes in recent months. RIP Fifa Ultimate Mode I guess.

[lewdicrous]

Hopefully this doesn't just mean that they'll rebrand them instead of getting rid of them.

Knowing companies like EA, though, I don't that they'll stop that easily.

[wanderingfool2]

Lootboxes are pretty abusive, in the sense of how they exist in games...I am curious though how the law will be written though/applied.  *Thinks about the fact that some game mechanics have lootboxes that are gained through grinding instead of exchange for cash*

 

For those who are in the UK though, were Pokemon cards classified as a  similar thing?  (As they were the similar concept, in that there was always a huge rush to get Pokemon  cards in the heyday).

 

To a lesser extent as well though, do games that allow you to buy items with real money that benefit you in chances of occurrences count?  (It's going to be interesting where they draw the line, because some of the abusive companies could just change the gameplay enough to get around the law while still having pretty much the same addictive concept)

[porina]

2 minutes ago, lewdicrous said:

Hopefully this doesn't just mean that they'll rebrand them instead of getting rid of them.

It'll come down to how the law is written. There will be some definition of what activity is or isn't in scope. What you call it doesn't really matter.

 

I think that's where we'll really have to watch. For example, I'm playing and have played many gatcha games with various degrees of f2p friendliness. Regardless, the common theme is that acquiring game "items" (often time limited) is down to chance. If you pay, you have more chances. Some of these games are outright tuned just for whales. 

 

3 minutes ago, wanderingfool2 said:

For those who are in the UK though, were Pokemon cards classified as a  similar thing?  (As they were the similar concept, in that there was always a huge rush to get Pokemon  cards in the heyday).

I don't recall anything like that. I don't recall where I saw it now, but I do remember an interesting read where someone proposed that if you liken it back to trading cards, the virtual items are no less acceptable. Then we get into the whole physical vs virtual thing...

 

Kinda related I guess, but I find GDC videos interesting to give a viewpoint on what at least part of the industry sees when it comes to creating games. Only yesterday the following was posted:

Never mind the thumbnail they chose to go with, the key content is about how to do microtransactions well. Note this video was originally taken in 2018 so it would have been after the Battlefront controversy the year before that.

[Monkey Dust]

1 minute ago, huilun02 said:

Which is useless because gambling can be legalized. They just want the taxes

 

The end result will be effectively no change for consumers, and government pinches money from game publishers

 

A new cow to milk like Google and Facebook...

I'm not so sure. We have a big gambling problem in the UK, particularly among young men. There is a cost, societal leading to financial, associated with potentially making that problem worse that needs to be weighed up against increased tax revenues. In an extreme case where gambling debt leads to crime, police time, court time and prison provision is far from cheap.

 

The UK government have already reduced their gambling tax take by slashing the maximum stake of fixed odds betting terminals in bookmakers. Admittedly there was a money laundering aspect to those as well, but was done due to the fallout out of problem gamblers. 

[porina]

8 minutes ago, huilun02 said:

Which is useless because gambling can be legalized. They just want the taxes

It's not that simple. Gambling is regulated. There are age limits so already that could take out a large part of the younger market. The people running gambling have a duty of care over the people who participate, and are supposed to spot those who might be getting in too deep, and prevent that. 

 

8 minutes ago, huilun02 said:

government pinches money from game publishers

They do that already. It's called taxes. You buy the game, you pay tax. You buy microtransactions, you pay tax.

[Master Disaster]

1 minute ago, huilun02 said:

Which is useless because gambling can be legalized. They just want the taxes

 

The end result will be effectively no change for consumers, and government pinches money from game publishers

 

A new cow to milk like Google and Facebook...

Gambling here in the UK is VERY tightly restricted and no, it cannot "just become legal". I believe (though I might be wrong on the numbers) that any game with up to £100 stake is considered low tier, these types of games (usually fruit machine type games) are more freely available but still subject to huge restrictions. Anything over £100 is restricted by license, no license, no go. In all cases the law is very clear that you must be at least 18 years old to participate in these activities. Once this goes through any game with Lootbox mechanics will instantly become 18 only (and not just your current advisory system, strictly 18 only like tobacco and alcohol) and anybody selling them will be responsible to making sure the purchaser is over 18, anybody caught selling to under 18s will be fined and might even end up in prison. This will result in most stores pulling these games from shelves.

