Are loot boxes gambling? What if your gambling commission says they’re not? What if the law says they’re not?
The United Kingdom is seeking the answers to all these questions and more with the latest report from their “Department for Digital, Culture, Media & Sport Committee”.
Speaking out against the UK Gambling Commission, the report’s scathing language (and contemporaneous commentary) seeks not to change the law’s existing language, but to reinterpret it.
The road to hell really is paved with good intentions…in “Virtual” Legality.
#UK #Gambling #Lootboxes
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Discussed in this episode:
“Oh Hooooooeg, loot boxes are back in the news!”
Tweet – September 12, 2019
Joseph La Russa (@Joseph_La_Russa)
“FIFA Furor! Why the UK may have just stopped Loot Box Bans (VL77) (Hoeg Law)”
“Fifa packs and loot boxes ‘not gambling’ in UK”
BBC News – July 22, 2019 – Zoe Kleinman
“Gambling Act 2005”
UK Public General Acts (Gaming, Section 6)
“UK officials call for loot boxes to be regulated like gambling
Engadget – September 12, 2019 – Georgina Torbet
“Immersive and addictive technologies – Summary”
UK Parliment Webpage
“Immersive and addictive technologies report published”
UK Parliment Webpage
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“Virtual Legality” is a continuing series discussing the law, video games, software, and everything digital, hosted by Richard Hoeg, of the Hoeg Law Business Law Firm (Hoeg Law).
Rick has practiced for more than a decade at some of the country’s largest law firms, representing IT, software, video game, and other technology companies, as well as the individuals and institutions which fund them.
DISCUSSION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS LEGAL ADVICE. INDIVIDUALS INTERESTED IN THE LEGAL TOPICS DISCUSSED IN THIS VIDEO SHOULD CONSULT WITH THEIR OWN COUNSEL.
Any and all feedback is appreciated. Let us know what you think!
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FOR MORE CHECK US OUT:
On Twitter @hoeglaw
At our website:
On our Blog, “Rules of the Game”, at
On “Help Us Out Hoeg!” a regular segment on the Easy Allies Podcast (formerly GameTrailers)
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You always get your "money's worth"…in "Virtual" Legality.
David Zindle is a scam artist. I talked to him in DC during the loot box convention. He didn’t even consider he could be wrong and that his research was middle school era.
A fucking reddit poll? That is the experiment pool we picked from? Where an EA post holds the most down voted post of all time?
"Surprise! Im no longer buying"….is the remedy.
As a lawyer I hope you are more careful in future about terms and confusing the issues. Issue 1, are loot boxes gambling or so similar we want children doing it, and the answer seems to be YES since a 5 year old will get us to the thrill of flashing lights and anticipating and then feeling rush or disappointment and want more (also getting a 5 year old to gamble away his money is pathetic conduct by companies rather than being clear what their allowance money buys). Issue 2, is regulation likely to go to far, but you confuse this by saying "labeling" is "banning". By simply labeling and putting a minimum purchase age this STILL means adults can still buy after being informed by labels of gambling, there is no "ban". Children like a 5 year old would be stopped from buying, either in a physical store or online market. YOU ARE AGAINST THIS? Would you let a 5 year old buy a lottery ticket, or let Cheerios put scratch-off tickets to redeem for toys in cereal boxes. You complain but I am not sure about what.
Loot boxes should definitely be banned, as simple as that.. Weather you like it or not, don't care, my strong opinion because so many parents have seen what little monsters their kids become in their so called quest/need for certain items to stand out from their so called counterparts. Yes parents are also to blame, they have become lazy, but nonetheless this change should definitely occur to make lives easier for families especially when new game hype takes over and the need for it and to to then try to surpass others, addiction.
It will change independent Pointless industries such as YouTubers on YouTube showcasing videos of opening such items as loot boxes to generate income, they would certainly be dead. Perfect. Pointless industries should definitely die out, irrespective weather you agree with me or not, again just by strong opinion.
This episode is in my top five, man Hoeg. Thank you so much for sharing your perspective and in doing so, providing perspectives.
I can’t wait until your channel blows up. (In a good way)
I think you may be misinterpreting what the select committee is advising, at least in part. You did mention at the begining that you are not that familiar with how the UK system works, and I think you may be interpreting some language through a US mindset that is causing misunderstanding – "the government should…" in a British context does not necessarily, or even primarily, suggest that an executive action is being asked for, since we don't have the same separation between legislative and executive branches that the US has.
The government is being asked to set up a scientific working group to examine the issue of gambling in games, within a timescale that allows it to be taken into consideration by the planned online harms legislation – so new primary legislation currently in the works, which would be put forward by the government and then debated and enacted (or not) by parliament to create new laws.
