GAMBLING VS. GAMING: A COMMENTARY ON THE ROLE OF REGULATORY, INDUSTRY, AND COMMUNITY STAKEHOLDERS IN THE LOOT BOX DEBATE
2018; Mary Ann Liebert, Inc.; Volume: 22; Issue: 4 Linguagem: Inglês
10.1089/glr2.2018.2243
ISSN2572-5327
Autores Tópico(s)Gambling Behavior and Treatments
ResumoGaming Law ReviewVol. 22, No. 4 CommentariesFree AccessGAMBLING VS. GAMING: A COMMENTARY ON THE ROLE OF REGULATORY, INDUSTRY, AND COMMUNITY STAKEHOLDERS IN THE LOOT BOX DEBATEBrett AbarbanelBrett AbarbanelPublished Online:1 May 2018https://doi.org/10.1089/glr2.2018.2243AboutSectionsPDF/EPUB Permissions & CitationsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail The discussion on loot boxes has tempered somewhat from the height of the fever pitch that followed the release of Electronic Arts' (EA) Star Wars Battlefront 2, but the fallout is far from over. The fervor erupted over the use of loot boxes—an in‐game "box" that contains an unknown selection of virtual items—in video games. These virtual items can take on different forms, such as weapons, armor, in‐game abilities or skills, and aesthetic items (commonly referred to as skins). These items range in value. Some may be new items that allow one to progress in game or are highly sought after, while others are common and undesirable. In some cases, the virtual items are tradable, and some such trades can be facilitated by third‐party sites via access to the game developer's open application programming interface (API), which has opened up a market for exchanging items for cash value.A fundamental question rising from the debate asks: are loot boxes gambling? Many stakeholders have voiced their opinion on the issue, and legislators, gambling regulators, and their governments are weighing in with assessments and formal decisions. Chiefly among these calls have been demands to legally classify loot boxes as gambling and regulate them as such.The world of gambling, particularly gambling regulation, has found itself in the gaming spotlight. The convergence of gambling and gaming has been a topic of discussion for several years now, as video games have included gambling mechanics in game and gambling games have incorporated more gaming mechanics. Each regulatory jurisdiction—whether it be France, South Africa, Japan, any one of the United States, and nearly everywhere in between—has its own unique relationship with gambling and regulation. Each regulatory agency is charged with establishing rules that enact public policy goals set by legislative decree.1 A successful regulatory policy will control risk while encouraging positive social behavior, with regular reevaluation to ensure policies remain relevant in the face of changing environments and technologies.2 At the same time, the regulatory agency must understand the scope of their mandate and specific duties, which typically include protections for public health issues.3In the case of the loot box game mechanic, regulatory agencies are assessing this in‐game phenomenon within the scope of current gambling law/regulation. Typically, the three elements of determining gambling classification are consideration, chance, and prize.4Consideration refers to participants' risking something of value on the activity, chance describes the element of uncertainty in the activity, and prize is the potential reward or outcome. Each element is weighed differently, depending on the jurisdiction. The proportion of chance vs. skill varies in its impact on classification under different laws, and some jurisdictions give very little weight (or none at all) to the consideration or prize elements.Decisions are expected to be as varied as the individual approaches to regulation. In Belgium, for example, loot boxes are likely to be classified as gambling. Under Belgian law, all games of chance are considered gambling and are prohibited unless licensed or otherwise permitted by the Kansspelcommissie.5 Great Britain,6 Denmark,7 and New Zealand8 have all issued statements that loot boxes are not considered gambling. If the items that come from loot boxes can be transferred to economic value, then they would typically fall under the gambling definition.In some cases, the virtual items that come from loot boxes, or skins, can be exchanged for cash value via a third‐party payment provider.9 Skins from Valve Corporation's