Casino Watch Focus has reported on the discovery and evolution of gambling-esque loot boxes in video games and the legislative response to such predatory practices. Loot boxes are a type of micro-transaction where a video game player spends real money to open a box or chest in a video game, and hopefully win a valuable prize. If this sounds an awful lot like slot machines, then you’re thinking the same as countless fans, journalists and now legislators that are worried about he addictive and predatory nature of such a mechanic, especially when kids freely play these games. Hawaii legislator Chris Lee has lead the charge to hold the video game accountable and many others have taken note. As promised, Hawaii has now released 4 new bills that seek to regulate these predatory micro-transactions. An online source reports:
Four new bills have been introduced in the past month that target the sale of games that sell loot boxes for real money. Two of the bills would prohibit developers from selling games with randomized loot box reward systems to anyone under the age of 21. The other two would require developers to label games that use randomized loot box systems /and/ to disclose loot box drop rates.
Developers would be forced to label games should they include “in-game purchases and gambling-like mechanisms which may be harmful or addictive,” according to the bill. A game purchased online would have to include this information on the game’s art.
“Whistle-blowers have revealed that psychologists are employed to create these mechanisms,” Lee told the Hawaii Tribune. “If enough of the market reacts, the industry would have to respond and change its practices.” Lee said that more than half of the states in the United States are looking intro legislation regarding the sale of loot boxes in video games. Loot box regulation has already begun overseas as well. In 2016, China passed legislation that requires all developers to publish its loot box odds. Likewise, the Belgium Gaming Commission has deemed loot boxes “dangerous.”
Lee has been pushing the industry to impose its own common sense legislation. The ESRB is the rating system used within the industry and as of now, they are unwilling to view loot boxes as gambling and thus, they haven’t been willing to take the matter seriously or regulate from within. During a normal public meeting about the bills, lobbyist from the Entertainment Software Association, the industries trade group and regulators of the ESRB rating system, flew out to participate in the Q&A. They were unable to answer, justify or address some of the most basic concerns raised by Lee. It was objectively a very terrible showing for the industry. You can find the full video and update on Lee’s direct YouTube channel HERE (Loot box update begins at 2:37 and the questioning begins at 7:00).
Moreover, in addition to large number of states that are looking into similar legislation, these predatory gambling practices have now caught the attention of the US Senate, specifically Senator Maggie Hassan. She has questioned the FTC and wrote a letter directly to the ESRB. Forbes reports:
This week, Hassan asked four FTC nominees the question: “That children being addicted to gaming — and activities like loot boxes that might make them more susceptible to addiction — is a problem that merits attention?” To which all four responded yes, it was something they would look into. But past that, Hassan wrote a lengthy letter to Patricia Vance, president of the ESRB citing that the issue of loot boxes was brought to her attention by a constituent.
“While there is robust debate over whether loot boxes should be considered gambling, the fact that they are both expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny,” Hassan’s letter says. “At minimum, the rating system should denote when loot boxes are utilized in physical copies of electronic games.”
The fact that Hassan is a US Senator, not a state senator, is important, as this could end up leading to her proposing federal legislation about this issue, rather than individual states doing it.
The powerful letter can be read in its entirety at Forbes HERE
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