Australian gambling regulators are considering whether pay-to-win “loot boxes” in video games constitute gambling and may be in breach of state laws.
The recent release of Star Wars Battlefront 2, one of the year’s gaming blockbusters, has renewed a global debate about the convergence of gambling mechanisms and video games.
Authorities in Belgium and a legislator in the United States have both expressed concern about Battlefront 2’s reliance on loot boxes, a randomised system of reward that can help a player progress through the game.
The game’s progression system relies significantly on the boxes, which can be purchased using real money to give the player equipment and “star cards” with varying levels of effectiveness for their character.
A character may, for example, get lucky and unlock an ability to cause significantly more damage. Or a player might pay and unlock relatively weak upgrades that do little to advance their character.
The Belgian gaming commission has launched an investigation into loot boxes and in-game purchases.
In the United States, a Hawaiian legislator, Chris Lee, criticised the game, describing it as a “Star Wars-themed online casino designed to lure kids into spending money”.
The backlash prompted the game’s publisher, Electronic Arts, to remove in-game purchases from Battlefront 2 on the eve of its full release.
The concerns about loot boxes in video games are not new.
But Battlefront 2’s release has provoked heated discussion within the gaming community, and appears to have been the last straw for gamers angry at developers’ increasing use of in-game purchases to milk money from users.
This week, email correspondence between an Australian university student and a strategic analyst with the Victorian commission for gambling and liquor regulation (VCGLR) was posted on Reddit.
The analyst confirmed the use of loot boxes was being considered at a federal and state level, and said the use of loot boxes would constitute “gambling” under Victorian law.
“The idea that (genuine) progression in a game could be reliant on the outcome of a random number generator is at odds with responsible gambling and the objectives of our acts,” the analyst wrote.
The regulator is still attempting to determine whether it met the definition of “unauthorised gambling” under Victorian gaming law.
The analyst said the practice tended to normalise gambling among minors, something he described as not just “morally reprehensible, but is also legally questionable”.
Others have urged for restraint in the debate.
Daniel King, a senior research fellow with the University of Adelaide’s school of psychology, has expertise in video game addiction and problem gaming.
King agreed Battlefront 2 crossed a line and had “predatory” features, but cautioned against direct comparisons between loot boxes and gambling.
He said he did not believe the use of loot boxes met the legal definition of gambling, largely because the prize had no monetary or secondary market value. There was no financial return to the player buying the loot box.
“I wouldn’t call it gambling, because it doesn’t meet the legal definition in my view,” he said.
“That being said, I still think it employs a fairly predatory or exploitative feature. And I’m not saying the company necessarily intended to make it… It didn’t come out of the blue. This has been a progression that’s happened over the last 10 years. This is essentially the next step in that progression.”
But the practice, according to King, does pose real risks to the small number of gamers who have addictions to video games.
Those who were addicted to gaming spent more and more of their income on in-game purchases, making their addiction increasingly harmful.
“This is where I think we might be needing to recognise the financial consequences of overspending in games, in its own right, as opposed to gambling,” he said.
“I think if the conversation becomes about gambling, it might misdirect attention.”
Regulators face a significant problem in policing gambling in video games, even if they do deem the practice unlawful.
How, for example, would a Victorian state regulator police the actions of a foreign game developer?
It was a problem contemplated in the email correspondence posted to Reddit.
“We are currently engaging with interstate and international counter parts to progress wider policy changes and to modernise and inform both federal and state-based legislation,” the analyst said.
In a formal response to the Guardian, the regulator said it had not yet deemed the practice to be “unauthorised gambling”.
But it said it was “aware of the issue of ‘loot boxes’”.
“This is a complex issue and the VCGLR is committed to working with other agencies and jurisdictions to address the risks involved,” a spokeswoman said.
The publisher of Battlefront 2, Electronic Arts, has denied its use of loot boxes constitutes gambling.