UK Gambling Commission tells MPs that it does not and will not oversee in-game microtransactions
Looks like loot boxes are here to stay, and that’s only because of some legal loopholes. A recently published BBC article has confirmed that the United Kingdom’s Gambling Commission recently told MPs in Parliament that in-game purchases in titles like FIFA or Star Wars: Battlefront II are not considered gambling. This is because of one detail in the UK’s gambling laws: loot boxes and other in-game purchases are neither actual money nor have monetary value outside of he games they are purchased from. In other words, since you cannot cash out with loot boxes or microtransactions, it does not count under UK legislation. According to Gambling Commission Chief Executive Neil McCarthur, “There are other examples of things that look and feel like gambling that legislation tells you are not – [such as] some prize competitions but because they have free play or free entry they are not gambling… but they are a lot like a lottery.”
The Commission did note that secondary markets for such purchases do exist, and that there is “significant concern” for children that play these games, as evidenced by stories involving children spending their parents’ entire bank accounts on in-game purchases. However, under current legislation, these purchases are not considered gambling. Brad Enright, the programme director for the Gambling Commission, has said that Electronic Arts, one of the main publishers utilizing in-game microtransactions, faces “a constant battle” regarding third-party websites that buy in-game loot and sells them for either direct monetary gain or virtual in-game currency.
Loot boxes have been criticized by several government bodies, with Belgium famously banning their use in video games back in 2018. The main criticism is that it encourages children to gamble for in-game items using real-world currency, which is illegal in several jurisdictions. This story comes soon after representatives from Electronic Arts were asked to testify before UK parliament in regards to this exact topic.
BBC Article: https://www.bbc.com/news/technology-49074003
Belgium bans loot boxes: https://www.bbc.com/news/technology-43906306
Children spending money on in-game purchases: https://www.bbc.com/news/technology-48908766
EA games testimony: https://www.bbc.com/news/newsbeat-48701962
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