The House of Lords gambling committee states that video game loot boxes should be governed by gambling laws.
Lords say the loot should be classified as “gambling”, which would bring it under the Gambling Act 2005.
“If a product looks like a gamble and feels like a gamble, it should be regulated as a gamble,” says their report.
And they warn that such a change should not wait.
“The government must act immediately to relocate the spoils under gambling legislation and regulations,” said a statement accompanying the report.
Loot has long been controversial in video games. They offer players the chance to get a random reward when they are opened. To complicate matters further, boxes can often be purchased for real money and prizes can sometimes be exchanged.
The Lords report is wide ranging and covers the entire gambling sector, but focuses in part on new forms of gambling and those aimed at children.
“There is academic research showing that there is a connection, although not necessarily a causal link, between spending the spoils and problem gambling,” he says.
An expert, Dr. David Zendle, explained to the committee that spending on loot causes gambling problems, due to their similarity, or that people who have gambling problems spend a lot of loot. But he warned that in both cases, the connection was “extraordinarily solid”.
The Lord’s report concludes that ministers should adopt new regulations that explicitly state that loot is gambling. It also says that the same definition should apply to any other real money paid game items, such as FIFA player packs.
The government told the committee that its planned future revision of the gambling law would focus on loot. But the Lord’s report warns: “This problem requires more urgent attention.”
The Lords join a number of parents and groups of children, as well as a previous report from the digital committee on addiction technologies, in asking ministers to regulate loot as a form of gambling.
Some actions have already been taken: in Belgium, spoils were banned in 2018 due to similar fears. Earlier this year, the Pegi game classification agency said clearer warning labels would be added.
And in the video game industry, some companies have taken the initiative and have chosen to change the way their systems work.
As part of its broader industry review, the Lords report also notes that young people are “at greater risk” of becoming problem gamblers.
He says 55,000 problem players are between the ages of 11 and 16. Accordingly, it is said, all new online gambling games should be reviewed to see if they appeal to children – and their potential for harm should be weighed.
The report also highlights the problems with eSports betting as another potential gateway for young people.
The researchers said to the committee: “eSports represent the biggest growth opportunity for sports gambling and present a particular concern, as its players and spectators are young.”