​UK Gambling Commission Reiterates That Loot Boxes Are Not Gambling

With the rise of loot boxes now getting the attention of governments, official bodies are investigating concerns that these mechanics should be regulated under gambling laws. However, speaking to MPs at the Department for Culture, Media and Sport select committee, Gambling Commission chief executive Neil McCarthur has said that loot boxes are not gambling.

McCarthur told the select committee that there were “significant concerns” around children playing games with loot boxes, but that the mechanics don’t qualify as gambling under current legislation. “There are other examples of things that look and feel like gambling that legislation tells you are not,” McCarthur explained, using the example of prize competitions that are a lot like a lottery but, because “they have free play or free entry they are not gambling.”

Counter-Strike's weapon skins are worth a lot of money
Counter-Strike’s weapon skins are worth a lot of money

One reason that it’s been argued that loot boxes are gambling is because you can sell on the contents for real money. So, you are buying loot boxes with the hope of acquiring a high value item you can sell on, making a tidy sum for yourself. It’s more complex than a scratch card, but the result is much the same. However, while you can sell on the contents of a Fifa player pack or a Counter-Strike: Global Offensive weapon crate, the market where you sell the item on isn’t run by the game publishers.

One key aspect of loot boxes that stops them being gambling under UK legislation is that the game developers and publishers aren’t operating the secondary market. Which makes the loot box system more like buying a pack of Magic: The Gathering cards and selling the best cards on Ebay.

“There is unquestionably a demand for a secondary market,” Gambling Commission programme director Brad Enright told the BBC and the group has raised its concerns with EA and Valve. Enright says that Valve has shut down skin betting sites in response to pressure from the Gambling Commission. Though, he also said that the Commission “think Valve in the US should do more”.

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Written by Alan Smith

Alan Smith

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