 

You really think EA will want that for Fifa on basically its home turf?

 

A lot of studios have already backed off Lootboxes, I'll be interested to see how EA handle this for FUT.

[Master Disaster]

1 minute ago, porina said:

They do that already. It's called taxes. You buy the game, you pay tax. You buy microtransactions, you pay tax.

The only people not actually paying taxes are the studios creating the games in the first place, kind of ironic in a twisted sort of way.

[Master Disaster]

Does anybody here know if the Commons are obligated to act on this report or if they can ignore it?

[TimeOmnivore]

Imagine Fifa, NBA 2k20, and other similar sports games having their ratings changed from Pegi 3 to Pegi 18 (and E to M), due to it being illegal for children to gamble. That would be glorious. It won't solve to the core issue of the prevalence of gambling mechanics in games, but it would be a huge blow to EA and similarly greedy publishers, which I'm all for.

[Master Disaster]

1 minute ago, TimeOmnivore said:

Imagine Fifa, NBA 2k20, and other similar sports games having their ratings changed from Pegi 3 to Pegi 18 (and E to M), due to it being illegal for children to gamble. That would be glorious. It won't solve to the core issue of the prevalence of gambling mechanics in games, but it would be a huge blow to EA and similarly greedy publishers, which I'm all for.

As I've alluded to, it would go beyond even that. PEGI are an advisory board, technically the have no power to enforce their guidelines and rely on industry good will. This will make games with Lootboxes on par with Tobacco & Alcohol in terms of sales regulation.

[HarryNyquist]

"We're sorry, you are not permitted to view this article due to the GDPR"

==>
"We're sorry, you are not permitted to purchase lootboxes due to UK law."

[porina]

53 minutes ago, Master Disaster said:

Does anybody here know if the Commons are obligated to act on this report or if they can ignore it?

Not a legal or constitutional expert here, but I don't think so. 

 

41 minutes ago, HarryNyquist said:

"We're sorry, you are not permitted to view this article due to the GDPR"

==>
"We're sorry, you are not permitted to purchase lootboxes due to UK law."

It is early days when it comes to any possible legal change, but do consider the UK is not alone in this. I have not followed in detail, but recall other countries have had similar looks into this area before. Game devs/publishers will want to cover as wide a market as reasonable for them. I think we've already seen shifts away from the worst options likely to preempt future laws that may be bought in.

[TimeOmnivore]

Also, RIP Hearthstone and every other card game with loot boxes (aka card packs) if they get similar regulations as alcohol and tobacco.

[Trik'Stari]

If the EU would follow suit, we could very well see EA collapse overnight. The loss of profits from FIFA games would destroy the core of what they are as a company.

 

For once it would be nice to see government do something useful.

[Drama Lama]

Let’s hope loot boxes don’t get replaced by something worse

 

during the whole lootbox discussion:

why is everyone still pointing at Star Wars Battlefront 2 ( the Game has vastly improved since )

 

but lots of people are buying FIFA every year 

 

 

26 minutes ago, Trik'Stari said:

If the EU would follow suit, we could very well see EA collapse overnight. The loss of profits from FIFA games would destroy the core of what they are as a company.

 

For once it would be nice to see government do something useful.

The man who is responsible for some „ greedy trends „ in EA games is the former boss of EA sports ( I really don’t remember his name )  and guess in which EA game it all started? 

Spoiler

FIFA of course 

 

Edited July 2, 2020 by Drama Lama

[Trik'Stari]

8 minutes ago, Drama Lama said:

Let’s hope loot boxes don’t get replaced by something worse

 

during the whole lootbox discussion:

why is everyone still pointing at Star Wars Battlefront 2 ( the Game has vastly improved since )

 

but lots of people are buying FIFA every year 

 

 

The man who is responsible for some „ greedy trends „ in EA games is the former boss of EA sports ( I really don’t remember his name )  and guess in which EA game it all started? 