It is also being asked to amend the Video Recordings Act to bring online games under the same age-restriction regime as physical sales – this again would be something that the governement would propose to parliament, who would then amend the law or not.
It is being asked to regulate that loot boxes are games of chance under the gambling act as it stands, however it is not being asked to squeeze new activities into old definitions by creative reinterpretation. The Secretary of State is being asked to use powers specifically granted to him or her under primary legislation (section 6 of the Gambling Act 2005) to define a particular activity as a game of chance:
The Secretary of State may by regulations provide that a specified activity, or an activity carried on in specified circumstances, is or is not to be treated for the purposes of this Act as—
(a)a game;
(b)a game of chance;
(c)a sport.
That is hardly creative reinterpretation. That is a law passed by parliament that specifically allows the government to make changes of exactly this type, presumably because situations like this were foreseen. The committee (a bipartisan group of lawmakers remember) is saying the government needs to use this power or produce a paper setting out the reasons why it won't (so that it can be held to account).
There are other recommendations where purely executive action is being asked for – do more research into the issue, pressure the game industry for the data needed in order to get an informed picture of player behaviour, and to apply the industry's own rules about gambling in games to loot boxes. But I don't see any of these as executive overreach…
You probably dont need to be a lawyer to know the law is what the most powerful source says it is – whether that source comes from the people or wealthy organisations, etc; meaning Whether this should be considered as gambling or not depends on the size of your wallet or the strength of your conviction.
Saw the same report on YongYea's channel earlier, definitely interesting to get a lawyer's perspective!
I think that if new legislation is needed here, it is not new legislation specific to loot boxes as distinct from existing gambling, but rather, legislation that redefines "money's worth" to include digital items. If people are willing to spend money in a digital landscape, then the things they buy must have "money's worth" by default. More and more products are bought and sold digitally, and it's a wild west out there, so long as the big companies get theirs. If you buy a bunch of games on an online platform, and they shut down, you can lose all that you bought, with no recourse, because that's how they have structured the licensing deals involved. I'm not saying they are acting illegally, I'm saying that it should be illegal.
We need to have an online bill of rights that codifies consumer rights in the online space to be comparable to in the real-life space. We need to have guaranteed rights to permanent ownership over digital goods, not just limited licenses. We need to have guaranteed rights to resell our digital goods to others, so long as there are reasonable safeguards against duplication. And yes, if you spend money, and all you get as a result is a digital item of random value, that should definitely be considered to be gambling. People need to have equal rights to their "property" in the online space as they are assumed to have in the real world.
If the UK Government really wanted to change the law to better regulate (or even ban) lootboxes, it could easily do so.
For example, around a decade ago they had no problem pushing through emergency bills that retroactively changed the law and undermined a previous High Court ruling which declared thousands of people were to be compensated for falling foul of the Department of Work and Pensions' hated "workfare" scheme.
So, I suppose the question is: Would it serve the interests of a Conservative UK Government to ban or put tighter regulations on lootboxes?
This is a strange issue, the regulators are inexperienced and do not see electronic property as valuable, much in the same way that the US is now addressing how personal data has real world value. What they are doing should generally be applicable to current existing laws in the same way you can't go to a dealer and place $20 down on a chance to win a prize that could be a new BWM but is likely chotzke.
Only a rare few care if gambling exists, the issue is this is geared towards teenagers who have not developed enough self restraint to cope with gambling pressures. If the games were 18+ or 21+ no one would care as evidenced by the fact there was no outcry against actual gambling websites. But that would exclude these company's target demographic.
I remember being stuck on that trivia test in Leisure Suit Larry as a kid. English wasn't my first language which made it harder as well. In the end it was too confusing.
Got to say Hoeg, When I read the report for the first time I was too busy cheering to read carefully how they planned on regulate loot boxes. I would much rather have new laws made then making some messy changes to the language.
Actually, I would rather have loot boxes disappear entirely from the video game space. (They can have mobile…maybe.) But I am willing to settle for just a sticker on games with Loot Boxes, something i think the ESRB and PEGI could both accomplish, but they haven't. So we now have this mess. I would have preferred the gaming industry itself handle this but…
Also a quick word on on using sci-fi movies as a reference points in a government report. The point they made is still valid, sure they might have lost a few points in professionalism for referencing it in this document. We are trudging along slowly in the ways of virtual reality, and i got to say: A "Wall-E" future might not be too far off.
Lastly my favorite question from the Leisure Suit Larry game: What song did Clint Eastwood sing in "Paint Your Wagon?"
L&R Hoeg