EU regulators want to crack down on loot boxes

Clash Royale’s version of the loot box, allowing players to chose between lengthy playtime or immediate purchase.Supercell

• European regulators are questioning whether video games featuring random prizes you have to pay real money to get are the equivalent of gambling.
• During a meeting of the Gambling Regulators European Forum, 15 European regulators and the Washington State Gambling Commission signed a joint statement expressing concerns over loot boxes, skin betting and other similar practices.
• Belgium and the Netherlands have already declared that loot boxes violate their national gambling laws, and have banned the practice.
• Belgium recently announced a criminal investigation of game publisher Electronic Arts for its continued implementation of a loot box system in its recent “FIFA 19.”

The video gaming industry continue to come under fire for including “loot boxes” and other randomized content for purchase in recent titles.

The Gambling Regulators European Forum released a joint statement signed by regulators from 15 European countries and the Washington State Gambling Commission on September 17, expressing concern that the prize systems in some high-profile games are tantamount to gambling.

“We are increasingly concerned with the risks being posed by the blurring of lines between gambling and other forms of digital entertainment such as video gaming,” the statement reads. “Concerns in this area have manifested themselves in controversies relating to skin betting, loot boxes, social casino gaming and the use of gambling themed content within video games available to children.”

Loot boxes are packages containing digital items for use in-game, and that can earned by playing or by purchase. The items inside each virtual box are randomized, with odds of encountering each set by the developer — some especially rare items come with really long odds. In some cases, the items inside a loot box can enhance the player’s gameplay, creating an added incentive to spend real money to acquire a digital item faster. 

Some loot boxes contained exclusive items that are only available for a limited time. Like this Halloween-themed loot box from Overwatch.Blizzard/YouTube

In the statement, the regulators’ forum compared the practice of including loot boxes to online gambling, and said the regulators involved will continue to push back in the interest of consumer protection.

The forum also plans to continue raising awareness so that parents can better identify when their children’s video games are promoting what could be seen as gambling. As regulators continue to define the line between video games and gambling, they said it would be in the best interest of developers to engage in conversations with regulatory authorities to ensure that their games are not in violation of the gambling laws in each market. 

Loot boxes were removed from “Star Wars: Battlefront II” due to public backlash.EA DICE

Last year the implementation of loot boxes in “Star Wars: Battlefront II” garnered attention from the U.S. Congress for what it saw as predatory tactics —  the development team’s response defending the practice is the most disliked comment ever on Reddit. The fierce backlash led to monetized loot boxes being removed completely, in favor of free in-game rewards.

Loot boxes are still featured prominently in several popular games, including “Overwatch,” “FIFA 19,” “PlayerUnkown’s BattleGrounds,” and “NBA 2K19.” For some titles, like “Counter-Strike: Global Offensive” and “DOTA 2,” players will even wager or sell cosmetic items from loot boxes, creating small grey-market economies.

Belgium and the Netherlands have been leading the charge against loot boxes, having declared the business model illegal in April 2018. Following an investigation, Belgium’s Gaming Commission found “FIFA 18,” “Overwatch” and “Counter-Strike: Global Offensive” to be in violation of its gambling laws.

In response, “Overwatch,” “NBA 2K19,” and other games have disabled the sale of loot boxes in both countries. Overwatch publisher Activision Blizzard had already begun publishing the odds for each item in the loot boxes in order to comply with a new set of Chinese regulations. Apple implemented a similar rule for iPhone games in December 2017.

The “Ultimate Team” mode in sports games made by Electronic Arts offers a wide variety of micro transactions mimicking loot boxes.PlayStation Store

However, Electronic Arts still plans to include loot boxes for sale in “FIFA 19,” leading Belgium to declare a criminal investigation into the company earlier this month. 

In “FIFA 19,” players can purchase card packs to build their own soccer team in the game’s Ultimate Team Mode, with rare cards helping to build a stronger squad. EA said it plans to publish the odds for each card pack, but that may not be enough to satisfy Belgian authorities. “FIFA 19” will release on September 28th, and the company has said it plans to continue working with regulators.