Industry Reports

Entertainment Software Association Classifies Loot Boxes as Non-Gambling Entities

The recently-released Star Wars Battlefront II action shooter video game has been under serious media fire over the past few days. The highly controversial loot boxes in video games opened Pandora’s Box. A number of concerned gamers have voiced opposition to the presence of loot crates, considered to resemble real-life gambling. Hence, the opposing group condemned the game as not suitable for children as it encourages minors to gamble.

The heated discussion reached the officials’ ears, who launched a loot box investigation to determine if loot boxes feature gambling content. According to the latest news, the Entertainment Software Association (ESA) is the latest to announce its stance on the matter. It stated that the purchase of the loot boxes are not obligatory as the player’s ability to succeed in the game is dependent only on the personal skills.

Hence, the loot boxes cannot be labeled as gambling feature in the video games. In an official statement, ESA explained that the loot boxes are “voluntary features” and they only help the players to successfully advance in the game. ESA does not classify loot boxes as containing gambling content.

Here it is important to note that ESA represents companies such as Electronic Arts, Ubisoft, Capcom, Bandai Namco, Square Enix, Sony, Microsoft, and Nintendo. All these brands are leading video game publishers. ESA also oversees the Entertainment Software Rating Board (ESRB). Only a month ago, the latter announced that loot boxes are actually a form of gambling.

In fact, loot boxes in video games have turned into a moot point for some time. The considerable controversy surrounding these loot boxes comes from the fact that players need to pay real-life money in order to receive access to these loot boxes. By definition, gambling is wagering of money on a particular event with an uncertain outcome. According to many loot boxes opponents, the purchase of loot boxes for real money should be counted as gambling as these involve some element of chance. On the other hand, the purchase of the loot boxes is optional and the game is not dependent on pure luck, but on the players’ skills.

Authorities to Look into the Issue

Preventing underage gambling is a difficult task. There are a number of countries that would seek to ban the provision of video games with loot boxes to children. The Belgian Gaming Commission already announced that such video games should be classified as gambling. The Dutch authorities are also planning to adopt a similar approach to these video games. The list continues with two Hawaii lawmakers, who are currently aiming at introducing a law, that is to ban such games to minors. The Australian government also shared a similar opinion regarding loot boxes in video games, even though the country is yet to officially express its stance on the matter.

The United Kingdom Gambling Commission, on the other hand, officially announced that such games cannot be classified as gambling games under the British laws. Industry insiders consider that the worst of the storm is yet to be unleashed.