Counter‐Strike: Global Offensive can be traded and sold via their Steam Subscription Marketplace, whose open API allows third‐party sites to link to the marketplace. Per the terms of Valve's Steam Subscriber Agreement,10 individual account funds ("Steam Wallet Funds") do not have a cash value. This does not always mirror the practical application of tradable items, however, as some of these third‐party sites facilitate transactions between consumers, exchanging skins for cash.The British Gambling Commission's statement noted that loot boxes are not "gambling" under the British legal mandate11 unless the prize gained has money's worth, and they acknowledge that some loot boxes do, indeed, fit this description. While this specific delineation may not be what the gaming community wants to hear—"It's not my job" is a frustrating customer service response, no matter the source—to suggest that the Gambling Commission's statement is wrong would be highly remiss; the Commission is accurately doing its job in interpreting the set regulation within the scope of the law, rather than stepping outside the bounds of their scope of responsibility to become a moral arbiter on a social issue. The Gambling Commission in Britain recognized that consumers, and in particular, parents of gamers, do not care about the intricacies of legal frameworks, and simply want a response to their concerns.12The case of loot boxes has the potential to follow similar activities that fit the social sciences definition of gambling, but not the legal definition. If we consider a social sciences definition of gambling as risking something of value on an event whose outcome is uncertain, many activities suddenly fall into the classification. Buying and opening a pack of baseball, Pokemon, or Magic: The Gathering cards, for example, are all gambling activities under this definition. Kinder Surprise Eggs, in which an unknown toy is hidden inside a chocolate egg, could fit the definition. Starting a business, too, is risking something of value on an uncertain outcome. Perhaps the best‐known instance of this false dichotomy is stock market trading. While this is quite evidently gambling by social definitions and even by some legal definitions—one is risking a monetary investment in an unknown outcome—these trades, and operation thereof, nearly always fall under the scope of financial, not gambling, regulatory authorities.While many gambling commissions and gaming organizations (e.g., Entertainment Software Rating Board [ESRB]) have issued formal statements that loot boxes do not fit their definitions of gambling,13 it does not mean that all channels are exhausted. This convergence of gambling and gaming is a new frontier in regulation, no matter the authority involved, be it government, industry, or individuals. Game developers themselves hold a tremendous amount of power and responsibility here to self‐regulate and preempt major intervention from gambling authorities.14 Consumers, and parents of those consumers, hold equally valuable roles in this process, contributing toward best practices in responsible gaming and holding game developers, gambling entities, regulators, and themselves accountable.It is understandable that game developers may fear any classification as gambling. And while classification as gambling does not necessarily place a black mark on a game developer, it does come with gambling regulation compliance needs that have as yet not been tested in video gaming. The process for gambling licensure, for example, is significantly more extensive than the submission for ESRB ratings, and games testing of jurisdictional requirements for game mechanics (e.g., mathematics of pay tables) is a requirement that exists for gambling games. These are intimidating, costly requirements for operations unused to the gambling sphere.And should one game component be classified as gambling, it is not an unfounded fear that other game components might (immediately or eventually) fall under similar classification. A broad swath of video games and elements therein have the potential to be classified as gambling if legislation or regulation is not properly defined. If the purchase of a video game, for example, is deemed to fit the consideration requirement of gambling, chance elements within the game then follow. Consider