Is rolling the dice in-game with loot boxes the same as gambling in Vegas?

Spending real-world currency for the chance to win virtual in-game items has become quite the flashpoint in the video game industry. At the core of the controversy are loot boxes, which contain virtual random prizes that can be won, granting players key advantages. The catch to all this is that you need to pony up your hard-earned cash for the chance to hit the jackpot.

This “jackpot” is far from traditional and is often comprised of winning virtual armour, weapons, characters or other game-related items.

The loot box business model has been an incredibly polarizing one, with some publishers arguing it helps to stem the tide of rising development costs by further monetizing their content. Many gamers decry the practice as unfair and unethical, as it adds an extra cost to something they have already paid full price for. Players are growing tired of pay walls locking out content and pay-to-win schemes casting an unlevel playing field over their experience. Is it time for regulators to step-in and start governing this practice? If loot boxes can viewed as gambling, which they share an astonishing amount of similarities with, maybe it’s time.

“Casinos, lotteries and other games of chance are carefully controlled and regulated. Loot boxes contain similar traits. Shouldn’t they also be under the same scrutiny?”

Is it actually gambling?

Gambling

If we strip this complex issue down to one hotly debated conclusion—that loot boxes share traits of gambling—the next step is simple: games that contain them should carry an adult rating. This is especially important to protect younger gamers from learning impulsive gambling behaviour. Some gamers might be able to handle the allure of the loot box gamble, but those with a predisposition to addictive behaviour could fall prey. Casinos, lotteries and other games of chance are carefully controlled and regulated. Loot boxes contain similar traits. Shouldn’t they also be under the same scrutiny? Think about it—much of the “game of chance” practices in slot machines are present in loot boxes, with both carrying the same principles. You keep pumping in money to, hopefully, beat the odds and hit a big payout. Only in casinos that “payout” is money, and in games it’s usually skills, character skins or cosmetic items.

Loot box in Overwatch video game

Never tell me the odds

Odds

Another troubling issue surrounding loot boxes is a lack of understanding about the odds of “winning.” In this case, a “win” would be considered a rare item drop, but few publishers have come forward willingly with this data, especially in North America. In parts of Asia and Europe, lawmakers have forced companies to reveal their drop rates, and some results have been staggering giving players a minuscule 1 in 1,000 chance. If hitting the virtual jackpot is so abysmally low, the mechanism is designed to hook people and allow publishers to endlessly profit. This offers little upside to the consumer, other than the temporary thrill of gambling. The very premise of the loot box is the same entertainment you get from wagering: bet, win, lose, repeat.

The very premise of the loot box is the same entertainment you get from wagering: bet, win, lose, repeat.

Children at play

All ages

Loot boxes introduce monetary games of chance, exposing minors to gambling. The Entertainment Software Rating Board (ESRB) is all about rating content so that parents can make informed decisions about what their children play. Many games carrying an “E for Everyone rating” indicating that “content is generally suitable for all ages” are sports titles, and many of them have virtual casinos built into their games. Games like the FIFA and NHL series have this through their FUT and HUT modes as you try to build your own “ultimate team.” It’s easy to get lost in constantly re-upping for more card packs for better players. Players purchasing hockey, football or basketball cards for various fantasy modes could easily spend hundreds of dollars trying to unlock their favourite players. We’ve all heard a story or two of irate parents stuck with a massive bill as a result of this practice.

An age gate system or mature rating would do wonders, blocking out the chance for young gamers to make wagering-based purchases.

FIFA 19 FUT Champions Ultimate Team

An intervention by the ESRB

Intervention

As a parent, I want to know if a game my son is playing gives him the opportunity to gamble. If it does, it should be rated into an adult category. The ESRB has never worked à la carte, taking a black-and-white approach. For example, if your game is extremely violent, even if you can “turn off the blood”, you still get slapped with an “M for Mature” rating, and rightly so. Adult content is adult content, and it’s intended for a mature audience.

The same should happen for games with loot boxes. Although some game modes may not contain gambling, for the mode that does, it needs to be taken seriously and be rated accordingly. If real money is changing hands in-game via a wagering-based system, it should carry an 18+ or higher rating. This would vary depending on local, provincial and state laws, but in almost all cases it would fall under an Adults Only (AO) rating, as it’s “gambling with real currency” as outlined by the ESRB.

Getting stricter with ratings would prevent the aforementioned stories of children accidentally purchasing thousands of dollars’ worth of content from cropping up. Surprisingly, the ESRB has been mum on the loot box issue, only offering an “in-game purchases” label on games with loot boxes. It’s far too little for such a serious issue that potentially preys upon youth and other vulnerable gamers.

Adult content is adult content, and it’s intended for a mature audience.

Room for compromise

Compromise

Unfortunately, loot boxes aren’t going anywhere anytime soon, as they continue to generate massive amounts of profit for publishers. But more needs to be done to ensure that vulnerable parts of the gaming community are protected from these wagering-based mechanisms.

Developers could look at loot box-based DLCs that are rated “Adults Only” and can be added-on via stringent adult verification. This could be one of many compromises, but in the meantime, children are currently gaining access to games with real gambling in them. The issue of loot boxes in games continues to grow rapidly with more governments and courts of law around the globe getting involved. The more headlines loot box-based stories claim, the worse it looks for the industry, as ethics and consumer well-being are taking a backseat to quarterly earnings.

Loot boxes in the form of hockey bags in NHL 19

seperator

Matthew's Take

Author

Loot boxes are here to stay for now, but there needs to be stricter regulations put in place to protect consumers. Not calling loot boxes gambling tools is shortsighted and arguing semantics. They share far too many similarities to be viewed otherwise, and the longer they are pushed on gamers as something else, the worse it looks for the gaming industry. Gaming, in general, has been under siege for decades due to the misconceptions around the impact of violence in games. While the industry and its most vocal opponents have moved away from that argument, for the most part, a new massive morality and ethics storm is raging around loot boxes. It’s time to properly regulate this nature of wagering before it does irreparable damage to the video game industry as a whole.

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Matthew “Dapper Tux” Rondina has been involved in all things gaming since the 8-bit era. He is a veteran of the video game and tech industry who has been passionate about technology and gaming for over 20 years. His gaming legacy began with the NES and he’s been playing on every platform he can get his hands on ever since. He has rubbed elbows with industry titans such as Shigeru Miyamoto, Shuhei Yoshida and Phil Spencer giving him an in-depth perspective on the industry. Whether adventuring with Mario, The Master Chief or Nathan Drake he’s always looking for great gaming experiences across a multitude of platforms. He has been covering interactive entertainment and esports on the web, in video series, podcasts and on international television. Follow Matthew’s gaming adventures on twitter and instagram @dapper_tux and join in on the fun!