The UKGC May Allow Loot Boxes, but That Doesn’t Mean They Have to Like ThemPublished December 2, 2017 by Lee R
The UKGC has come off of the fence on loot boxes, consistent with official worldwide.
The UKGC is prohibiting a controversial promotion that has caught the iGaming world by storm.
Permissible Not Licensable
Due to the fact that their contents rely on chance, the UKGC has determined that loot boxes fail to meet the UK's criteria for lawful gambling.
The UKGC ruled that since the prizes embedded in the virtual loot boxes are usable only in the games in which they're won, and can't be cashed-out, they don't qualify as "licensable gambling activity."
However, the lack of qualification of the loot boxes as legal does not make them sanctionable, because the loot boxes found in so many games including EA’s wildly popular Battlefront II and Blizzard's Overwatch do not technically constitute illegal gambling.
UKGC Warnings Nonetheless
As an organisation the UKGC weighed in on the subject by frowning on the use of the loot box promotion in general, acknowledging that while "the line between video gaming and gambling is becoming increasingly blurred," the UKGC can only regulate practices that meet the definitions of gambling under UK law.
Fixing the Values
The monetary relationship of the items in the gift boxes to relative financial values played a role in the UKGC perspective, as the commission attested:
"A key factor in deciding if that line (qualifying an activity as gambling) has been crossed is whether in-game items acquired via a game of chance can be considered money or money’s worth."
The fact that the items in the boxes cannot be cashed out removes them from being considered as having a direct financial relationship to monetary gains from playing the games they promote.
In other words, the UKGC cannot sanction what it cannot regulate. But that does not mean the UKGC does not feel entitled to an opinion, just like anyone else.
The UKGC’s warning:
"Many parents are not interested in whether an activity meets a legal definition of gambling. Their main concern is whether there is a product out there that could present a risk to their children.”
The issue arose in Belgium most recently, with the Belgians seeking to ban loot boxes in Europe on the heels of its own nation jurisdiction Gaming Commission’s determination that loot boxes do fall under its authority. Meanwhile, in the United States, the ESRB held that loot boxes did not qualify as gambling.
Objections of One State Official
At the state level, one intervention proposed in Hawaii was state representative Chris Lee’s suggestion of ban imposition on games sales featuring loot boxes to players under 21.
The state Congressional debate was a vociferous affair followed by a news conference in which Hawaii state Reps. Chris Lee and Sean Quinlan characterised loot crates as preying on children, and specifically naming EA’s Star Wars Battlefront 2.
This resulted in EA removing microtransactions for a spell.
While the UKGC is conscious of its jurisdictional boundaries, the organisation is also willing to take a stand on controversial iGaming issues that it does not control. And in the case of UKGC’s ethics, the disapproval may speak louder socially than the legislative forbearance.