MPs recommend outlawing ‘loot boxes’ from gaming apps 

A new report from MPs has made a series of recommendations to protect children from ‘immersive and addictive’ technologies.

So-called ‘loot boxes’ would be regulated under the Gambling Act and banned from sale to children, according to measures put forward by the Digital, Culture, Media and Sport Committee.

In a wide-ranging inquiry, MPs called for games companies to accept greater responsibility for the behaviours that their products exhibit among young users. The committee heard evidence from members of the public that young people have become hooked on in-game purchasing facilities, with one getting indebted to the sum of £50,000; another confirmed they had spent around £1,000-a-year on such features.

One gaming company – Jagex – confirmed to the committee that it was possible for users to spend up to £5,000-a-month in its game, RuneScape.

Loot box mechanics were found to be integral to major games companies’ revenues, with further evidence that they facilitated profits from problem gamblers. The Report found current gambling legislation that excludes loot boxes because they do not meet the regulatory definition failed to adequately reflect people’s real-world experiences of spending in games. Loot boxes that can be bought with real-world money and do not reveal their contents in advance should be considered games of chance played for money’s worth and regulated by the Gambling Act. 

Evidence from gamers highlighted the loot box mechanics in Electronic Arts’s FIFA series with one gamer disclosing spending of up to £,1000-a-year.

The Report calls for loot boxes that contain the element of chance not to be sold to children playing games and instead be earned through in-game credits. In the absence of research on potential harms caused by exposing children to gambling, it calls for the ‘precautionary principle’ to apply. In addition, better labelling should ensure that games containing loot boxes carry parental advisories or descriptors outlining that they feature gambling content.

The immersive and addictive technologies inquiry investigated how games companies operate across a range of social media platforms and other technologies, generating vast amounts of user data and operating business models that maximise player engagement in a lucrative and growing global industry.

-Sale of loot boxes to children should be banned;
-Government should regulate ‘loot boxes’ under the Gambling Act;
-Games industry must face up to responsibilities to protect players from potential harms;
-Industry levy to support independent research on long-term effects of gaming;
-Serious concern at lack of effective system to keep children off age-restricted platforms and games.

MPs on the Committee have previously called for a new ‘Online Harms regulator’ to hold social media platforms accountable for content or activity that harms individual users. They say the new regulator should also be empowered to gather data and take action regarding addictive games design from companies and behaviour from consumers.

E-sports, competitive games played to an online audience, should adopt and enforce the same duty of care practices enshrined in physical sports. Finally, the MPs say social media platforms must have clear procedures to take down misleading ‘deep-fake’ videos – an obligation they want to be enforced by a new Online Harms regulator.

In a first for Parliament, representatives of major games including Fortnite maker Epic Games and social media platforms Snapchat and Instagram gave evidence on the design of their games and platforms.

DCMS Committee Chair Damian Collins MP said: “Social media platforms and online games makers are locked in a relentless battle to capture ever more of people’s attention, time and money. Their business models are built on this, but it’s time for them to be more responsible in dealing with the harms these technologies can cause for some users.

“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.
 
“Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products.

“Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It’s time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify vulnerable gamers.

“Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults.

“Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi.”