Are loot boxes a form of gambling?

This is the question that the Dutch Gaming Authority (KSA) is investigating because if this is the case, then these loot boxes are illegal. With the current (outdated) Dutch law on gambling, all forms of online gambling are still banned in the Netherlands at the moment.

There are online games in which players can obtain these so-called ‘loot boxes’ as part of the game. In these virtual boxes, for example, there are upgrades and outfits for characters. Players do not know in advance what they will find in a purchased box, and in a number of games they can also be bought with real money. Here the issue starts for the KSA.

At the moment, several large online games, such as Call of Duty WW2 and Star Wars Battlefront II, use loot boxes. When it is decided that this is a form of gambling, this also means that many minors, who are crazy about this type of games, come into contact with this. Incidentally, game publisher EA has modified the game Battlefront II shortly after launch and turned off the loot boxes option. According to the website, this was done after the CEO of Disney, the owner of the Star Wars franchise, phoned the CEO of EA.

“Especially in the case of minors there is a risk that they can not easily see the consequences of such games”, the Gaming Authority recently warned. The games could be addictive and even lead to gambling debts.

No licensing system

“Suppose we assume that this is a game of chance,” says a spokesperson for the Gaming Authority to Dutch news site “In the Netherlands, a game of chance is subject to licensing when a prize or premium can be won.” For online gambling, we do not have a licensing system yet, so if someone offers an online game of chance, then this party is in violation which can result in enforcement action and a penalty for the provider.”

This could mean that the sales of games with loot boxes in the Netherlands could be banned until a new law for online gambling comes into effect. A law for this was adopted in 2016 by the House of Representatives and now lies with the Senate. It is expected that this will only come into effect in the first quarter of 2019. In case of a possible ban on these games, the question again is how the KSA intends to maintain this, because these games are not only sold in stores, but also online.

Politician Michiel van Nispen (SP) recently asked parliamentary questions to the Minister for Legal Protection about games that use loot boxes. Among other things, it asks whether the minister wants to take steps to bring the risks of the games under the attention of minors and parents.

For the time being, the Gaming Authority is only currently engaged in research into this online phenomenon and so no measures will be taken in the short term. It once again shows how difficult the Dutch politics find the ever digitizing world where things like online gambling, e-gaming and games with gambling-like elements will continue to grow in popularity and appearances. Incidentally, the Belgian Gaming Commission also started an investigation this week into loot boxes in games start, according to VTM News.