a massively multiplayer online role‐playing game (MMORPG) with randomly spawning bosses throughout the virtual world, who drop rare loot items upon defeating the boss. A player may never see a single boss like this in their game play, or they may find many. The loot table, which defines the probability distribution of the select items that the boss may drop when it is killed in game, is by definition an explanation of the chance element. And the loot that drops may be an item that cannot be acquired in‐game by any other means. Is this gambling, or not gambling? It doesn't look or feel like a loot box, or even a slot machine, but it contains the elements that define gambling. If defined as gambling under the law, this content, too, would need to be submitted to a gambling commission for licensure.Use of microtransactions, including loot boxes, in games is highly profitable for game companies, likely explaining why the practice continues despite the major public controversy and regulatory risk. Take‐Two Interactive's third‐quarter results, for example, showed record spend on microtransactions in their biggest games,15 and their chief executive officer indicated that their aim was to have microtransactions in all game titles.16The landscape itself is not solely a legal one, however, and social implications of gambling‐like elements in games are present. While there is still a paucity of research on the impacts of exposure to gambling and gambling‐like elements on youth, there is an established record of migration from social casino games to gambling.17 And early gambling behavior, especially online, is considered a risk‐factor for gambling problems later in life.18 With this in mind, an empirical examination of the true potential harm of loot boxes is warranted to ensure sufficient, relevant protections are designed. The rapid evolution of technology vastly outpaces research and empirical evidence of its impacts, however, and as Gainsbury notes, "[This gap] creates tension between rushing to implement protectionist policies based on limited data and avoidance of issues through outdated policies, which may fail to offer adequate protections."19In addition, the potential for unintended consequences in regulation exists when our desire to establish measures designed to protect vulnerable populations (e.g., children) end up overly restricting adults able to make clear, informed choices. The need for dynamic regulation is key here, and self‐regulation—whether that be via a newly established organization, or perhaps extending the scope of responsibility for existing organizations—can go a long way in demonstrating the gaming industry's acknowledgement of the potential harm from loot boxes. Without these efforts, major segments of the gaming industry are highly likely to find themselves facing the prospect of gambling licensure.Fitting loot boxes into extant gambling regulation may be the opening of Pandora's box, but it does not have to be. There have been many accusations of malice when game developer behavior can be adequately explained by ignorance of what it means to be a gambling operation. Many are finding that there is a line at which their creation becomes a gambling game, and there has been significant—and sometimes possibly willful—naiveté. Rather than slap back in anger, patience is warranted while the gaming and gambling scene sorts out the case of loot boxes. Research, legislation, and regulation often cannot keep up with the speed of technological change, and the case of gambling is no different. The emphasis for all parties, be they government, industry, or consumer, should be on the need for self‐education and due diligence in understanding the complexity and nuance of games and gambling.Author Disclosure StatementNo funding was received in relation to this article.Dr. Abarbanel has received funding (2013–2018) from the Manitoba Gambling Research Program, GP Consulting, U.S.