Loot Boxes are Gambling and Need Regulation, Says House of Lords

By Holly Brockwell on at

We can't imagine the Lords of the UK spend much time playing games with loot boxes in them, but nonetheless they've decided the popular reward mechanism should be regulated.

The House of Lords Gambling Industry Committee says loot boxes, which give a random reward when you open them, are technically "games of chance" and therefore fall under the remit of the Gambling Act 2005. People arguing otherwise might struggle to explain why the boxes are often traded for actual real-life cash, since they can be lucrative if you get the right contents.

The committee's giant report makes 66 recommendations, of which it says many don't require new legislation and can thus be enacted quickly. It states that "all of them are urgent if consumers are to be protected and lives saved."

While the report and accompanying material covers a huge variety of types of gambling, it specifically mentions loot boxes numerous times, including the statement:

"The government must act immediately to bring loot boxes within the remit of gambling legislation and regulation."

The committee is particularly concerned that loot boxes, skins and other random reward mechanisms train young gamers to gamble early in life, which can lead to severe problems later. The report also mentions how some other countries have handled the issue:

"The concern with loot boxes is that since it is chance as to what items are included in any purchase, it is effectively gambling. A recent academic paper states 'loot-box systems share important structural and psychological similarities with gambling.' Indeed, a number of US States have considered or are considering legislation to outlaw loot boxes. Belgium has outlawed them. The Netherlands has ruled that loot boxes in certain games have been illegal."

While the Department for Digital, Culture, Media and Sport has previously said loot boxes should be considered gambling products, the Gambling Committee had said they're "not gambling." So the new statement marks a significant turnaround in the Lords' approach.

The Committee also recommend the minimum age for the National Lottery should be raised from 16 to 18 to further protect young people from gambling their lives away. [BBC]