Blurring Lines: Loot Boxes and Gambling in the Video Game Industry

A loot box is a consumable virtual item which, upon redemption, provides the player with a randomised assortment of further virtual items within a video game. They have been adopted by highly popular multiplayer games as an alternative source of revenue, but have been criticised. The controversy lies in the fact that the precise virtual item that is awarded to the player is solely dependent upon an element of chance, which suggests a strong similarity with traditional gambling services. This paper examines a specific subset of loot boxes, the ‘closed-loop’ mechanic (which effectively excludes the loot box from constituting a form of gambling under the Gambling Act 2005) and explores the impact this has on children and young people. We address the current regulatory framework governing the gambling industry in England and Wales and how loot boxes fit in, before examining why the use of loot boxes might be considered gambling activity. We outline the psychological landscape of loot box consumption and the effects it has on young people, before finally examining whether or not the current approach in England and Wales provides sufficient protection. We conclude that legislative reform in this area must be based on evidence-led policies.