Loot Boxes Not Gambling, Confirms The UKGC

Viktor Vangelov | Published 24 Jul 2019, 2:43 p.m.

Yesterday we discussed Paddy Power and their new ‘sponsorship deal’ which turned out to be a clever marketing ploy and we have a range of several other topics today. As we’ve reported on several occasions in the past few months, and even the past few weeks or so, the Gambling Commission has launched several initiatives. Measures have been taken against several operators and several fines have been paid.

Last week we reported that the age limit for all games organised by the National Lottery could be raised to 18, while currently there are games that can be played by players who are younger than 18, but older than 16. Earlier this week we reported on another casino operator that was fined by the UKGC.

For a total of 12 months, operators paid £19.6 million in fines. Overall, the attitude towards online gambling in the UK has been rather restrictive and there were quite a few initiatives aimed at putting a limit on multiple forms of gambling.  

However, in the case of loot boxes and FIFA packs alike, the UKGC doesn’t feel that these are a form of gambling.

No Direct Monetary Value – Not Gambling

The Commission has just informed Parliament that it is not in charge of regulating the purchase of loot boxes, FIFA packs and other in-game purchases. The reason is simple – there is no authorised way to monetise these boxes, i.e. what’s inside them, so they don’t have a real financial value, thus the activity cannot be considered a type of gambling.

According to current UK laws, a prize has to be consisted of real money or have a monetary value, if neither of these is the case, then it is not in the domain of the UKGC. However, the Programme Director of the Gambling Commission admitted that there are plenty of unauthorised sites where it is possible to place wages using lot boxes content. In fact, Brad Enright went as far as to admit that there is a constant battle against these sites.

Many parents have complained that their children have spent hundreds of pounds on in-game packages on video games. Even though it is not technically a form of gambling, the outcome, i.e. the content of the loot box is unknown and there is an element of chance which then encourages children to keep on getting loot boxes until they get the desired outcome which is a tad problematic.

Concerns Need To Be Addressed

Even the UKGC chief executive, Neil McArthur also stated that there are many concerns when it comes to this type of video games. He added that regardless of that, these games aren’t classified as gambling and as such don’t fall into the domain of activities that are regulated by the UK Gambling Commission.   

He then went on to give examples of other activities that are also not considered to be a form of gambling, even though they feel and look like it.

Not everybody agrees that loot boxes aren’t a form of gambling, for example, Belgium banned loot boxes in 2018, precisely on the grounds that it is a form of gambling.

Multiple third-party websites that aren’t affiliated with the game providers allow players to gamble the contents of the virtual loot boxes they have acquired on casino-style games with the potential to earn real money. This is often called skin betting. Brad Enright said that all developers of conventional games should prohibit these practices, but also that authorities must find a way to stop this.