Australian parliamentary committee finds “loot boxes psychologically akin to gambling”

There have been rumblings amongst Australian gambling officials since last year that suggest that Australia may soon consider loot boxes in video games to count as gambling. Last July, The Environment and Communications Committee started looking into instances of loot boxes in video games, in order to assess the possible similarities between loot boxes and gambling. While the study’s purpose was not to determine if loot boxes constitute gambling within Australian law, its findings definitely mirror the results of similar studies undertaken by countries who later went on to declare luck-based microtransactions to be gambling, such as the Netherlands and Belgium. The full public document can be found in this pdf.

“+ Our large-scale study (n=7,422) found important links between loot box spending and problem gambling. The more severe gamers’ problem gambling was, the more likely they were to spend large amounts of money on loot boxes.

+ These results strongly support claims that loot boxes are psychologically akin to gambling.

+ These results also suggest that there is a serious risk for loot boxes to cause gambling-related harm. More specifically, they suggest that either:

– Loot boxes act as a gateway to problem gambling amongst gamers.

– Loot boxes provide games companies with an unregulated way of exploiting gambling disorders amongst their customers.

+ Given the relationship between loot box use and problem gambling outlined above, we recommend that:

– Games containing loot boxes carry parental advisories.

– Games containing loot boxes carry descriptors that indicate the presence of in-game gambling content.

– Serious consideration is given to restricting games that contain loot boxes to players of legal gambling age.”

In addition, the report doesn’t seem to be buying the old industry excuse that loot boxes are more comparable to trading cards than gambling. The report states:

“Spending large amounts of money on loot boxes was associated with problematic levels of spending on other forms of gambling. This is what one would expect if loot boxes psychologically constituted a form of gambling. It is not what one would expect if loot boxes were, instead, psychologically comparable to baseball cards.”

Historically, Australia’s 2001 Interactive Gambling Act hasn’t applied to micro-transactions in video games because the law refers mainly to games that are played with the intent of winning money that can be “cashed out”.  Video games have avoided falling under this law by keeping their rewards in-game. However, the distinction has gotten murkier since the rise in betting sites that allow users to bet and swap these in-game items for a cash trade out.

We might hear more from the committee, as the end date for the report has been extended to October 17. Though it’s unlikely that the report will lead to the regulation or ban of the loot box right away, it’s a necessary stepping stone. It’s more bad news for publishers such as EA though, who might really need to reconsider their stance on luck-based micro-transactions if they want their games to continue to be sold in the Australian market.