In 2020 the UK government’s response to the DCMS Select Committee Immersive and Addictive Technologies Inquiry stated that the government would launch a call for evidence to understand the impact of loot boxes. This followed a commitment made by the government to review the Gambling Act 2005 including considering issues around online loot boxes. The government has now published its response to its call for evidence.
In response to the findings of the call for evidence, the government wants to see improved protections for children, young people and adults with regards to loot boxes, and to support better longer term research into the impacts of video games. To achieve this, the government’s view is that:
- purchases of loot boxes should be unavailable to all children and young people unless and until they are enabled by a parent or guardian;
- all players, including children, young people and adults, should have access to, and be aware of, spending controls and transparent information to support safe and responsible gaming; and
- better evidence and research, enabled by improved access to data, should be developed to inform future policy making on loot boxes and video games more broadly.
In considering further actions that could be taken with regards to loot boxes, it has considered three broad types of responses that could be pursued: improved industry-led protections, by games companies and platforms, making changes to the Gambling Act 2005, and strengthening other statutory consumer protections.
It believes that it would be premature to pursue legislation regarding loot boxes without first pursuing enhanced industry-led protections. DCMS will convene a technical working group to pursue enhanced industry-led measures to mitigate the risk of harms for children, young people and adults from loot boxes in video games.
The government’s response to the call for evidence on loot boxes has been developed alongside its review of the Gambling Act 2005. A White Paper setting out the conclusions from the review and vision for the gambling sector will be published as soon as possible.
However, the government has said that it does not intend to amend or extend the scope of gambling regulation to cover loot boxes at this time. It has considered regulating loot boxes as gambling as one means of mitigating the risk of harm for children and adults, and has concluded that it would come with significant limitations. Although many loot boxes share some similarities with traditional gambling products, the ability to legitimately cash out rewards is an important distinction. In particular, the prize does not normally have real world monetary value outside of the game, and its primary utility is to enhance the in-game experience.
The government further says that the Gambling Commission has shown that it can and will take action where the trading of items obtained from loot boxes does amount to unlicensed gambling, and it will continue to take robust enforcement action where needed. In addition, changing the Gambling Act to cover loot boxes would have significant implementation challenges and risks of unintended consequences. For example, it would require substantial changes to the gambling tax system, would dramatically increase the scope and costs of running the Gambling Commission, and it could risk capturing other unintended aspects of video games or activities outside of video games with a random reward mechanism.
In not taking forward changes to the Gambling Act, the government recognises that other statutory consumer protection obligations will continue to be the relevant regulatory framework for loot boxes and wider issues concerning video games. It says that the UK’s current consumer and data protection legislation and guidance provides a strong foundation for mitigating the risks of harms associated with loot boxes for children, young people and adults. Further legislative change may risk unintended consequences. For example, legislation to introduce an outright ban on children purchasing loot boxes could have the unintended effect of more children using adult accounts, and thus having more limited parental oversight of their play and spending.
It intends to keep this position under review, in light of emerging evidence on harms, progress made in improving industry-led protections, and any specific proposals on increasing statutory protections for consumers.
The government will launch a Video Games Research Framework to support better research, enabled by improved access to data, on the positive and negative impacts of video games. This would aim to support policymakers, the games industry, and players on future work to maximise the positive impacts of games, and to reduce the risk of negative impacts, including harms. The government says that it will provide an update on the output of the technical working group and progress made to strengthen industry-led measures, by the first quarter of 2023.