‐Japan Business Council, Wynn Las Vegas, Victoria Responsible Gambling Foundation, Bermuda Casino Gambling Commission, the State of Nevada, Canadian Partnership for Responsible Gambling, iDevelopment and Economic Association, Majestic Star Casinos, Oakland Raiders/National Football League, MGM Resorts International, and Caesars Entertainment. She has received reimbursement for travel from British Columbia Lottery Corporation, International Association of Gaming Advisors, GambleAware, Las Vegas Convention and Visitors Authority, Ultimate Media Ventures, Canadian Partnership for Responsible Gambling, and IGT Latin America. She is a member of the Singapore National Council on Problem Gambling International Advisory Panel.AcknowledgmentsThe author would like to thank Dr. Kahlil Philander, Dr. Jonathan Feinberg, Sara Abarbanel, and Jared Okun for their invaluable feedback on this manuscript.1 Kevin Mullally and Stephen Martino, Public Policy Implementation and Regulatory Practice, inRegulating Land‐Based Casinos: Policies, Procedures, and Economics (Anthony Cabot and Ngai Pindell eds., 2014).2 Id.3 Anthony Cabot, Public Policy and Policy Goals, inRegulating Land‐Based Casinos: Policies, Procedures, and Economics (Anthony Cabot and Ngai Pindell eds., 2014).4 Anthony Cabot et al., Economic Value, Equal Dignity and the Future of Sweepstakes, 1 UNLV GamingL. J. 1 (2010).5 Kansspelwet [Gaming Act] of 7 May 1999, Belgisch Staatsblad [B.S.] [Official Gazette of Belgium], May 7, 1999, 2d ed., https://www.gamingcommission.be/opencms/opencms/jhksweb_en/law/law/ Belgian Federal Parliament, Gaming and Betting Act of 7 May 1999, 1999010222 (1999), available athttps://www.gamingcommission.be/opencms/opencms/jhksweb_en/law/law/index.html.6 See Loot Boxes Within Video Games, Gambling Commission (Nov. 24, 2017), http://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2017/Loot-boxes-within-video-games.aspx.7 See Statement About Loot Boxes/Loot Crates, Spillemyndigheden (Nov. 29, 2017), https://spillemyndigheden.dk/en/news/statement-about-loot-boxes-loot-crates.8 See Katherine Cross, New Zealand Says Lootboxes "Do Not Meet the Legal Definition for Gambling," Gamasutra (Dec. 11, 2017), https://www.gamasutra.com/view/news/311463/New_Zealand_says_lootboxes_do_not_meet_the_legal_definition_for_gambling.php.9 See generallyWill Green, Skins in the Game: The Size of Esports Skin Betting in 2016, Its Convoluted Closure, and How It Could Shape the Future of Esports Wagering (2016), http://www.esportsbettingreport.com/sites/skin/.10 Steam Subscriber Agreement § 3(C), http://store.steampowered.com/subscriber_agreement/.11 See Gambling Act, c. 19 § 6(5)(a) (Eng.) (2005), http://www.legislation.gov.uk/ukpga/2005/19/contents.12 See Loot boxes Within Video Games, supra note 6.13 Jason Schreier, ESRB Says It Doesn't See "LootBboxes" as Gambling, Kotaku (Oct. 11, 2017), https://kotaku.com/esrb-says-it-doesnt-see-loot-boxes-as-gambling-1819363091.14 New Hampshire Senator Maggie Hassan issued a letter to the Entertainment Software Rating Board (ESRB) in February 2018, urging them to recognize the potential harms of loot boxes and include them as part of the game rating process. See Zaid Jilani, In a First, U.S. Senator Demands Government Oversight of Predatory "Loot Boxes" in Video Games, The Intercept (Feb. 23, 2018), https://theintercept.com/2018/02/23/in-a-first-u-s-senator-demands-government-oversight-of-predatory-loot-boxes-in-video-games/.15 Take‐Two Interactive Software Inc., Take‐Two Interactive Software Inc. Reports Results for Fiscal Third Quarter 2018, Business Wire (Feb. 7, 2018), https://www.businesswire.com/news/home/20180207006003/en/.16 Q2 2018 Take‐Two Interactive Software, Inc. Earnings Conference Call, Take‐Two Interactive Software Inc. (Nov. 7, 2017), https://edge.media-server.com/m6/p/52ozdpst.17 See Sally M. Gainsbury et al., Migration from Social Casino Games to Gambling: Motivations and Characteristics of Gamers Who Gamble, 63 Computers in Human Behav. 59 (Oct. 2016), https://doi.org/10.1016/j.chb.2016.05.021.18 See generally Jeffrey Derevensky et al., Youth Gambling Problems: A Need for Responsible Social Policy, inGambling Problems in Youth: Theoretical and Applied Perspectives (Jeffrey Derevensky and Rina Gupta eds., 2004); Jeffrey Derevensky and Sally Gainsbury, Social Casino Gaming and Adolescents: Should We Be Concerned and Is Regulation in Sight?, 44 Int'l J. L. & Psychiatry 1 (2016); Rina Gupta et al., Problem Gambling in Adolescents: An Examination of the Pathways Model, 29 J. Gambling Stud. 575 (2013); Sally M. Gainsbury et al., How Risky Is Internet Gambling? A Comparison of Subgroups of Internet Gamblers Based on Problem Gambling Status, 17 New Media & Soc'y 861 (2015).19 Sally Gainsbury, Gambling and Gaming Are Converging: "Won't Someone Think of the Children!"