DCMS Committee Recommends Banning Loot Box Sales To Children

Regulate video game loot boxes under gambling law and ban them from children, MPs say

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DCMS Committee Recommends Banning Loot Box Sales To Children

DCMS Committee Recommends Banning Loot Box Sales To Children

Loot boxes in video games should be regulated under gambling law and be banned from being sold to children, MPs have argued. The feature appears in some games as packs of virtual objects players can buy using real money, but the contents of a pack are randomized and not known until after purchase, which has led to fears that it could act as a gateway to gambling for young people. It is thought to be an integral money-maker for major games companies, generating billions in revenue.

The British government should regulate loot boxes under gambling law, a parliamentary inquiry has recommended.

The Department for Digital, Culture, Media and Sport’s (DCMS) parliamentary committee makes the recommendations in a report published today following an enquiry into immersive and addictive technologies that saw it take evidence from a number of tech companies including Fortnite maker Epic Games; Facebook-owned Instagram; and Snapchap.

The committee said it found representatives from the games industry to be “wilfully obtuse” in answering questions about typical patterns of play — data the report emphasizes is necessary for proper understanding of how players are engaging with games — as well as calling out some games and social media company representatives for demonstrating “a lack of honesty and transparency”, leading it to question what the companies have to hide.

The industry’s UK trade body responded it would “review these recommendations with utmost seriousness”.

But the committee of MPs had accused some of those who had given evidence of a “lack of honesty and transparency”.

Free video games often encourage players to buy virtual loot boxes, which contain an unspecified amount of items to improve further game-play.

Some games have associated online marketplaces where players can trade or sell these items.

MPs have called on the Government to force gaming firms to disclose aggregated player data with researchers and to help finance an independent research through a levy.

The committee also expressed concern at the rise of deepfake videos, which it warned could be used to influence the outcome of elections.

It urged the Government to include deepfakes as part of the duty of care principles as set out in the online harms white paper.

“Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi,” Mr Collins added.

In response to the report, UK Interactive Entertainment, the country’s gaming trade body, said the industry will continue to put the welfare of players first but admitted “a minority” struggle to find balance.

“We will review these recommendations with utmost seriousness and consult with the industry on how we demonstrate further our commitment to player safety – especially concerning minors and vulnerable people,” said Dr Jo Twist, chief executive of the organisation.

“We are pleased the committee acknowledges that the majority of people play video games in a positive, safe and responsible way.

“The industry does not dispute that, for a minority, finding balance is a problem.

“This is why we are vocal in supporting efforts to increase digital literacy and work with schools and carers on education programmes.”

According to the Committee, if Government determines not to regulate loot boxes under the Act at this time, the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money’s worth.(Previously, the Gambling Commission said current laws don’t see loot boxes as gambling, largely because there’s no real-world cash value to the items received in a loot box.)

Elsewhere, the Committee recommends the Government should advise PEGI, the European video game age ratings organization, to apply the existing ‘gambling’ content labeling, and corresponding age limits, to games containing loot boxes that can be purchased for real world money and do not reveal their contents before purchase. (The current PEGI descriptor for in-game purchases does not specifically differentiate between loot boxes and other items.)

Crucially, the Committee said in the absence of research which proves no harm is being done by exposing children to gambling through the purchasing of loot boxes, a precautionary principle should apply and they are not permitted in games played by children until the evidence proves otherwise.

This brings into question the future of loot boxes in games such as FIFA, which is played by millions of children in the UK and makes billions from the sale of a virtual currency which can be used to buy packs of Ultimate Team cards.