  Hide contents

FIFA of course 

 

Jim Sterling did a great video on the history there.

[Drama Lama]

2 minutes ago, Trik'Stari said:

Jim Sterling did a great video on the history there.

There are good loot box like mechanics like in borderlands 

but most are trash

Edited July 2, 2020 by Drama Lama

[Master Disaster]

11 minutes ago, Drama Lama said:

Let’s hope loot boxes don’t get replaced by something worse

 

during the whole lootbox discussion:

why is everyone still pointing at Star Wars Battlefront 2 ( the Game has vastly improved since )

 

but lots of people are buying FIFA every year 

 

 

The man who is responsible for some „ greedy trends „ in EA games is the former boss of EA sports ( I really don’t remember his name )  and guess in which EA game it all started? 

  Reveal hidden contents

FIFA of course 

 

Android Wilson (Its really Andrew). He was literally the guy who invented the loot box, the guy who paired it with Fifa Ultimate Team and the guy responsible for everything EA became.

[Trik'Stari]

2 minutes ago, Drama Lama said:

There are good loot box like mechanics like in borderlands 

but most are trash

If the customer does not, and cannot pay cash for it, or cash for a token to buy it, then I see no problems with them.

 

We all know where this is going though. They will remove the cash aspect, and just make the game highly addictive, and start selling advertising space.

[Drama Lama]

5 minutes ago, Master Disaster said:

Android Wilson (Its really Andrew). He was literally the guy who invented the loot box, the guy who paired it with Fifa Ultimate Team and the guy responsible for everything EA became.

Yes that’s the guy I meant

he probably didn’t invented the 

but he was responsible for enforcing their widespread commercial integration in games

[Master Disaster]

Just now, Drama Lama said:

Yes that’s the guy I meant

he probably didn’t invented the 

but he was responsible for enforcing their widespread commercial integration in games

He was the person who came up with the idea of attaching real world money to loot boxes...

 

 

[Kisai]

6 hours ago, Master Disaster said:

After months of investigating the upper house of the UK Government have say that Lootboxes are gambling and that they should be regulated under existing UK gaming regulations.

 

Well, no duh.

 

Lootbox/gacha mechanics are largely indefensible. I'd rather see them gone completely, but there are some games that are 100% designed around it, and it would make those games into a different microtransaction hell instead without killing them entirely. 

 

I'd rather see such mechanics completely removed. If they are gambling, then they must be subjected to legal age laws and must also pay into anti-gambling funds in every city just like scratch tickets would.

[SolarNova]

In the end it will depend entirely on the exact phrasing of the change in law.

 

Any amount of given vagueness will be immediately seized on by the predatory Game publishers.

 

This outcome was a given. The UK government has a history of approving any law that is in any way put forward as 'for the protection of children'.

 

it will be interesting to see when and how EA will fight the UK government on this, given that we know they are willing to go to court over this. All eyes on EA again

I love to watch them squirm, they really are a giant massive stain on the genre of digital gaming.

 

i cant think of another entity , individual or otherwise, that has been on my shit list for so long ,, EA has been their since 2004!  (closure of Earth & Beyond after acquisition of Westwood for the C&C franchise)

[Kisai]

30 minutes ago, Trik'Stari said:

If the customer does not, and cannot pay cash for it, or cash for a token to buy it, then I see no problems with them.

 

We all know where this is going though. They will remove the cash aspect, and just make the game highly addictive, and start selling advertising space.

 

Nah. That ship has sailed.

 

The next untapped market is permanent sponsorship. This is actually happening in the Japanese gacha space, where there will be an event every week or so that is brought to you by some cross-over with another property. Mostly it's been tame so far as a way to promote one property in another game, but what if it doesn't stop at games? Like imagine playing a JRPG where every brand in the game is a real brand.