Are loot boxes the ignored loophole of unregulated gambling?
The views and opinions expressed here are those of the authors and do not necessarily reflect those of SevenJackpot or its clients.
Are loot boxes gambling or gaming features?
Online gaming is booming in India, so it’s quite possible that you’ve come across loot boxes in a game you’ve recently played.
Loot boxes have become quite the talk of the town globally as people start raising questions about them while government officials struggle to even grasp how they work. (Boomers vs. Gen Z, basically)
And there are absolutely reasons to ask questions. While online casinos are required to be licensed and adhere to a myriad of regulations, games aimed towards minors can currently contain real money gambling aspects while operating more or less completely unregulated.
What the heck are loot boxes anyway?
In short, loot boxes work like this: You purchase an in-game box of objects. The contents of the box are divided into rarity, where the “rarest” object has the lowest chance to appear.
For example, a box can have a 50% chance of giving you a regular object, while only a 1.23% chance of giving you a rare object.
It’s common for loot boxes to be purchased with real money, and it’s often possible to purchase more than one loot box.
As the contents of the box are in-game objects (such as a weapon, costumes, vehicles, etc) they do not have any value outside of the game and cannot be “withdrawn” for a corresponding monetary amount.
Are loot boxes light-gambling?
Buying a box of digital stuff in a game isn’t the same as spinning a slot or playing a hand of blackjack. Right?
Well, I do believe that loot boxes equal gambling.
Just as someone would spin a slot machine over and over again for the chance of hitting a big win, a person can purchase loot box after loot box with the hope of landing that sought-after item.
The main difference is that, while one of these activities is strictly only allowed by those of 18 years of age or older, the other can be done by literally anyone able to press the screen of a smartphone.
And I’ve seen toddlers do that.
So how do we stop this loophole and create a healthy foundation for legal gambling?
There are two things I believe need to happen when it comes to loot box gambling in India; Age Verification and Regulating Online Gaming.
Firstly, governments need to realize that loot boxes share strong similarities to gambling and are currently available to minors all over the country.
While I don’t believe in blanket bans (such as banning games entirely), game providers should be asked to take greater responsibility regarding what services they offer to which players. Aadhar card verification confirming legal age could “unlock” the loot box feature, for example.
Secondly, Indian government officials need to realize that gambling is already a prominent part of people’s lives, where features such as microtransactions and loot boxes are becoming natural parts of people’s lives.
In a time where players easily circumvent bans and restrictions (India is the top country when it comes to VPN usage), creating a safe and responsible space for those who wish to engage in these kinds of activities is crucial.
Do this, and both minors and adults will get better protection from gaming and gambling problems altogether.
Loot box regulation is already happening
Some European countries have already spotted the potential problems that unregulated loot boxes can bring; something Touchstone Partners recently published an article on.
The article expands on the regulations Belgium and Germany have already raised and on the potential amendment of gambling law in the UK to include loot boxes to some extent.
For India to simply ignore the spectrum of gaming and online gambling as being a foundation for healthy regulation and instead believe that blanket bans will solve everything from gambling problems to suicides is not only archaic but might just as well be counter-productive.