Category Archives: Social Costs

Hawaii Proposes 4 New Anti-Gambling Bills against Video Game Loot Boxes and US Senator Pressures ESRB for Industry Ratings and Regulation

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 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


UPDATE: Washington State joins Hawaii in pushing investigation and legislation around gambling-esque loot boxes in video games.

Casino Watch Focus has reported on the ongoing revelation that video game publishers are pushing what many have called predatory gambling mechanics into recent video games. These loot boxes that are purchased by a gamer dispense in-game items by chance. The players don’t know what items they are actually purchasing and thus they chase after the change of getting the good loot much like a gambler chases after the right combination in a slot machine. What’s worse, publisher EA used these gambling boxes as the primary way to advance through their latest Star Wars video game, Battlefront 2. Naturally, this not only caught the eye of the media, but Disney themselves had to step in. Then governmental agencies started investigating and expressing concern for such psychologically manipulative mechanisms in video games that are available to children. Chris Lee, a Hawaiian legislature pulled no punches when he categorized the game and loot boxes as simply an Star Wars themed online casino aimed at taking kids money. Apple called for companies to disclose the odds of obtaining various loot in any games sold in there app store, but the industry as a whole decided not to regulate loot boxes through the ESRB system. Given the lack of sell governance, yet another state has pushed forward to investigate the issue. The Rolling Stone reports:

As the debate surrounding loot boxes and microtransactions as a form of gambling targeted at children continues, a new bill proposed in Washington is looking to force the game industry to regulate these mechanics, The News Tribune reports.

Washington State Senator Kevin Ranker introduced a bill this month asking state officials, as well as game developers, to determine once and for all if loot boxes and similar mechanics are specifically designed to prey on children.

“What the bill says is, ‘Industry, state: sit down to figure out the best way to regulate this,’” Ranker told the outlet. “It is unacceptable to be targeting our children with predatory gambling masked in a game with dancing bunnies or something.”

Despite the controversies, the game industry seems to be fully-committed to loot boxes and microtransactions. In a recent industry survey, the Game Developer’s Conference found one in 10 developers plan to implement the mechanics in their next game.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

How is the Deadly Mass Shooting in Las Vegas Impacting the Gambling Industry?

Casino Watch Focus has reported all too often on the many crimes that take place at casinos, but none have had the impact of the most recent mass shooting by Steven Paddock from the Mandalay Bay Casino hotel that was the most deadly shooting in modern U.S. history. Nearly 60 people were killed and hundreds injured by a man who was known to the gambling community in Las Vegas and who stayed at the hotel for many days prior to acting out his horrible crime. As one online source outlined, many are questioning if gambling debt lead him to this act, or if his gambling connection should be a focus at all in this mass shooting:

The subject of Paddock’s gambling life is an understandable preoccupation in Las Vegas, in part because, four days after Sunday night’s massacre at an open-air country music festival, authorities have provided no tangible motive for an attack that clearly took a great deal of plotting. That he was staying for free on a comp in the 32nd floor corner suite at Mandalay Bay — the Associated Press first reported that and /New York/ has since confirmed it — only adds to the sense that Paddock used the enormous amount of time he spent in the casino in part to devise his murderous plans. 

The focus on Paddock’s gambling has many in Vegas nervous. The destination has spent the last three decades pushing past its stigmatized image as an underworld haven. Still, even without any evidence to support the notion that Paddock dug himself into any sort of financial distress with his play, there is speculation. CBS News offered this headline on Thursday: “Motive of Las Vegas gunman may lie in his gambling habits.”

Anti-gambling activists, too, embraced this notion. “Whether Paddock’s out-of-control addiction to electronic gambling machines was a central factor in what happened last Sunday will be determined by the FBI investigation,” wrote Les Bernal of Stop Predatory Gambling in a Thursday e-mail blast. “But news coverage and public discussion should not normalize Paddock’s single-minded obsession with gambling machines and the exploitive business practices used by the casinos to keep Paddock gambling continuously.”

