UK Digital Minister Says Loot Boxes Aren’t Gambling

UK Digital Minister Says Loot Boxes Aren’t Gambling

UK Parliament’s Investigation Committee on gaming, the UK Minister for the Digital and Creative Industries Margot James stated that digital loot boxes are not a form of gambling and does not want to pursue regulation against their presence in gaming.

On Tuesday, Margot James MP appeared before the special Commons committee of the UK Parliament as part of an ongoing inquiry on immersive and potentially addictive technologies, which naturally focuses on digital gaming and the gaming industry. Loot boxes are one of many considerations of the special committee, but the issue is a major one and was the focus of the hearing on July 2nd.

As reports, a committee member asked James for her thoughts on loot boxes, “or, as EA rather bizarrely called them, ‘surprise mechanics‘,” he added, and claimed that in the days following the comments from EA’s Vice President of Legal and Government Affairs Kelly Hopkins many gamers wrote in to express that the loot box method of monetizing is harmful and itself a form of gambling.

The member also referred to strict laws in Belgium and the Netherlands that actively ban loot boxes in digital gaming, and asked when the UK’s governing bodies would “catch up” and “recognize that loot boxes are in fact gambling.”

The Digital Minister James responded to the question by saying that there were “a number of assumptions” made that she did not agree with, citing the difference in Belgian and Dutch laws on offline gambling that have colored their approach to online or digital gaming. Without elaborating on the differences, James stated that in the UK, gambling laws have more to do with the aspect of “pure chance.”

“The fact that other European countries have taken action I think is more to do with them taking their offline gambling laws online, and our gambling laws are different,” James explained to the members.

Furthering the point, James added that she “would also contest the assumption that loot boxes are gambling. I don’t think the evidence I’ve read from your committee’s hearings would support that assumption either.”

Loot boxes are a means of people purchasing items, skins, to enhance their gaming experience, not through an expectation of an additional financial reward. And also, more importantly, they can’t be traded offline for money.

Concluding, James said, “I think there are big differences, and I don’t think really it is true to say loot boxes are gambling.”

James also marked the difference between loot boxes that award cosmetics and those that award in-game benefits, typically derided as “pay to win” mechanics. “I can see that some might be potentially more dangerous in terms of that correlation with propensity to gamble and the emergence of problem gambling,” she said.

James also claimed that the issue may be less about exposing vulnerable groups to gambling and more a matter of “children or young people […] spending money they don’t have in excessive quantities in order to make online or in-game purchasing.”

When pressed by the committee to clarify if James felt that loot boxes are not worth concern, James responded with, “I didn’t say that.” She explained that “if evidence were presented […] that loot boxes were a gateway to problem gambling, then I would be concerned […] with particular reference to young people I think we have to be vigilant and if evidence does emerge that loot boxes [lead to] problem gambling, then we need to take that seriously.”

James added: “But I don’t think the evidence is really there yet. There are not many studies — that’s not to say we shouldn’t be initiating more research… [But] you need the evidence as a justification for taking action, particularly if you’re talking about regulation.”

Another committee member cited research being done on the link between gambling addiction and loot box mechanics, but James rebutted by emphasizing the importance of being “careful,” because “those two modes of research are different and I think we should respect that.” We can’t necessarily assume that because there’s a correlation between A and B that there is a causal link.

When asked if James’s department was “complacent” in the loot box problem by not acting in favor of regulation preemptively, James said that they are “looking at links […] looking at evidence that is emerging. It’s quite a young area of research. We are not complacent, we’re looking at this very closely… But I do think it’s important that before regulation and action of that nature is attempted, we get a better understanding of the root causes of the sort of problems you’re alluding to […] So I do think it’s important that we don’t just sit back and wait for evidence; we lean forward and look for evidence, but we are dispassionate and objective.”

The committee’s focus expanded from gambling to excessive immersion, referring to the World Health Organization’s recent classification  of “gaming disorder.”  James stressed that the “general view among specialists” is that only 1% of gamers experience this type of problem.

I would not sit here and be in denial that some people can have a very, very serious problem.

James clarified that she “did say that I thought it was strange there was so little [research] in this area. Gaming has been a big business for a long time — a good 20 years — and there hasn’t been a lot of evidence in this area and I think there should be more research.” James also referenced the WHO itself stating the need for more research into this area of mental health and gaming.
In the United States, The Federal Trade Commission has investigated loot boxes, and the U.S. Senator Josh Hawley of Missouri has proposed legislation to ban “manipulative” monetization that targets children.