Loot Boxes Are The New Skin Betting Battleground In Esports

Written By Scott Longley on November 20, 2017 - Last Updated on January 22, 2018

[toc]Loot boxes are at the center of the latest skin gambling controversy after first the Belgian Gambling Commission and then its Dutch counterpart went public last week with their concerns over their inclusion in Stars Wars Battlefront II from games giant Electronic Arts.

It is the latest sign of political and regulatory unease over the loot box issue to emerge in recent weeks.

Governments look at loot boxes

In mid-October, members of the UK parliament put pressure on the Conservative government to re-examine the issue of whether loot boxes should be considered gambling.

Late last week, the Belgians’ gambling watchdog issued a statement suggesting that EA and Blizzard might have a case to answer with regard to Star Wars Battlefront II and Overwatch.

“Games of chance cannot be compared to any other kind of economic services,” the Commission said in a statement.

“They may cause people to become addicted and cause them to lose a great deal of money. For this reason, a number of protective measures have been implemented to protect players against these sorts of potential risks.”

This was followed by a statement from the Kansspel Autoriteit in which the Dutch gambling regulator said it was investigating the potential links between loot boxes and gambling and whether they should be a licensed activity.

It added that it was incorporating an analysis of loot boxes in its ongoing assessment of social games.

France also jumped into the issue, as a senator in the country asked gaming regulator ARJEL to look into loot boxes.

Questions to answer on loot boxes

In October, UK Labour MP for Cambridge Daniel Zeichner submitted two questions to the Department for Digital, Culture, Media and Sport addressing the question of whether these in-game random draws should be brought under the remit of existing gambling regulation.

He asked “what steps (the minister) plans to take to help protect vulnerable adults and children from illegal gambling, in-game gambling and loot boxes within computer games.”

The minster with responsibility for the gambling sector, Tracey Crouch, issued a written response to the questions in parliament. She stated the official position that operators required a gambling license is the items that are obtained in a game can subsequently be traded or exchanged outside the game for a monetary value.

She added that protecting children from harm or being exploited remained a core objective of the Commission’s brief and a “priority for the government.” She added, though, that the government was continuing to review the issues being raised and would “monitor development in the market.”

The UK Gambling Commission also told Esports Betting Report that issues regarding loot boxes and skin gambling were covered by the commission’s position paper released in March of this year.

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A Pandora’s box of loot

Research by ESBR shows the degree to which loot boxes – or crates – form a large part of the skin gambling activities of the sites that continue with the practice despite the efforts of game publisher Valve to bring the activity to a halt last year.

The analysis shows that a majority of the skin sites offer crate opening.

“Recently, the relationship between video games and gambling has been a contentious matter with a number of gambling regulators, including Valve/skin betting in the US, and FIFA gamers convicted of Gambling Act offenses in the UK,” said Paul Leyland, a partner with gambling consultancy Regulus Partners.

“It is also a relatively grey area, especially where clear definitions of gambling did not envisage video games in their intent.

“However, with issues relating to the interaction between gaming, gambling and children likely to continue to increase, the need for clear and sensible – ideally cross-jurisdictional – regulatory clarity is becoming both urgent and important.”

EA itself has strenuously denied loot boxes represent gambling. In a statement, the California-based company said that the “crate mechanics” that feature in Star Wars Battlefront II “are not gambling”:

“A player’s ability to succeed in the game is not dependent on purchasing crates. Players can also earn crates through playing the game and not spending any money at all. Once obtained, players are always guaranteed to receive content that can be used in game.”

Still, subsequent to issuing the statement on the issues raised, EA removed micro-transactions from the Battlefront II game, reportedly under pressure from the Stars Wars franchise owner Disney.

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