Still yet, the entire situation is making everyone look at how much culpability, if any, should exist with the casinos where he gambled, and if anything can or should be done to prevent this in the future. An area of debate has been the fact that Paddock smuggled a small arsenal into the hotel to carry out his murderous plan. So its no surprise that executives were immediately engaged into talks about safety and security policies moving forward. An online publication reports:

The increased security measure has been a topic for discussion among casino operators since Paddock shot concertgoers from the 32nd floor of the Mandalay Bay Resort and Casino, a hotel complex owned by MGM Resorts International. Last year, casino magnate Steve Wynn warned that Las Vegas was a ‘target city’ and disclosed a raft of new security measures, including invisible metal detectors and specially trained guards, designed to prevent a large-scale attack.

Whether those measures would have prevented Sunday’s rampage on the strip in which 58 people were killed is unknown. But the shooting could spur casino operators to think more like Wynn, who had been dismissed as ‘obsessed’ about security before Sunday’s massacre, a rival casino executive said. ‘This could be a turning point,’ the executive said, speaking on the condition of anonymity because security measures are private. ‘Every management team is going to move this up to the top of the list.’

Some are concluding that culpability absolutely exists and the very nature of gambling addicts like Paddock leads to suicidal and other disturbing thoughts. They also suggest that the issue wont truly be examined like is should. An online source explains:

Mandalay Bay’s practices — and indeed the practices of virtually all casinos in an increasingly wealthy and powerful gambling industry — won’t get the scrutiny they deserve.

“No credible, independent person who deals with gambling in the United States and is not being paid by the gambling industry would say Stephen Paddock was a responsible gambler,” Les Bernal told me. He heads a group known as Stop Predatory Gambling.

Last December, the Atlantic did a lengthy story on the industry. Headlined, “How casinos enable gambling addicts,” it told in detail how everything from the way machines are programmed to the perks and the hostesses in casinos are designed to keep people gambling, either with their own money or with a loan from the house. Tarbert told me how this always ends with a period of self-loathing, during which the gambler often feels suicidal. 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

A New form of Gambling in Video Games? What are Loot Boxes and Why is the Gaming Community asking the ESRB to Call this Gambling Practice Out?

Casino Watch Focus has reported on the highly addictive principle of near misses and how this form of gambling forms strong addiction. Typically viewed in the context of regulated slot machines, the player pulls the lever and tries to line enough symbols up in a row to get a prize. Studies have indicated that when someone gets close but doesn’t win, what they call a near miss in the industry, the player will chase the win. A very similar phenomenon is now taking place in video games. The concept in the gaming world is known as a loot box. You pay a price to manufacture to by a box. Random items that a player would want to have in the game, say, a high powered weapon in a shooting game or a piece of defensive armor that models a coveted look and offers superior protection from other players, are generated when the loot box is opened. The key is that the items are random. Most players are looking for top end, often times called legendary gear. The odds of getting them aren’t too high and so a player tends to keep paying more and more money to open more and more loot boxes chasing after the win, or the best items in the game. This practice was identified very early as a form of gambling and a gaming mechanic that uses the same psychological techniques to addict players. The worst part, they are in games marketed toward children and no regulation exists. The highest level, state or federal laws, are completely none existent, so many in the community turned to the ESRB rating system to get these games classified as mature, so that young kids and teens aren’t the target of such gambling practices. As reported by Forbes, ESRB has erred in declining to view loot boxes as gambling, and social awareness is very much need to properly protect players:

Today, the Entertainment Software Rating Board, or ESRB, stated publicly that the hot new monetization trend in video games, loot boxes, don’t qualify as gambling. This is wrong on many levels. While it’s true that, unlike a slot machine, a loot box will always result in some form of a prize, that doesn’t change the fact that the simple act of opening loot boxes is incredibly similar to gambling, and taps into all the same parts of the brain.

“The player is basically working for reward by making a series of responses, but the rewards are delivered unpredictably,” Dr. Luke Clark, director at the Center for Gambling Research at the University of British Columbia, told PC Gamer recently “We know that the dopamine system, which is targeted by drugs of abuse, is also very interested in unpredictable rewards. Dopamine cells are most active when there is maximum uncertainty, and the dopamine system responds more to an uncertain reward than the same reward delivered on a predictable basis.”

