The UK government will refrain from regulating loot boxes in games

The UK government is refraining from regulating loot boxes in video games for the time being. Under a revision of the Gambling Act 2005, the game mechanics could possibly be labeled as gambling, but that is not the case for the time being.

For the time being, the British government expects game developers to take measures to protect any vulnerable gamers according to a report of the investigation conducted by the Ministry of Digital, Culture, Media and Sport. Although the ministry sees a similarity between gambling and loot boxes, the fact that game content has no real monetary value is an important distinction. This is also the most important parameter in the Netherlands, where loot boxes are prohibited in certain configurations.

In the report, the ministry underlines that the country’s gambling commission takes action when loot boxes do contain gambling elements. When loot boxes are added to a game for reasons other than to ‘enrich the gaming experience’ or when the contents of a loot box can be legitimately traded for real money, the commission may apply. In that case, offering loot boxes is regarded as ‘gambling without a licence’.

The United Kingdom government is not completely abandoning loot boxes for what it is. The Ministry has created the Video Games Research Framework to better map the consequences of loot boxes on vulnerable gamers. A working group is also being set up where representatives of the gaming industry, government departments and regulators will work with academics, consumers and ‘third industry groups’ to discuss the game mechanics.

Based on the research of the relevant ministry, the British government has made some concrete statements about the content of loot boxes in video games. For example, purchasing loot boxes must be impossible for children and young people unless there is permission from a parent or guardian. In addition, everyone should be made aware that there are limitations for in-game expenses; this information must be transparent.

On the other hand, more research would be needed based on better data for possible future legislation on loot boxes. According to the British government, there are three possibilities: game companies and platforms can adjust their practices to protect the consumer, the relevant gambling legislation can be amended or other laws intended to protect the consumer can be tightened. It is not clear when the next study will be carried out.