The UK Gambling Commission has revealed that it does not consider loot boxes and skins to be gambling.
This is because UK law defines gambling as playing for the chance to win something that has a monetary value, meaning something that can be resold. The contents of loot boxes and skins cannot be monetised which makes loot boxes and skins hard to define and regular under current UK law.
Speaking in front of the Department for Culture, Media and Sport select committee, Gambling Commission chief executive Neil McCarthur said: “There are other examples of things that look and feel like gambling that legislation tells you are not… but because they have free play or free entry they are not gambling… but they are a lot like a lottery.”
During the inquiry, the Commission highlighted its concern regarding third-party sites that allow for skin gambling, where skins (Cosmetic items) can be traded for cash. The Commission’s programme director Brad Enright stated that game publisher EA has faced a “constant battle” against unauthorised sites selling this content.
Enright then suggested the Commission was prepared to regulate these practices if the current law was changed. He also suggested the Commission take action against game publishers who fail to prevent children from skin gambling and purchasing loot boxes.
Gambling in the UK
The inquiry was held as GTA V Online launched a virtual casino where players can use real money to buy in-game cash and use it to gamble on games such as roulette, slots, blackjack and poker. However, the casino cannot be classified as gambling because all winnings made through the casino are returned as in-game currency and cannot be withdrawn into real funds.
The release of the virtual casino has continued the long-running debate regarding the link between gambling and gaming. Many have criticised that loot boxes and GTA V Online’s casino are worse than real money gambling because children and underage persons can access the games easily.
On the other hand, users wishing to play at an online casino with real money are required by the UK Gambling Commission to verify their casino account immediately to prove they’re over the age of 18. This rule prohibits any children from gambling online and tightens security.
In fact, online gambling with real money can actually be seen as a safer practice than loot boxes and video games because the UK Gambling Commission is responsible for regulating all online casinos in the country.
The organisation requires all online casinos in the UK to hold a valid gambling license, obtained only be meeting the Commission’s rules and regulations. These rules ensure that all online casinos protect customers and treat them fairly.
Since video game publishers and developers cannot be regulated by the Commission in a similar manner, they can continue to implement loot box mechanics into video games, exposing children to the practice and potentially encouraging addictions.