Psychologists call this “variable rate reinforcement.” Essentially, the brain kicks into high gear when you’re opening a loot box or pulling the lever on a slot machine or opening a Christmas present because the outcome is uncertain. This is exciting and, for many people, addictive. When it comes to video games, the biggest concern is that children and adolescents will end up forming addictive behaviors early on.

At this point there are two issues/lines of thought at play. One is that the act of buying a loot box and opening it might not be technically gambling because you always get a prize. To this point, its pointed out above that the act of chasing loot boxes is exactly the same as gambling. More importantly though, some games do allow the players to sell or auction off the items received in exchange for real world money, items or game subscription, things with real world value. Eurogamer very specifically outlines the many ways in their recent article when they discuss both the US ESRB and European’s PEGI stance on loot boxes. So in that sense the player is putting real money into the game, opening the box and getting a price based on random chance not skill, and then cashing out the winnings, which is text book gambling. The Second line of thought is that regardless of whether or not this reaches the threashold for actual gambling that requires governmental oversight, it absolutely should get the ESRB’s attention and it should be disclosed to players and parents accordingly. Forbs continues:

“Look if you include these kind of mechanics in these games and you actually allow people to buy these packs for real money, these random blind packs and engage in what is essentially a form of gambling, then you should be jacking the rating of your game up to Mature.

“The fact that [Star Wars] /Battlefront II/ is going to be Teen rated and yet has an in-game real money gambling system blows my mind. How are they possibly getting away with that? Well, the answer is that the US government and legislation hasn’t caught up with it yet.”

OpenCritic co-founder and CEO Matthew Enthoven says that the ESRB’s response “kind of ducked the issue” calling it a semantic argument. “You can call it gambling, you can call it gaming addiction, you can call it whatever you want. The problem is still the same,” he tells me. 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

Update: Florida Voters in Charge Amendment Half Way to Signature Goal and more Backing from Disney

Casino Watch Focus has reported on the ongoing efforts to pass the Voters in Charge Ballot Initiative in Florida. The ballot measure seeks to add a constitutional amendment that requires a final vote of the people prior to any gambling legislation being implemented. So far the petition has passed all the normal steps on its way being on the ballot, including a look by the Supreme Court. Its now being reported that more than half the required signatures have been gathered and Disney is continuing to lend its support to this important ballot measure by contributing another $575 thousand to the efforts. Florida Politics reports:

A proposed constitutional amendment aimed at limiting gambling’s expansion in the state now has more than 600,000 signatures, its backers said Monday. Voters in Charge, the political committee behind the amendment, said it’s “over halfway towards its goal of gathering 1.1 million signatures in order to reach the required number of 766,200 valid petitions to appear on the 2018 General Election ballot.”

“Tens of thousands of Floridians are signing our petition each week and we are on track to accomplish our goal of securing enough signatures for ballot placement by year’s end,” said *John Sowinski*, chairman of Voters in Charge.

“We look forward to being on the 2018 ballot, mounting an aggressive statewide campaign and returning the ultimate authority to approve casino gambling to the people of Florida where it belongs,” Sowinski said in a statement.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

Hurricane Irma Brings out the Worst in Feuding Florida Casinos

Casino Watch Focus has reported on the desire for the gambling industry to push new casinos into Florida and to the benefit of Florida families, most of the efforts to expand gambling, especially through full-scale Vegas-Style casinos, has failed. More recently, reports have surfaced that the industry really views gamblers as prey and they seek out specifically target the must vulnerable. So to some degree, its shouldn’t seem shocking to learn that at a time when communities should come together, like after a major hurricane that rocks an entire state, casinos are instead fighting over who has the right to prey on whom. This unbelievable story centers around one casino actively trying to attract the gamblers from anther casino whose property was damaged as a result of Hurricane Irma, and the classless media fighting and jabs they took at each other. Mardi Gras Casino is closed due to damage and nearby Gulfstream Park Racing is doing everything it can to lay claim to their gamblers. An online source reports:

The two casinos have long been sworn rivals, and are regularly in hot competition for sixth place (out of eight) in Florida’s pari-mutuel market. And while there may be little wrong with healthy competition, Mardi Gras contends its old foe is being exploitive, and has taken things too far.

