UK regulator: Loot boxes fall outside of current gambling law

The United Kingdom’s chief regulator of gambling told Parliament that loot boxes — specifically mentioning the FIFA series’ Ultimate Team card packs — are not considered gambling under current U.K. law, even if he has “significant concerns” about the games and their popularity with minor children.

Neil McArthur, the chief executive of the Gambling Commission, said that FIFA packs and loot boxes don’t have a formal way of monetizing their contents. U.K. gambling law is applicable only to prizes that are either money or have monetary value; in-game virtual items don’t, even if they are traded or even resold on black markets outside of the game.

McArthur appeared to suggest that U.K. law would have to adapt to account for a new form of prize being offered.

“There are other examples of things that look and feel like gambling that legislation tells you are not,” McArthur said, meaning “some prize competitions, but because they have free play or free entry they are not gambling, but they are a lot like a lottery.”

Brad Enright, the commission’s program director, said publishers in general, and specifically Electronic Arts, face “a constant battle” against black markets where players resell virtual items and currency for real money. “There is unquestionably a demand for a secondary market,” he said.

The question is whether a game or a publisher does anything to facilitate those sales, directly or indirectly. “Skin betting,” particularly in Counter-Strike: Global Offensive, surfaced as a controversy well in advance of the 2017 launch of Star Wars: Battlefront 2, which is behind the current wave of lawmaker concern. In Counter-Strike’s case, publisher Valve made it easy to connect one’s Steam inventory to third-party websites and services. Players then used their inventories as betting collateral in multiplayer matches, and the winnings could then be sold for real money on Steam.


Anti-loot box bill poses a real threat to sports video games

That drew the attention of regulators in Belgium and the Netherlands, which forced Valve to disable item trading on Steam to players in those countries. Item trading was brought back after Valve pushed through changes in 2018 that blocked players there from opening loot boxes. A Belgian ruling on loot boxes in 2018 also caused Blizzard to pull them from real-money sale in Overwatch and Heroes of the Storm. Earlier this year, EA stopped selling the FIFA series’ real-money currency, FIFA Points, in Belgium, too.

In the U.K., Enright acknowledged that publishers say black market resale of virtual items is against a game’s terms and conditions, but that it’s not enough to satisfy their obligations from setting up these systems. “We’ve been robust and said, ‘We can see you have [terms and conditions], what are you doing to apply them?’” Enright said.

The Department for Culture, Media and Sport’s select committee is investigating “immersive and addictive technologies,” notes the BBC. Last month, EA’s vice president for government affairs told the same committee that the publisher considered loot boxes to be “surprise mechanics” and said EA thought their use in games was “quite ethical,” and enjoyable for players.

Electronic Arts and games makers’ chief lobbyist, the Entertainment Software Association, have routinely challenged the comparison of loot boxes to gambling, particularly when players under 18 are invoked. Following the Battlefront 2 blow-up, the Entertainment Software Ratings Board introduced a new label for games calling out the presence of in-game purchases. PEGI, the ESRB’s European counterpart, later did did the same thing.

In the United States, Sen. Josh Hawley (R-MO) recently introduced a bill to prohibit loot boxes and other forms of microtransactions in games marketed to or played by children, whether or not they are rated for their age groups. Hawley’s bill is supported by Sens. Richard Blumenthal and Ed Markey, both Democrats.

Source: Read Full Article