Recently, the Belgian Gaming Commission has determined the loot boxes as a form of gambling. However, in many Asian countries, the game has long been equated to a gambling entertainment, which is banned there.

Article summary

  1. What are loot boxes
  2. Loot boxes vs Gambling
  3. Roulette-sites
  4. Target Audience
  5. Public Opinion
  6. Prospects for further development of loot boxes
  7. Regulation at the legislative level
  8. Conclusion: Are loot boxes gambling or not?

Experts from Slotegrator have kicked off what are the loot boxes, where are they used, whether it is a kind of gambling or simply a successful game monetization model, and how do the legislators of different countries consider this issue.

What are loot boxes

Loot boxes are used in games, and recently this concept has become widespread among gamers.

Classic game of loot boxes is presented in the form of a box: It is a stylized branded box, which contains a set of themed subjects. These are usually: Trinkets, t-shirts, stickers, posters, costume jewelry, promo codes, new games, game-devices, etc., depicting logos or images of characters from popular video games.

Loot boxes vs Gambling

The idea is that the player does not know what is inside until he gets the treasured box. The organizers put the items there on their own. Only a theme or a possible (but far not obligatory) list of what can be inside is known.

However, some of the items listed are of real value. But the chance that some of them will land in your box is not so great. This is the element of uncertainty and randomness, which is common in gambling.

Loot boxes are sold for real money, the price is fixed and affordable to most users. You must pay in advance and to refuse after receiving and to recover the money is impossible. This is indicated in the agreement signed by the buyer. This is the second point inherent in gambling. After all, the player is not refunded with the lost bet if he changed his mind after.

Roulette-sites

It is believed that the loot boxes exploit the same roulette-sites as gambling. That's not true at all. But the reason for this opinion is the following.

The presence of loot boxes in games gave the impetus to the emergence and development of so-called "roulette-sites" drawing various skins, which are used by players in video games to upgrade the hero, customize the weapon appearance, etc.

There are two types of roulette-sites:

  1. Those completely coping the mechanics of online casinos. On such sites, a user bets the skins or real money against other players, and then there is luck only: He wins or loses. In case of loss, the player remains with nothing.
  2. Those working due to the loot boxes system. In this case, the player receives a certain item from the box. Here the mechanics of the site-roulette is less similar to the casino.

Target Audience

Mostly, the loot boxes are top-demanded by minor fans of video games. After all, many teenagers literally live their lives there. And for them to wear, for example, a branded T-shirt with the logos of popular video games - this is the best way to express yourself and attract attention.

Therefore, youngsters are happy to take risks, giving money away for the opportunity to have something exclusive to show off with. Also, they are fascinated by the uncertainty. After all, the buyer does not know what is inside the cherished box. This adds excitement and thrill.

Hence the answer to the question: Where did the loot boxes come from? Children usually do not have the opportunity to buy expensive games. But still they have a great desire to play. This was the time that led to the massive development of piracy. Then developers invented special affordable content to play on small money.

As a result, loot boxes have proved themselves to be an effective marketing tool for promoting video games. Of course, this is a successful model of game monetization. Often marketers establish their robust conclusions concerning lots of hype around loot boxes in games.

Public Opinion

In various countries, an increasing number of action public groups require their governments to equate the loot boxes in video games with gambling and to provide minors with limited access to them. They collect tens and hundreds of thousands of signatures, arguing that it may harm children's mental health. Many people wonder: loot boxes are gambling or something worse?

Here are the arguments of the activists:

Often loot boxes that are bought for real money include items of much lower market value than they were purchased for. This has been happening everywhere. Organizers simply put demo-items or long unsold promo-souvenirs in the box.  Thus, the loot boxes is a hoax when a buyer sells illiquid goods at a notoriously inflated price.

The second argument is more serious. The initiators point out the negative impact of loot boxes on the nascent psyche of children and teenagers, as the very idea of these boxes has a gambling component. A fanatical fascination with them can provoke the development of gambling addiction.

And finally, the legislative argument. Loot boxes are sold outside of game platforms and have monetary value. They may contain items (codes) used by the players on the game platform, giving them some advantages. Therefore, they should be regulated by law.

Prospects for further development of loot boxes

At the moment, it is not possible to say that loot boxes constitute a serious problem.

The important influence on their development, on the one hand, is rendered by public opinion. On the Internet, thousands of players frustrated with the set of items received, actively spread negative comments, accusing the organizers of cheating. 

On the other front – legislation. In many countries, the existing laws on gambling have been amended accordingly. And if loot boxes are recognized as gambling they automatically fall under age limits. Given the main target audience consisting of minor players, the future of loot boxes does not look promising.

Regulation at the legislative level

In Europe, as yet, almost all countries outlaw the loot boxes.

Recently, the UK Parliament, as well as the UK Interactive Entertainment (UKIE) together with such rating organizations as ESBR and PEGI refused to consider loot boxes as a kind of gambling.

But Belgium thinks different: In mid-November this year, loot boxes were recognized as gambling in the country. And the European Commission is now planning to do the same in the entire European Union. In case of acceptance of the corresponding amendments the organizers obliged to receive the license, while age restrictions on games with loot boxes equated to 18 +.

The U.S. plan to ban the sale of loot boxes to users who are under 21. Legislative amendments are currently being prepared.

In Australia, the Victoria state’s government has also recently equated the loot boxes to gambling.

In some Asian countries, the loot boxes are already regulated by gambling laws. For example, in China, the organizers are obliged to publish a chance to drop an item if the game includes loot boxes.

Conclusion: Are loot boxes gambling or not?

So far it is difficult to answer this question clearly. Representatives and legislators of the gambling industry respond on the problem in different ways.

Some claim that by paying money for the loot boxes, the player is guaranteed to receive some prize. The box is never empty. Therefore, the loot boxes are not possible to be compared with a casino.

Others indicate that the loot boxes may contain items of game value. And if earlier you had to pay extra to get them, for example, more effective weapons, now players pay for the chance to get it. And the chance is already a matter of risk, and it is already a gambling component.

The Slotegrator's opinion is that in any case, the loot boxes unlikely to find a direct application in online casino industry in the near future.