Precious and worthless: A comparative perspective on loot boxes and gambling.


Available online article from the Minnesota Journal of Law, Science & Technology made available via the University of Minnesota Law School.


Abstract: Odds-based microtransactions in video games, or “loot boxes,” offer users a chance to get special game items for actual money (i.e., legal tender), as opposed to acquiring this “loot” through in-game achievements. This feature provides revenue for game developers and allows users to acquire items that would otherwise require hours of gameplay. But loot boxes threaten to degrade game design and foist addictive mechanics on vulnerable users. Loot-box purchasers, much like pathological gamblers placing a wager, report an initial rush when opening a loot box and then a wave of regret and shame. This problem is especially acute in underage consumers who spend thousands of dollars to gain a desired item. Governments are aware of this disturbing trend and are attempting to regulate or outright ban the practice.
Present attempts to constrain game developers are predicated on a finding that selling random virtual items is in fact gambling. That approach is flawed. Loot boxes are unlikely to meet the legal requirements of gambling on account of two factors: users are guaranteed to receive at least one item and all items offered have no tangible value. Moreover, prohibiting the practice may encourage political actors to further censor video games, a popular scapegoat following school shootings and other tragic events. While loot boxes may not constitute gambling, the troublingly opaque nature of loot box odds warrants intervention. Accordingly, this Essay offers a novel dual-pronged transparency-based solution that avoids an outright ban on the activity. First, the odds of obtaining specific loot should be disclosed to consumers. Second, regulators should require game developers to rate such games as appropriate for adults, not children.
Available online

Reference: Moshirnia, A.V. (2018). Precious and worthless: A comparative perspective on Loot Boxes and gambling. Minnesota Journal of Law, Science & Technology, 20(1), 77-114. Retrieved from: https://scholarship.law.umn.edu/mjlst/vol20/iss1/5

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The Same or Different? Convergence of Skin Gambling and Other Gambling Among Children


Available online – article from the Journal of Gambling Studies via SpringerLink.


Abstract: There is increasing attention on the introduction of gambling-like practices within video games. Termed convergence, this has been explored from the viewpoint of the product, examining similarities in game/gambling mechanics. Understanding convergence of practice is essential to map the epidemiology of these behaviours, especially among children. This paper focuses on the betting of skins within video games to explore co-occurrence with other forms of gambling among British children aged 11–16. Analysing the British Youth Gambling Survey showed that 39% of children who bet on skins in the past month had also gambled on other activities. Betting on skins and other forms of gambling increased with age and concordance of skin gambling/betting was greatest for those who also gambled online. Among gamblers, those who bet skins had higher rates of at-risk and problem gambling than those who did not (23% vs. 8%), though they had a greater breath of gambling involvement. Skin gambling alone was not significantly associated with at-risk gambling when other forms of gambling activity were taken into account. Skin betting and gambling on other activities cluster together, especially where the medium underpinning the behaviours is the same. Children who engage in both skin gambling/betting and other forms of gambling should be considered at-risk for the experience of harms because of their heightened engagement in gambling and gambling-like activities. Access article online

Reference: Wardle, H. (2019). The Same or Different? Convergence of Skin Gambling and Other Gambling Among Children. Journal of Gambling Studies. doi: https://doi.org/10.1007/s10899-019-09840-5

Gaming-gambling convergence: Research, regulation, and reactions [article available via ResearchGate]

Introduction: The convergence of gaming and gambling has been the subject of research, debate, and regulatory consideration over the past ten years as technological advances and consumer preferences are changing the nature in which both activities are offered. Gambling activities are increasingly incorporating gaming features that focus on skill, social interaction, progress, achievement, and competition. Conversely, games have integrated gambling themes and aspects of gambling including randomly-determined outcomes and rewards, including those that require a payment, and increased monetization of in-game items through legitimate and illegitimate marketplaces. The motives for both are related to recognition of the broad appeal of both gaming and gambling, the commercial potential of the activities, and an effort to appeal to a broad demographic, including young adults given the aging player base of traditional gambling activities. The limited factual understanding of the impact of incorporating gambling themes and mechanics into popular games and vice versa has not stopped sensationalist headlines and alarmist reactions that are not evidence-based. Access full article

Reference: Gainsbury, S.M. (2019). Gaming-gambling convergence: Research, regulation, and reactions. Gaming Law Review. https://doi.org/10.1089/glr2.2019.2323

Paying for loot boxes is linked to problem gambling, regardless of specific features like cash-out and pay-to-win: A preregistered investigation (open access preprint)

Zendle, D., McCall, C., Barnett, H., & Cairns, P. (2018, October 13). https://doi.org/10.31234/osf.io/6e74k

Abstract: Loot boxes are a common element of many video games. The defining feature of loot boxes is the element of chance. Players can buy loot boxes for real-world money, but they do not know a loot box’s content or value until they have opened it. Due to similarities between loot boxes and gambling, various countries are considering regulating them to reduce gambling-related harm. Indeed, prior research demonstrates a robust correlation between loot box purchases and problem gambling. However, loot boxes differ from each other in significant ways. For example, some loot boxes contain items that can be re-sold to other players, whilst others do not; some loot boxes contain items which give a gameplay advantage to players, whilst others do not. A key problem facing regulators is determining which types of loot boxes should be regulated to mitigate gambling-related harm. In this study, we specify a variety of different features that loot boxes may have. We then use a large-scale preregistered correlational analysis (n=1200) to determine if any of these features strengthen the link between loot box spending and problem gambling. Our results indicate that some loot box features may weakly strengthen the relationship between loot box spending and problem gambling. However, our main conclusion is that regardless of the presence or absence of specific features of loot boxes, if they are being sold to players for real-world money, then their purchase is linked to problem gambling. Access article preprint

Watch your loot boxes! – Recent developments and legal assessment in selected key jurisdictions from a gambling law perspective [open access article]

Schwiddessen, S. & Karius, P. (2018). Interactive Entertainment Law Review, 1(1), 17–43. doi: 10.4337/ielr.2018.01.02

So called loot boxes are one of the most important monetization methods for many companies in the video gaming, social gaming and social casino gaming industry. After the global skin betting scandal in 2016 and the 2017 loot-box uproar, loot boxes are now under investigation or even subject to legislative measures in several jurisdictions. Since then, numerous regulatory authorities, politicians and other stake holders have issued statements on the matter. From a legal perspective, loot boxes can touch gambling, youth protection, consumer and even financial laws. Characteristic of the 2017 loot-box debate was a black or white view and people taking extreme positions. In particular, gamers and people not familiar with the subject tend to condemn loot boxes as gambling. However, taking a closer look at selected key jurisdictions shows that the application of gambling laws depends on the jurisdiction and on the exact set up of the loot box mechanism. Furthermore, some questions are not conclusively solved yet – not even in those jurisdictions which are regarded as loot-box safe havens. One of these questions is, for instance, the impact of secondary-market trading of loot-box-generated items. This article evaluates the legal situation of loot boxes from a gambling law perspective in selected jurisdictions. Full article

Video game loot boxes are psychologically akin to gambling (subscription access article)

Aaron Drummond & James D. Sauer (2018). Nature Human Behaviour. doi: 10.1007/s11469-018-9950-4

Video games are increasingly exposing young players to randomized in-game reward mechanisms, purchasable for real money — so-called loot boxes. Do loot boxes constitute a form of gambling? Playing video games is a common pastime in industrialized nations, with 65% of US homes including at least one gamer. To increase the longevity and profitability of their products, video game developers are, with increasing frequency, incorporating … Article details and references