Politics & Government

Are video-game loot boxes a form of gambling that targets children? Washington aims to find out

A bill introduced in the Washington Legislature aims to determine whether video-game loot boxes are a form of gambling that targets children.
A bill introduced in the Washington Legislature aims to determine whether video-game loot boxes are a form of gambling that targets children. Getty Images

Some say they look, sound and act like a casino game. But are loot boxes — a video game feature requiring real money for the chance at in-game items — really gambling?

A bill introduced by state Sen. Kevin Ranker, D-Orcas Island, this month in the Legislature aims to find out just that, asking Washington officials and game developers to determine whether loot boxes — and similar video game mechanics — are a form of gambling that preys on children.

“What the bill says is, ‘Industry, state: sit down to figure out the best way to regulate this,’” Ranker said. “It is unacceptable to be targeting our children with predatory gambling masked in a game with dancing bunnies or something.”

The bill is the latest rumbling in an international movement against what critics call the cross pollination of the gaming and gambling industries.

Belgium’s government recently launched an investigation similar to the one proposed in Washington to determine whether loot boxes are a disguised form of gambling.

A state lawmaker in Hawaii proposed banning the sale of games with loot boxes to people under the age of 21. Chris Lee, a Democrat from the Island State, has likened Star Wars Battlefront II — a video game that formerly used loot boxes — to “a trap.”

“This game is a Star Wars-themed online casino designed to lure kids into spending money,” Lee said in a November speech on his YouTube account.

Electronic Arts, the game developer behind Star Wars Battlefront II, did not respond to a request for comment.

The Washington Gambling Commission is aware of loot boxes but has not formed a position on whether they are gambling, according to a legal associate with the commission.

Several people on the front lines of addiction treatment in Washington say loot boxes blur the line between gaming and gambling in a way children cannot recognize.

Jim Leingang, addiction counselor for the Evergreen Council on Problem Gambling, said “every hand in the room went up” at a recent youth prevention summit when he asked the crowd if they were familiar with loot boxes.

“This is the sort of issue people don’t really know about,” Leingang said. “You don’t realize your kids in trouble until you get a credit card statement.”

Others say the game mechanic plants the seeds for children to become addicted to gambling as well as video games. Video-game addiction is a disorder recognized in a draft of the World Health Organization’s newest disease classification list.

“We know that gambling is a very strong hook for some people, and so is gaming,” said Hilarie Cash, founding member of Restart Life, a rehab facility for internet and gaming addiction in Washington. “When you combine them you ratchet up the chances for addiction.”

Organizations related to the gaming industry have denied loot boxes mirror the gambling mechanics of casino games.

The video game news site Kotaku first reported last November that the Entertainment Software Rating Board, a nonprofit that rates video games for age-appropriateness, did not consider loot boxes as a form of gambling.

“The ESRB does not consider loot boxes to be gambling,” a spokesperson from the board said in an email with the Tacoma News Tribune. “While the digital goods within a box or pack are mostly randomized, the player is always gauranteed to receive in-game content.”

The option to pay real money for clothing, weapons, and other in-game content has existed in video games for years and owes its ubiquity to increased industry competition, according to Jeff Pobst, CEO of Hidden Path Entertainment.

Game developers can now sell directly to players on online marketplaces whereas before they’d have to work through a publisher of sorts. To survive the flood of new competition, developers began making free games with the option to buy in-game content, many of which are found on mobile devices.

These so-called “microtransactions,” Pobst said, provoke the ire of gamers only when they’re included in games which previously did not have them. He pointed to the Star Wars Battlefront series as an example. The game series did not include loot boxes until the most recent title.

“When an existing game changes their monetization, that’s when people feel a promise has been broken,” Pobst said. “No one wants to break a promise. They just want to make something sustainable, and that’s the dilemma.”

Others believe the gaming industry is becoming increasingly reliant on gambling-like mechanics to make money, which, according to Keith Whyte, Executive Director with the National Council on Problem Gambling, could explain the reluctance of companies to recognize loot boxes as a form of gambling.

“They’re ever looking for ways to make these games and they’re becoming more aggressive — and for our concerns — more risky for addiction,” Whyte said.

Whyte said his council believes free-to-play online casino games are an even more malicious example of developers cashing in off the reward system in people’s brains. One study found these games — also known as social casinos — normalize the gambling process for children and may lead to increased risk for addiction later in life.

While social casinos are not mentioned explicitly in Washington’s loot-box bill, they may be included under the text’s vague language, according to the Democrats behind the measure.

Ranker, the sponsor of the current bill, was more forthright: if it looks like gambling he wants it to be regulated like gambling.

Ranker believes the odds for chanced-based purchases should be made public, as Apple has done with some of its mobile apps. Such regulations, the senator said, are necessary to protect those too young to tell the difference between game play and credit-card spending.

“If (parents) realized how predatory these game are then they wouldn’t want them under their Christmas tree, they wouldn’t want them going to their kids,” Ranker said.