The UK Gambling Commission has declared that the loot box mechanic found in numerous video game titles do not fall under the definition of gambling.
On July 22nd, The Digital, Culture, Media and Sport Committee of the British Parliament met with Neil McArthur and Brad Enright, the Chief Executive and Programme Director respectively of the UK Gambling Commission as part of an ongoing debate regarding the legality of loot box mechanics in video games. At the opening of the meeting, McArthur defines gambling as an activity which offers a prize that is “equivalent to money”:
“The Gambling Act tells us that gambling is either gaming, betting, or lotteries, and this is a form of gaming, and then The Gambling Act tells us that gambling means playing a game of chance for a prize, and you can certainly see circumstances where a loot box might fall within that definition. Where things become a bit more complicated are when one looks at the definition of prize, and prize is defined as being money or money’s worth. What that means is that the prize must mean something that is equivalent to money.”
McArthur then acknowledges that if there were a way to resell items on various marketplaces in exchange for money, this would reclassify the loot boxes as gambling:
“Where we draw the line is on the ability to turn that back into money through some mechanism. So, if it’s possible through secondary markets or through markets offered during the game, we can see that that would turn it into gambling in those circumstances.”
Later, Enright speaks specifically to the topic of FIFA 19 character packs, acknowledging that though secondary markets for the game currently exist, efforts by EA to police these marketplaces prevent the classification of these packs as gambling:
“In this scenario, it is our understanding that EA have taken lots of measures to prevent secondary measures to prevent secondary markets, so we know there are ad hoc examples that members may have drawn to their attention, but we’re satisfied there is a sufficient, ongoing, proactive effort by EA to prevent a player being able to take the games and exchange them back into cash, so we don’t think that would meet the definitions of ‘money’s worth’ in this scenario.”
Ultimately, McArthur states that the lack of classification of these mechanics as gambling is similar to the same non-classification given to “prize competitions”:
“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.”