Video Gaming and Gambling

The introduction of loot boxes which became a prominent feature of video games around 2013, brought an element of gambling with real money into video gaming for the first time. This has caused concern among addiction professionals and some countries are now regulating the use of loot boxes as a result. 

Prevention Not Treatment 

At Castle Craig Hospital we see an increasing number of people who present with gaming or gambling disorders or both. All types of addiction are treatable, and the healthcare sector is highly experienced in providing programmes with good recovery outcomes. However, in the sector of video gaming, we would be glad to see the UK government policy look towards greater regulation, if not outright banning, especially in areas such as loot boxes, where gambling behaviour among our vulnerable younger population is introduced (using real money) into virtual video games. 

Who Is Affected? 

Video games are often played by young people – teens and pre-teens, which makes any type of gambling concerning because habits are easily acquired at a young age and are apt to stick. Advice given to the Gambling Commission in 2021 by the Advisory Board for Safer Gambling (ABSG) makes alarming reading. It states that 

  • in-game purchases are widely available and used by children and young people with few restrictions on spend or exposure 
  • more than 93% of games that feature loot boxes are marked suitable for children 12 years plus.  
  • 23% of 11-to-16-year-olds in England and Scotland had paid to use loot boxes.  
  • According to the gambling commission UK, the global value of loot boxes is estimated to reach $50 billion by 2022.
  • Marketing spending on the speculative value of in-game items would appear to be unchecked 
  • there is a lack of transparency from the gaming industry on revenues from different consumer groups. 

How Loot Boxes  Work 

Loot boxes can be purchased for real money or game currency that has itself been purchased for real money. The unit cost is usually a small amount but varies. The purchaser opens the virtual box and discovers the contents which randomly, maybe ‘rare’ (and thus valuable) or else commonplace and relatively worthless.

Thus, in the video game Fortnite, loot boxes can be bought to give you better heroes or weapons, if you are lucky. Rare items can significantly enhance a gamer’s chances of success. Although such items have no intrinsic value, their rarity makes them desirable, and gamers can sell them to each other outside the game itself, for real money, sometimes at inflated prices. Thus, loot boxes represent a form of lottery where the player buys an item that may or may not turn out to be valuable, dependent upon the laws of chance. 

The Dangers 

Buying a loot box may be a small transaction in itself, but the amounts can easily accumulate into a significant sum. There are reports of card debts reaching many thousands. For example, an eight-year-old and a nine-year-old spent over £600 on an online gaming platform when a parent did not realize that their bank details would be linked to their children’s devices. 

Some games have a facility for disabling loot box applications, but many do not. Perhaps more worryingly, because of the relatively young age of most gamers, loot boxes provide a gateway to gambling activity in general, where many people’s lives are ruined. 

The Royal Society Report 

A 2019 report into the danger of this activity in the UK by The Royal Society ‘Adolescents and Loot Boxes: Links with Problem Gambling and Motivations for Purchase’ raised serious concerns, especially the main conclusion: ‘when video game companies allow adolescents to buy loot boxes, they are potentially exposing them to negative consequences. It may be the case that loot box spending in adolescents causes problem gambling. It may be the case that loot boxes allow game companies to monetize problem gambling in these vulnerable populations for 11-digit annual profits. We believe that both relationships may potentially lead to serious adverse consequences for younger gamers.’ 

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Regulation of Loot Boxes Worldwide 

Belgium banned loot boxes in 2018 and the Dutch and Norwegians are planning to follow suit. Spain published a draft bill in July 2022 to become the first European country to specifically regulate them. This bill proposes five key obligations that might be a guide to other countries wishing to follow Spain’s example (summarised from the bill itself): 

  • Advertising of loot boxes – the encouragement of impulsive, uncontrolled use of loot boxes or glorifying their rewards is not to be allowed. A statement encouraging moderate participation in loot boxes and warning against minors accessing them.  
  • Information and transparency obligations –Users have the right to obtain clear and accurate information on the terms of use and the probability of obtaining a reward when accessing loot boxes as well as the risks involved. information on their actual usage and results to also be available. 
  • Self-exclusion mechanisms –Self-exclusion mechanisms are to be provided allowing users to temporarily suspend the activation of loot boxes for set periods of up to five years. Once set, this period may not be changed. 
  • Expenditure limits – Users have the facility to limit their spending on loot boxes. These limits may not be changed for 3 months after being set. 
  • Loot box sessions – Users to set the maximum time and amount of money they are willing to spend before accessing each loot box session. Users will not be able to access loot boxes unless this session has been set. When setting the session, users will also be able to temporarily restrict their access to a future session. 

Other countries have had different approaches. The United States authorities at first ruled that loot boxes did not contradict their gambling regulations but appear now to be reconsidering their position in the face of increasing protests from campaigners for regulation. Australia on the other hand is also planning to regulate or ban games with loot boxes aimed at minors. 

UK Government Response 

In spite of worrying reports such as those mentioned above, and regulatory plans in many countries, the UK government decided in July 2022 not to take action stating that: ‘evidence has found an association between loot boxes and harms, but we have not found whether there is a causative link.’  Perhaps the decision not to even regulate the industry took into account the report’s finding that: ‘The UK games sector contributed £2.9 billion to the UK economy in 2019, growing hugely from a figure of £400 million in 2010.’  However, it has been announced that warnings about the dangers of loot boxes will henceforth be included in video games. 

Wider Concerns 

Although controversy tends to focus on loot boxes, there is a wider issue concerning all in-game purchases and the need for the right precautions to be taken to ensure that young gamers are protected. For example, video gaming accounts should be set up under proper parental supervision as to time spent playing, control of appropriate content, and proper banking procedures (if any). Steps should also be taken to discourage aimless and repetitive activities where self-control is not encouraged, as this can easily lead to addictive habits.  

Gaming and Gambling Addiction Issues 

A lot of people, especially parents, are concerned and unsure how to approach the issues of video gaming by the young. Fortunately, there is help available from a number of sources accessible via the internet. We would recommend the Children’s Commissioner (a government-funded body), the NSPCC and the UK Safer Internet Centre all of which have helpful websites with advice on how to proceed when setting up video gaming accounts. 

If you are worried about your own or someone else’s gaming or gambling habits and think there is a danger of addiction, we at Castle Craig Hospital are always ready to talk and discuss the best way forward. 

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