?, The Brief Addiction Science Information Source (BASIS), (Feb. 13. 2017), http://www.basisonline.org/2017/02/gambling-and-gaming-are-converging-wont-someone-think-of-the-children-.html.FiguresReferencesRelatedDetailsCited byGaming disorder: current research directionsCurrent Opinion in Behavioral Sciences, Vol. 47Y ve Z Kuşağına Ait Oyuncuların Dijital Oyunlardaki Şans Paketlerine İlişkin (Loot box) Değerlendirmelerini Tespit Etmeye Yönelik Bir Araştırma: FIFA Ultimate Team Örneği13 September 2022 | TRT AkademiRocking the Boat: Loot Boxes in Online Digital Games, the Regulatory Challenge, and the EU's Unfair Commercial Practices Directive21 July 2022 | Journal of Consumer Policy, Vol. 45, No. 3Blind box over-engagement and suicide risk among adolescents and young adults: Results of a large-scale surveyeClinicalMedicine, Vol. 51Response to the Regulation of Video Games under the Youth Media Protection Act: A Public Health Perspective29 July 2022 | International Journal of Environmental Research and Public Health, Vol. 19, No. 15Gaming-Gambling Convergence: Trends, Emerging Risks, and Legislative Responses20 April 2021 | International Journal of Mental Health and Addiction, Vol. 20, No. 4Exploring the association between loot boxes and problem gambling: Are video gamers referring to loot boxes when they complete gambling screening tools?Addictive Behaviors, Vol. 131Gamblification: A definition17 March 2022 | New Media & Society, Vol. 19Microtransaction spending and problematic gambling of UK university call of duty gamers3 March 2022 | International Gambling Studies, Vol. 17A scoping review of experimental manipulations examining the impact of monetary format on gambling behaviour28 February 2022 | International Gambling Studies, Vol. 22Behavioral Addictions: Excessive Gambling and Gaming6 October 2022The Talk of the Town: Community Perspectives on Loot Boxes10 March 2022A Governmentality of Online Gambling: Quebec's Contested Internet Gambling Website Blocking Provisions4 June 2021 | Canadian Journal of Law and Society / Revue Canadienne Droit et Société, Vol. 36, No. 3Between two worlds: Exploring esports betting in relation to problem gambling, gaming, and mental health problemsJournal of Behavioral Addictions, Vol. 10, No. 3Clue mining based on the online gambling intelligent robot customer service platform9 September 2021 | International Journal of System Assurance Engineering and Management, Vol. 15Secondary analysis of loot box data: Are high-spending "whales" wealthy gamers or problem gamblers?Addictive Behaviors, Vol. 117Risk Factors of Problem Gaming and Gambling in US Emerging Adult Non-Students: The Role of Loot Boxes, Microtransactions, and Risk-Taking21 August 2020 | Issues in Mental Health Nursing, Vol. 41, No. 12Loot boxes are gambling-like elements in video games with harmful potential: Results from a large-scale population surveyTechnology in Society, Vol. 63Gambling engagement mechanisms in Twitch live streaming18 May 2020 | International Gambling Studies, Vol. 20, No. 3Loot box engagement and problem gambling among adolescent gamers: Findings from a national surveyAddictive Behaviors, Vol. 103What predicts esports betting? A study on consumption of video games, esports, gambling and demographic factors3 March 2020 | New Media & Society, Vol. 7Fortnite microtransaction spending was associated with peers' purchasing behaviors but not gaming disorder symptomsAddictive BehaviorsLoot boxes are again linked to problem gambling: Results of a replication study7 March 2019 | PLOS ONE, Vol. 14, No. 3Video Game Monetization (e.g., 'Loot Boxes'): a Blueprint for Practical Social Responsibility Measures17 October 2018 | International Journal of Mental Health and Addiction, Vol. 17, No. 1 Volume 22Issue 4May 2018 InformationCopyright 2018, Mary Ann Liebert, Inc.To cite this article:Brett Abarbanel.GAMBLING VS. GAMING: A COMMENTARY ON THE ROLE OF REGULATORY, INDUSTRY, AND COMMUNITY STAKEHOLDERS IN THE LOOT BOX DEBATE.Gaming Law Review.May 2018.231-234.http://doi.org/10.1089/glr2.2018.2243Published in Volume: 22 Issue 4: May 1, 2018Keywordsgamblinggamingesportsloot boxloot cratemicrotransactionPDF download
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