Loot boxes (LBs) are a contemporary monetisation method in video games that relies on randomisation to encourage repeat purchase by player-consumers. The psychology literature has drawn tentative conclusions on LBs’ connection with gambling. Academics and regulators have examined whether or not LBs constitute gambling in law based on two conditions: whether or not they cost real-world money; and whether or not they offer rewards that can be transferred to other players and are consequently worth real-world money. With two exceptions, the existing literature generally accepts that both conditions must be satisfied for a certain implementation of LBs to constitute gambling. By being overly restrictive with their definitions, the existing literature and regulatory opinions have failed to subject different implementations of randomised game mechanics to sufficient scrutiny in order to identify their potential harm, and have therefore failed to ensure that player-consumers, especially children, are appropriately protected. With a UK law perspective, this paper applies Nielsen and Grabarczyk’s Random Reward Mechanism categorisation framework (2019) for differentiating between various implementations of LBs to example games and argues that all implementations of LBs are potentially harmful because they either involve real-world currency and constitute gambling, or normalise gambling behaviours, and should be regulated.
Which Implementations of Loot Boxes Constitute Gambling? A UK Legal Perspective on the Potential Harms of Random Reward Mechanisms