According to the /Miami Herald/, since the hurricane hit the state on Sep. 10, Gulfstream has been advertising that it will honor loyalty coupons Mardi Gras gives to top players offering free slots play.

“It is sad and pathetic, but not surprising,” Mardi Gras PresidentDan Adkins told the /Herald/. “It’s so sad when you have a community hat’s battered and someone feels like now’s the time to be an opportunist. It’s indicative of their nature and that’s OK with me.”

But Gulfstream Park’s assistant GM Ernie Dellaverson says Adkins is being a bit disingenuous.

“We’re just doing something that’s been done since the beginning of casino marketing,” he says. “If the roles were reversed, I’d expect them to do [the same]. It’s about helping the players, and I haven’t heard a complaint so far.”

As if those actions and comments weren’t shocking and damaging enough, the fighting for Florida families in the wake of a natural disaster got even uglier when the focus was centered on the competition that would follow after the Mardi Gras casino reopened. The sad display continued through the previous source: 

Adkins contends Gulfstream is still sore about being beaten to the sixth spot in casino earnings this year, albeit by a photo finish. Mardi Gras posted $51 million in gross gaming revenue for the first half of 2017, compared to Gulfstream Park’s $50 million.

But ultimately, Adkins says he believes his casino will win in the long run because it has a certain Buddhist spiritual principle of cause and effect on its side. “Here at Mardi Gras we have a little friend named Karma,” he said.“When we rise from the ashes, the grandeur of Mardi Gras, along withKarma, will more than overcome these senseless, childish opportunists.” Although, for such a believer in Karma, he must be asking what he did in a previous life for his casino to get trashed by a hurricane while the other one a mile up the road is doing just fine. “When we reopen,” he said, “we’re going to go back to kicking their ass.” 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION

Online Gambling Industry has Tools to Help Low-Income & Problem Gamblers; Chooses to Target & Prey on them Instead

Casino Watch Focus recently reported that gambling lobbyist finally admitted that casinos prey on customers. In a comment meant to say casinos hope more to prey on tourist, than the local residents, the well-understood relationship between casinos and gamblers was painted in a truthful light. Its clear the industry needs gamblers to make money, but it can be rather upsetting to learn just how they truly view them. Now it appears the online gambling community finds itself in a similar position. A recent study has shown that the online gambling industry has the tools to identify the most vulnerable of gamblers, yet they don’t help them, they pursue them. Consumer Affairs online reports: 

Focusing on practices in the United Kingdom, the Guardian reports that the gambling industry often takes data from third-party companies to serve online gambling ads to low-income consumers or those who have struggled with gambling addiction. One digital marketer detailed his experience of working with one such betting company.

“Third-party data providers allowed us to target their email lists with precision. Lower-income users were among the most successfully targeted segments,” he said. “We could also combine segments, ie we could target users who are on less than £25k a year, own a credit card and have three kids, via these providers.” 

Its upsetting to think the industry has no moral issue with targeting those most vulnerable, but to some its shocking. They promote the idea that gambling is an entertainment provided for people of the community to have a good time. They publicly preach messages of responsible gambling and offer 888 numbers and resources to help those in need, yet privately, they secretly target them as sustainable and easy money making prey. Consumer Affairs continues: 

The practices of these gambling sites bring up some interesting ethical implications when it comes to digital marketing. One could argue that serving a targeted ad to get someone to buy a product they could be interested in is harmless, but can the same be said for serving an ad to someone who is desperate or struggled with gambling in the past? According to some consumers, the answer is a definite no. In the Guardian report, several people say that bookmakers are purposely taking advantage of its targeted audience to promote their business.

“It just reaffirms my belief that the betting industry has no moral compass and are capable of exploiting the vulnerable in order to obtain the last pound out of them,” said Carolyn Harris, Labor MP for Swansea East in the UK. “They are actively seeking out those who can least afford to be involved in gambling. I’m absolutely aghast that they use these hostile techniques in order to suck the life out of people. If we were to offer free cocaine to an addict, they’d find it very difficult to decline. The betting industry knows this and they are by token doing exactly the same thing.” 

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION