Category Archives: Studies/Research

Florida Gambling Hotline Reveals Crisis Experienced by those During the Coronavirus Pandemic

Casino Watch Focus has reported on the ongoing complexities of Covid-19’s impact to the gambling industry.  Beyond the obvious loss of revenue revenue and shut downs, coronavirus’ impact reaches problem gamblers as well. The current climate has created a perfect storm of issues that can drive people to gamble and with the accessibility of online gambling to many, the threat of devastation is very real.  A Florida gambling hotline is helping to make the general public aware of such issues.  An online source explains:

As the COVID-19 pandemic continues to reshape life as we had once known it, closures of traditional brick-and-mortar gambling facilities coupled with social distancing restrictions and requirements have resulted in dramatic shifts in gambling behaviors along with serious negative consequences as reported by contacts to Florida’s 888-ADMIT-IT Problem Gambling HelpLine in March and April.

According to Jennifer Kruse, Executive Director of the Florida Council on Compulsive Gambling (FCCG), “Of particular concern with recent COVID-19 closures and quarantines, is the associated increase inproblem-gambling-related risk factors that occur as a result, such as loneliness, stress, anxiety, depression, and increased use or abuse of substances. The severity of problems reported by individuals contacting the FCCG’s 888-ADMIT-IT HelpLine in March and April illustrate the increased occurrence of these associated risk factors and resulting, exacerbated problem-gambling-related impacts experienced during this time.”

During the pandemic, the economic consequences have hit the country hard, and as result of the government mandated business closures, economic stimulus checks have been sent out to help keep people on their feet.  This situation can be viewed as a windfall of money to some, which has prompted calls for gambling to be shut down during this time.  Many will view the stimulus check as a way to gamble and increase their financial situation.  This big win mentality can trigger many stressors that exacerbate the problems leading to troubling and fatal consequences .  The source continues:

Receiving a stimulus check may also be viewed as an unexpected “big win” for at-risk and problem or recovering gamblers. Money lost gambling can lead to financial difficulties, which can trigger associated stressors that interfere with relationships, mental, and even physical health. These experiences can leave problem gamblers and their loved ones feeling discouraged and hopeless about the future.

“When a problem gambler feels they have lost everything and sees no possibility to gain or recover, suicidal ideation and/or attempts are very real possibilities. This is unfortunately what we have seen with contacts to the 888-ADMIT-IT HelpLine in April, with more than one in five (21%), revealing current or recent suicidal feelings or thoughts due to their gambling problem,” explained Kruse. 

“The share of callers referred to Crisis Lines in April (23%), also rose significantly by more than double, with increased levels of hopelessness and desperation reported, due to gambling-related financial and mental health repercussions brought about by the COVID-19 crisis,” Kruse noted, as cause for additional concern.

Unfortunately, these are not isolated pockets of impact, but rather spread all over the state.  Access to online gambling and the lottery means that closed brick and mortar casinos don’t shield those around the state from gambling’s destructive impact.  Help is available and should be sought out.  The source concludes:

The data reported during the month of April by 888-ADMIT-IT HelpLine contacts, reveals that help seekers this month were from areas all over the state and were primarily from those engaged in the forms of gambling activities still available during quarantine and social distancing restrictions, Online Gambling and the Lottery. This illustrates the effects that gambling addiction can have on any community in the state, and further highlights that those associated impacts will correlate with what gambling options are accessible or available in a particular area.

At a time of uncertainty while the whole world anxiously awaits the return to “normal life,” whatever that may be, reassurance for anyone negatively impacted by a gambling problem that resources are available and accessible through Florida’s 888-ADMIT-IT Problem Gambling HelpLine has never been more important. “Gambling addiction is treatable, and population-specific programs and services for gamblers and their loved ones are accessible any time of the day or night, any day of the year.

The FCCG’s 24-hour confidential and multilingual HelpLine may be reached by calling 888-ADMIT-IT (888-236-4848), texting (321) 978-0555, emailing fccg@gamblinghelp.org, initiating a live chat at gamblinghelp.org, or by reaching out to us on social media platforms, such as Facebook and Twitter,” concluded Kruse.

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States Urged to Temporarily Shut down Lottery Gambling as Coronavirus Economic Stimulus Checks are Sent Out

Casino Watch Focus has reported on the various impacts Covid-19 is having on the gambling industry. All across the country, casinos are being closed, alongside other businesses, as stay at home orders are in place to prevent the spread of coronavirus.  Obviously this has lead to a sharp downturn in the economy and the government has responded with economic stimulus checks.  One group is wisely suggesting to state legislators to temporarily suspend their lotteries to help ensure that money can be spent on essentials, and not sent back to the government through state funded gambling.  An online source reports:

Stop Predatory Gambling, which has been a familiar face at online gambling hearings on Capitol Hill over the years, on Monday sent a letter to governors of states with lotteries. SPG National Director Les Bernal said in his letter that federal relief money sent to families could be used to “subsidize state lotteries.”

Bernal called for lotteries to temporarily shut down by arguing, in part, that people shouldn’t be able to spend their stimulus checks on that form of state-sanctioned gambling. Casinos across the country have closed, sports betting has come to a near standstill, and only four states have some form of legal online casino gaming. That has left the lottery as the only widespread form of gambling still active.

“We are writing to call on you to immediately shut down the marketing and selling of all state lottery gambling games until the financial turmoil caused by the coronavirus has passed,” Bernal said.

Such advocacy is solidly grounded as those with the least economic ability tend to be the ones to spend the most on the lottery.  Les Bernal addresses these issues in a press release that accompanied the letter:

As part of its letter to state officials, Stop Predatory Gambling included its 2020 Briefing on State Lotteries also issued on Monday. The report spotlighted lotteries as one of the root causes why more than 60% of Americans had less than $1000 in savings before the coronavirus pandemic occurred.

The report found “state governments have turned a nation of small earners, who could be small savers, into a nation of habitual gamblers on course to lose more than $1 trillion of wealth to government-sanctioned gambling over the next eight years. At least half of this wealth – $500 billion – will be lost to state lotteries.”

Bernal hopes the lottery shutdown and the new report will bring sorely-needed attention to “America’s most-neglected problem today.”

“Building assets and the accumulating and investing of savings, are the keys to financial peace,” Bernal said.   “A home, a college fund, retirement accounts, a stock portfolio—these assets are the hallmarks of middle and upper class America, and they are all the result of savings. Creating wealth by the accumulation and investment of savings is the direct opposite of what state lotteries represent and encourage.”

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Researchers Want Lawmakers to Treat Loot Boxes as Gambling and Regulate them as Such

Casino Watch Focus has reported on the ongoing issues with gambling-esque look boxes in video games. This mechanic is essentially a slot machine and encourages children to poor more and more money into the game as they chase the warranted prize from a mystery box. This troubling gambling type mechanic has drawn the ire of legislators and regulatory bodies from around the world. Most recently,  the UK started examining loot boxes and micro transactions and had choice words and spirited exchanges with EA, one of the most aggressive loot box pushing publishers and one of the faces of this controversy. These loot boxes really took hold when EA pushed the mechanic in the Disney owned Star Wars franchise video game they licensed known as Battlefield 2 prompting some to call the Star Wars game nothing more than a themed online casino that preys on children.

Since that time, academics and researchers have been examining the links in problem gambling and loot boxes and have broken down how psychologically manipulative these systems are, even when they fall short of some jurisdictions technical definition of gambling. Most recently, researches discussed how this can be a life of death situation among problem gamblers. Now, a formal recommendation is being made that loot boxes be treated as gambling and regulated as such. The Guardian explains:

Video game loot boxes should be regulated as gambling and children barred from purchasing them, a House of Commons committee has advised. The recommendation comes as part of the digital, culture, media and sport (DCMS) committee’s report on immersive and addictive technologies, published on Thursday after months of parliamentary hearings with technology and gaming companies.

While loot boxes involve an element of chance because players do not know what they will get, they are not covered by existing gambling legislation because the items “won” are not considered to have monetary value. But the report heard evidence that loot box winnings can be exchanged for money and that their use by game developers was likely to “facilitate profiting from problem gamblers”.

Researches point to extremely high cost to children that gaming companies are inflicting when they exploit children in this manner. Those cost are financial and otherwise and should prompt legislators to regulate them and ban children from being able to make such gambling type purchase. The Guardian continues:  


Damian Collins, the chair of the committee, said: “Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the government to explain why loot boxes should be exempt from the Gambling Act.”

A survey by the Gambling Commission in 2018 found that 31% of children aged 11-16 had paid for loot boxes, while one gamer told MPs that he was spending up to £1,000 a year on the football game Fifa hoping to win better players for his team.

The report cited evidence from cognitive psychologists that such in-game features are “designed to exploit potent psychological mechanisms associated with […] gambling-like behaviours”.

The committee also argued that online games should be legally covered by the same enforceable age restrictions as physical sales, closing a loophole that publishers argued freed them of responsibility.

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EA Tries to label Gambling-esques Loot Boxes as ‘Surprise Mechanics’ During UK Parliamentary Investigation

Casino Watch Focus has reported on the ongoing studies and investigations into the latest predatory gaming mechanics known as loot boxes. These are digital boxes that can be purchase with real money in video games and they contain random loot that can be used in game. In some cases these are vary rare items that have value in game. Most of the time, however, they are essentially useless items and kids or other gamers are encouraged to buy another box to get the good prize. It’s effectively a slot machine, along with all the psychological bells and whistles designed to get the player to keep paying to open more boxes.

In some cases, these items have enough value that they can be cashed out or soldmaking them exactly like a slot machine. As a result, they have been investigated and studied vigorously over the past year or so and even when some conclude they aren’t outright gambling, almost all conclude they are predatory, addictive, aimed at exploiting children and some have concluded that they lead to problem gambling & gambling addiction.  

Most recently, the UK Parliament’s Digital Culture, Media, and Sports Committee conducted an investigation and they heavily questioned EA, the company most famously known for its loot box controversies involving key games like Star Wars Battlefield II and FIFA. During the testimony, they attempted to rebrand loot boxes and tried to compare this highly sophisticated and psychologically trapping mechanic to surprise toys, like Kinder Eggs, that you can buy in the store. Screen Rate explains:

Kerry Hopkins, EA’s VP of legal and government affairs, went on record during an oral evidence session with the UK Parliament’s Digital Culture, Media, and Sport Committee as saying that the company doesn’t view its microtransactions as loot boxes, but rather as “surprise mechanics.”

It’s a frankly shocking and blatant disregard of much of the research that has gone into the problem of loot boxes, with Hopkins also likening EA’s loot boxes to “Kinder Eggs, or Hatchimals.” The difference? The latter two haven’t been correlated with gambling addiction in research studies, whereas loot boxes have, even if many more studies need to be done to conclusively link the two. EA’s attempted rebranding of loot boxes in the face of anti-loot box stances in the Netherlands, Belgium, and now in the United States is a clear appeal to keep the practice in place in the face of growing hostility.

With EA, it can be hard to separate the fact from fiction, but in this instance, it’s not difficult at all: loot boxes are loot boxes, not “surprise mechanics.” That the publisher is even attempting to assert they’re anything but what they are is an insult to consumer intelligence everywhere, and shows a blatant disregard for ethical concerns, instead prioritizing money.

This level of false equivocation is beyond concerning. EA pushed back against the Belgian Gaming Commission when it concluded their FIFA loot box cards clearly constituted unregulated gambling. Ultimately, they did remove them from the game in that specific country, but they really don’t see a difference in their gambling mechanic and Hatchimals. Video Game YouTuber YongYea, in a rather spirited, yet extraordinarily well reasoned video, properly outlines why this a dangerous false equivocation:

The only similarity between loot boxes and Kinder Eggs is that both involve opening some kind of container to reveal a random reward. But video game loot boxes go layers deeper than that. First of all, unlike Kinder Eggs, video games usually charge an entry fee, normally $60 for the standard edition. With Kinder Eggs there is no entry fee. You buy one or a couple, you get whatever toy inside and that’s that.

Most of the rewards you get out of loot boxes will be completely useless, with a small chance of getting something truly coveted, and that is by design. [B]ecause loot boxes are digital in nature, its parameters can be controlled and adjusted to the developer’s and publisher’s whim at their convenience. We often see games that tweak the odds post-launch, that introduce new roadblocks, add new coveted items that are easier to get or new modes that are easier to overcome by paying, rather than playing.

Then there is also the fact that with Kinder Eggs, opening a container for the little toy inside [is] pretty much the whole game. There’s not much else to it than that. The entire purpose of Kinder Eggs is to get that toy and maybe collect them. In-game loot boxes, on the other hand, act as this sub system that holds a lot of influence over the game itself. Loot boxes often tend to be implemented in such a way that you pretty much have to buy them in order to access the best possible experience for the game you purchased or downloaded. They essentially act as slot machine tollbooths for the product you already bought. Games will often implement intentional issues and roadblocks so that you will have to pay to mitigate them through the purchase of these randomized rewards.

I should also point out that when you open a Kinder Egg, there are no flashy animations or sound effects that are strictly designed to release these chemicals in your brain that give you that addictive sense of anticipation. With loot boxes, on the other hand, every time you open one you’re presented with this spectacle that is not too dissimilar to what you’ll find in casinos, slot machines specifically. That’s because slot machines and loot boxes are designed with the same purpose in mind, to keep those who are psychologically susceptible to gambling addiction and addictive tendencies coming back so they can be milked dry. This is regardless of their mental or financial health. That’s not a priority for these casinos and companies like EA.

Casinos at least have some kind of system where they keep kids away and what have you. The gaming industry, on the other hand, doesn’t seem to [care] about kids whose minds are still developing, who are more susceptible to addiction than adults are. The gaming industry certainly doesn’t care about susceptible adults or implementing monetization schemes responsibly.

The gaming industry cannot even uphold something as simple as an age restriction. As per the ESRB, on their website you can see that any game with real-life gambling must be considered an adult’s only game. Of course, this classification will prevent that game from being sold on most major platforms. But because loot boxes make them so much money, they’re trying to pretend like loot boxes aren’t gambling. That’s how they get around this and now companies like EA are going as far claiming loot boxes aren’t even loot boxes, but rather surprise mechanics. No EA, Kinder Eggs and loot boxes don’t come anywhere close to being the same thing. That’s like saying getting shot with a BB gun is pretty much the same as getting shot with sniper riffle because both involve pulling a trigger that ejects a projectile. This is false equivocation at its finest and this is a classic move from EA and other major publishers.

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

 


New Studies Point to Connection between Loot Box Spending and Problem Gambling

Casino Watch Focus has reported on the newest gambling mechanic that has taken over video games aimed at children. Loot Boxes are a gambling reward system where the player pays to acquire mystery boxes that when opened provide random in-game items. These items can be simply cosmetic items like a new outfit for a character like Luke Skywalker to wear in Battle Front II, the Star Wars Game based on the Disney property that EA game developed that brought this issue to the forefront, to actually in game weapons that make you more powerful and thus able to win more. Many have called this mechanic out as simple gambling directed and children and the amount of money people spend on loot boxes chasing a certain item is staggering. Many world leaders and government agencies have either banned their use or have called for studies to enact legislation to properly regulate them. Now two large studies have come forward that provides proof that this mechanic plays on the same psychological principles that turn people into problem gamblers as well. An online source reports: 

Many popular games allow people to pay a small fee to obtain a “loot box” containing random selections of virtual in-game items. New research has found that there is a significant relationship between problematic gambling behaviors and spending money on loot boxes.

The findings, which appear in the journal PLOS One, indicate that people who spend more money on loot boxes are also more likely to be unable to keep their gambling habits in check.

“Loot boxes are extremely widespread. A recent analysis we did showed that they may feature in as many as 63% of mobile games. They’re extremely profitable, too: They’re estimated to have perhaps generated as much as $30 billion in revenue in 2018,” said study author David Zendle of York St. John University.

The societal impact of such finding is troubling to say the least. Various game publishers have made some changes to their loot box systems so that you can’t “cash out” or sell your items for real money, thus avoiding the technical definition of gambling in some jurisdictions. Still, others see the entire mechanic as so psychologically manipulative, that regulation is absolutely necessary, especially when so many games are geared towards children. The article goes on to outline the impact:

The participants all reported regularly playing at least of one of ten popular games that feature loot boxes: Player Unknown’s Battlegrounds, League of Legends, Hearthstone, Overwatch, Counter-Strike: GO, FIFA 18, Rocket League, DOTA 2, Team Fortress 2, and Tom Clancy’s Rainbow Six Siege.

“There is a link between loot box spending and problem gambling. However, we’re not sure if this means that loot boxes literally cause problem gambling, or if it means that people who are already problem gamblers spend significantly more money on loot boxes. In either case, though, it doesn’t look socially beneficial.”

Some researchers have compared loot boxes to a predatory form of psychological ‘entrapment’ where players spend an escalating amount of money because they believe they have invested too much to quit. But longitudinal research is needed to determine whether loot boxes are directly related to the development of gambling problems.

“Researchers have suggested that loot boxes might create a gateway to problem gambling. We still don’t know if this is true,” Zendle remarked. The study, “Loot boxes are again linked to problem gambling: Results of a replication study,
was authored by David Zendle and Paul Cairns. 

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FTC and Others Investigating the Dangers of Loot Boxes in Video Games and their Gambling Impact

Casino Watch Focus has reported on the ongoing happenings of loot boxes, a video game mechanic that most view as a form of gambling that prays on children. Various local and international agencies have taken the threat seriously and have started seriously looking into the dangers of loot boxes and their link to gambling. Most recently, 16 countries signed an agreement to study loot boxes as more and more evidence draws links between loot boxes and problem gambling. As an online source reports, the FTC is joining in those that have expressed serious concern with their own investigations:

Federal Trade Commission chairman Joe Simons announced Tuesday that the agency would be investigating the use of micro-transactions, commonly referred to as loot boxes, in video games. According to NBC, there has been growing concern around the use of these loot boxes, which some view as a form of gambling designed to be addictive that is marketed to children.

Earlier this year, Senator Maggie Hassan of New Jersey sent a letter to the Entertainment and Software Ratings Board (ESRB) president to request that she re-evaluate how the board rates games with loot boxes, according to the popular gaming news platform Polygon.

“The prevalence of in-game micro-transactions, often referred to as ‘loot boxes,’ raises several concerns surrounding the use of psychological principles and enticing mechanics that closely mirror those often found in casinos and games of chance,” Hassan wrote in her letter.

Researchers looking into the issue have found signs of addictive behavior and problem gambling among gamers who spend money on loot boxes. One study published in the /Public Library of Science/ which surveyed 7,000 gamers found that “the gambling-like features of loot boxes are specifically responsible for the observed relationship between problem gambling and spending on loot boxes.” They therefore concluded that “there may be good reason to regulate loot boxes in games.”

Across the pond, similar investigations are happening in the UK as the criticisms of look boxes grow, particularly as some of the most popular video games in the industry are adopting these predatory gaming mechanics. The Guardian reports: 

A House of Commons committee has announced plans to investigate the growth of “immersive and addictive technologies”, to advise the government on how to create policy and regulation that can protect the public from the negative effects of digitisation and “gamification”.

It follows a growing campaign against deliberately addictive mechanics in technology and video games, particularly the crossover with gambling represented by “loot boxes” – randomised rewards sold in games for real money.

The links between gaming and gambling is one of the key points to be investigated by the committee, which will ask: “What are the effects of in-game spending, especially on children, and does it need stronger monitoring or regulation?”

Games such as Fifa, Overwatch and Call of Duty have been criticised for the practice, which has led to reports of primary school-age children spending almost £500 on Fifa players and getting into the habit of spending £15 a week on pseudo-gambling. 

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

 


UPDATE: 16 Countries Sign Agreement to Fight Loot Box Gambling in Video Games as New Study Draws Link Between Loot Boxes & Problem Gambling

Casino Watch Focus has long reported on the ongoing fight to regulate the addictive and gambling-esque gameplay mechanic known as loot boxes. Video games offer boxes that can be purchased for real money and they randomly provide in-game items. These items often have real world value and have certainly been sold as such. Clear links between this and slot machine gambling have been drawn and many are realizing what’s at steak. The issue became a main-stream topic when the Disney’s popular Start Wars franchise was licensed and used by video game publisher EA to make Battlefront II. The loot boxes were a critical component to advancing in the game and it was practically essential from children playing the game to buy these loot boxes to get equipment to be able to compete in the game. The situation was so bad one legislator called the game and Star Wars Themed online casino. After several individual dealings with loot box regulation, including the first actual ban, we now see the first coalition attempting to regulate this new form of gambling to children. Variety explains: 

Fifteen gambling regulators from Europe, as well as Washington State Gambling Commission, signed an agreement to work together to address the “risks created by the blurring of lines between gaming and gambling,” according to Gambling Commission It also plans to tackle third-party websites that offer players the chance to gamble or sell in-game items.

Certain countries, like Belgium and the Netherlands, have already taken measures including officially declaring loot boxes as gambling. Those countries even had players unable to open loot boxes in “Counter-Strike: Global Offensive” (CS:GO) due to some players selling rare skins and other in-game items on third-party websites, sometimes for large sums of actual money.

Another measure was taken by popular games selling platform Steam, as Valve removed the ability to trade items in “CS:GO” and “Dota 2” on its platform to comply with gambling regulations in June. However, this will mark the first international combined effort against the concerns of gaming and gambling— which could mean a more intense effort than what individual states have taken.

Neil McArthur, chief executive and signatory of the UK’s Gambling Commission explained the intent behind the effort. “We have joined forces to call on video games companies to address the clear public concern around the risks gambling and some video games can pose to children,” McArthur said. “We encourage video games companies to work with their gambling regulators and take action now to address those concerns to make sure that consumers, and particularly children, are protected.” McArthur further noted that children could be “gambling with money intended for computer game products” using sites that allow users to bet real currency on in-game items. “We want parents to be aware of the risks and to talk to their children about how to stay safe online,” McArthur said.

Such efforts are even more critically important as more and more research is revealing the true cost and risk to our children. It was already reported that the loot box industry is expected to reach $50 billion dollars, but new research is demonstrating exactly what kind of negative effects that can have on children, and given the psychological similarities between gambling and these gaming mechanics, its no surprise the finding point towards a gateway to problem gambling. An online gaming publication reports:

An Australian committee has released the findings of an investigation on loot boxes in video games started earlier this year, reporting that loot boxes and problem gambling are linked and that the monetization practice comes with “a serious risk […] to cause gambling-related harm.”

The debate about loot boxes and their connection to gambling has been raging for quite some time at this point, but the Australian government’s investigation and findings back a growing number of lawmaking bodies and regulatory committees working to impose or encourage regulation of the practice.

In the case of this investigation, and according to information on the study shared by Lexology, researchers looked at a sample size of roughly 7,500 individuals and found “important links between loot box spending and problem gambling.”

The report notes that players with severe gambling problems were more likely to spend large sums on loot boxes in video games, and that its findings suggest that loot boxes can act as a gateway to problem gambling and that the monetization practice itself gives game companies “an unregulated way of exploiting gambling disorders amongst their customers.”

“These results support the position of academics who claim that loot boxes are psychologically akin to gambling,” reads a statement shared along with the findings, shortly after calling back to an earlier quote from the ESRB that likened loot boxes to baseball cards. “Spending large amounts of money on loot boxes was associated with problematic levels of spending on other forms of gambling. This is what one would expect if loot boxes psychologically constituted a form of gambling. It is not what one would expect if loot boxes were, instead, psychologically comparable to baseball cards.” 

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.

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UPDATE: Gambling-esque Loot Boxes in Video Games Face Regulatory Measures & Studies from Governments like Hawaii and Private Companies like Apple, but are they Actually Harmful?

Casino Watch Focus has reported on the newly covered, gambling type video game items known as loot boxes. The boxes are purchasable in a video game and they provide random loot, or in game merchandise, much like a slot machine. This system of microtransactions came to light because EA pushed the envelope so far in their new Disney licensed Star Wars video game, that the only way to truly progress in the game or have the tools to win was to buy these loot boxes and gamble on the items you would get. The system is designed for the player to buy boxes, open them and chase after the best loot. Players pushed back, mainstream media picked up the issue, Disney had to get involve and make EA pull the gambling system from the game and legislators started looking into the issue. Hawaii legislators came out very strongly against the idea of exposing children to such psychologically manipulative, gambling type systems and called the game a Star Wars themed online casino. Its no surprise that a few weeks later and Hawaii legislators are now drafting legislation and working with other states and the industry itself to regulate the issue.   Gaming publication Kotaku reports:

A Hawaii in which games with microtransactions are illegal for minors to purchase is one that state legislator Chris Lee is now hoping to realize. He says that prohibiting the sale of games with loot boxes is a “no-brainer,” and along with a dozen other politicians, he says, he’s thinking of how to put legal controls around video game microtransactions. 

Over the course of a few months, Lee had been hearing from local teachers about kids who struggled with the temptation to spend beyond their means in game microtransactions. Lee cited one conversation about a kid who, he heard, had stolen their parents’ credit card to pay for their gaming habit. He says several families reached out about spending thousands of dollars on microtransactions.

“Gambling has been illegal especially for minors and young adults because they are psychologically vulnerable,” he told me, adding that kids “often don’t have the cognitive maturity to make appropriate decisions when exposed to these kinds of exploitative mechanisms.” 

“There’s no transparency at the outset of what they’re getting into,” he said. “That’s something I think is a real concern.” Now, Lee is working to prevent the sale of games containing loot boxes to gamers under 21 in Hawaii. He also wants games to disclose up-front whether they have “gambling-based mechanics” and to publicize the odds of winning various items in loot boxes.

Apple Inc. certainly agrees with Lee that the odds of winning various items need to be disclosed to gamers. Falling in line with what other foreign governments like China Korea, Apple is now requiring game companies to publicize the odds. Venture Beats explains:

Apple quietly updated its rules for developers yesterday with a new version of its App Store Review Guidelines, and it now requires that developers disclose the odds of getting cool loot in the loot boxes for free-to-play games.

Loot boxes have become a big monetization opportunity in free-to-play games, but they’re also controversial, as Electronic Arts’ discovered with tying loot crate purchases to unlocking desirable characters like Darth Vader in Star Wars: Battlefront II. Gamers revolted, and EA backed off. Government officials also started to step in to say that loot crates should be regulated, as they can be perceived as ripping off consumers or even as gambling.

Apple is clearly trying to get ahead of any regulatory problem by requiring that developers now disclose proper information.

But those in the gaming industry don’t believe loot boxes are gambling. Not only have individual companies gone on record to say they are perfectly fine, the ESRB, the self-regulated industry body who labels games by age range, came out and said they didn’t believe they were gambling and they certainly haven’t proposed any regulatory measures to help protect consumers against the predatory nature of microtransactions. Those fighting against loot boxes aren’t simply looking at antidotal evidence either. The UK’s Gambling Commission just released a report with rather shocking evidence of children as young as 11 being preyed upon and possibly lead into gambling addiction. Dr. Mark Griffiths, Professor of Behavioral Addiction at Nottingham Trent University explains:

Last week, the Gambling Commission’s annual report found that children as young as 11 years of age are “skin gambling” online – paying money for the chance to win in-game virtual items. But this, while alarming, is just the tip of the iceberg.

It’s the terrifying phenomenon of “loot boxes” that are the most worrying and potentially dangerous aspect of e-gaming for children right now. “Loot boxes” are everywhere – they are otherwise known as crates, chests, cases, bundles, and card packs.

In FIFA Ultimate Team, for example, players can purchase gold, silver or bronze card packs, either using in-game currency or real money, in the hope of getting their hands on top talent to improve their teams. But there’s no guarantee of landing A-listers like Ronaldo or Messi – the cards won’t all be star players and will more likely be less valuable collectables.

The issue is that the buying of crates or loot boxes is a form of gambling because players, often children, are being asked to buy something of financial value that could end up being of lower financial value than the amount they paid. 

The good thing is parents are now hearing about things like “skin gambling” and “loot boxes” but children also need to be educated about these activities as much as drinking, drugs or the risks of underage sex. Parents need to get to grips with what is going on in their children’s worlds.

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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. 

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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.” 

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Vast Majority of Florida Voters Want to Maintain or Reduce current Gambling Levels

Casino Watch Focus has reported on the ongoing gambling expansion attempts in Florida. Many times over the years Florida voters have had a say in the expansion of gambling in Florida, but most of the time, Florida families are at the mercy of the legislature. If the Florida House and Senate agree to expand gambling due to special interest influence, citizens and families often lack recourse other that perhaps trying to elect new officials into office. Because of such strong pro-gambling interests, an initiative petition is in the works to give the power back to the people. So what do the people of Florida think about gambling? Do they approve of the gambling expansion efforts at the State Capitol? Are they fine with all the lobbing dollars from special gambling interests flowing through the Florida Legislature? Or do they believe gambling expansion should be stopped, or even reduced? A new poll seeks answers and the results should open the eyes to legislators who are representing their constituents. Florida Politics online explains:

The vast majority of Florida voters — 84 percent— “want to reduce or hold the line on gambling” and 60 percent also “are less likely to support a candidate … that votes to expand gambling,” a new poll released Monday shows. The latest Mason-Dixon poll included questions on gambling, according to a news release from No Casinos, Florida’s anti-gambling expansion group.

The anti-expansion “feeling among Floridians carries across all regions of the state: North Florida (87 percent), Central Florida (92 percent), Tampa Bay (81 percent), Southwest Florida (84 percent), Southeast Florida (78 percent),” the release said.

“Tallahassee politicians need to get the message that only 8 percent of Florida voters want gambling expanded, and 84 percent want it left alone or reduced,” said John Sowinski, president of No Casinos. “It’s time to stop listening to gambling lobbyists and listen to the people.” In addition, he said most “Floridians don’t want their elected officials to expand gambling, because they know that more gambling hurts the quality of life for them and their families.”

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Guest Article: Tampa Bay Times Editorial: Florida Lottery Targets Poor Residents

Casino Watch Focus has reported on the recent bill introduced to allow Florida Lottery tickets to be sold on line in the wake of the Lottery Secretary resignation scandal. The downfall of lottery winners and the disadvantages of this form of gambling have also been heavily reported on. Now, the Tampa Bay Times has released an editorial outlining the disproportionate effects the lottery has on the poor:

The Florida Lottery recently introduced five new scratch-off games, a move that likely will boost the lottery’s bottom line at the expense of its most vulnerable ticket buyers. Scratch-offs, which range from $1 to $25 a ticket, are most heavily played by the poor. No one is forcing them to fork over their money, of course. But as the lottery tailors its offerings to maximize scratch-off sales and markets games in low-income neighborhoods, Floridians would be right to question whose interest that really serves.

The names of the games are straightforward and promote a potential windfall: Maximum Money, Bonus Crossword, Double Deuces, Lucky Seven and Fast $100. All cost between $1 and $5, with a top prize of $250,000 for the $5 game. The new options mean the lottery now offers 83 scratch-off games, which account for 65 percent of ticket sales. Why do the poor play them more? For the instant gratification, experts say. People in poverty see the lottery as a chance to improve their lives. It rarely works out that way, but ticket sales soar nonetheless.

The South Florida /Sun /Sentinel recently analyzed lottery sales figures, marketing data and geographical information to discover who buys scratch-offs and what it costs them. The findings are disturbing. From 2010 to 2015, sales of scratch-offs rose three times faster in poor neighborhoods than in other areas, and it happened as the lottery directed more advertising to poor and minority areas, the /Sun /Sentinel found. Those parallel increases point to a win for the lottery’s marketing department but no one else.

Gambling critics refer to lotteries as a tax on the poor. But unlike taxes, lottery purchases aren’t compulsory. However, like taxes, they affect populations differently. The /Sun Sentinel/ found that people in high-poverty areas spent an average of $385 in 2015 on scratch-off tickets. In better-off areas, the average was $245. Those figures validate the argument that lotteries are regressive and even harmful.

Where that harm might be mitigated — in increased money for education — inequality persists. Florida’s Bright Futures scholarships, funded with lottery money, are awarded to students who score in the top tier on the SAT or ACT. The high standards mean mostly middle- and upper-class students earn the scholarships, not poor and minority kids. That gap grew wider last year when the state raised the bar even more on Bright Futures in order to rein in costs.

These are salad days for the Florida Lottery, which is enjoying its highest sales ever — $532 million in July alone. Profits were up 17 percent compared with July 2015. But too much of the windfall is coming out of the pockets of low-income Floridians who are being lured to spend money they can’t afford to lose on a long-shot bet.

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New Poll Shows Florida Voters Overwhelmingly Support Voter Choice In Gambling Expansion Matters

Casino Watch Focus has reported on the ongoing efforts to help ensure the people of Florida have the ability to directly impact gambling expansion. Recent efforts have centered around a ballot initiative that would amend the constitution to require a vote of the people before any gambling expansion legislation can be pushed forward by the legislature. Voters in Charge, the group responsible for the petition, have secured the signatures to keep the process moving forward the bill is not before the Florida Supreme Court to ensure it meets the proper requirements. As the process moves forward, its important to know how well the amendment would do on the ballot, and a new poll aims to answer that questions.   The poll results, released by No Casinos and conducted by Hill Research Consultants, was outlined by Orlando Politics Online: 

– 69% support a referendum requiring voter approval of all gambling expansion decisions. Such a referendum, the Voter Control of Gambling Amendment, currently is before the Florida Supreme Court for placement on the 2018 ballot. Only 21% oppose it.

– 83% believe that Florida voters should decide gambling policy in Florida. By comparison, 7% believe the Florida Legislature should decide, 3% believe the Governor should decide and 3% believe the courts should decide.

– 72% indicated they would be less likely to support a political candidate who supports expanded gambling in Florida without a statewide vote. By contrast, 18% are more likely to support such a candidate and 6% say it makes no difference.

– 75% disagree that more gambling in their city will improve the quality of life for them or their families, while 18% believe more gambling improves their quality of life.

The poll was directed at actual Florida voters who voted in recent elections. The margin for error was under four percent, so the implications are pretty clear. No Casino’s President, John Sowinski, summarized:

“The will of the voters could not be clearer,’’ said John Sowinski, President of No Casinos. “Regardless of political party, Floridians overwhelmingly want a say in whether gambling will be expanded in our state. They understand the negative social and economic consequences. This is why the gaming industry continually tries to circumvent public opinion, hiring lobbyists and lawyers to push their agenda of more and more gambling in the Legislature and courts. Elected officials should take heed — it is not only good public policy, it is also smart politics to reject expanding gambling in Florida.”

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Gambling Taxes are only Short-Term Fixes for States looking for Sustainable Revenue Streams

Casino Watch Focus has reported many times on various states expanding gambling as a means to collect tax revenue, often times at the expense of its own citizens. 100 years ago virtually all forms of gambling were illegal, but slowly, one state at a time, gambling has been made legal by states looking to take their cut of the action. Some gambling expansion takes the form of lotteries, other expansion measures are full-scale casinos. The sales pitch is typically the same, why not allow some harmless fun that will allow the state to bring in some much needed tax revenue, often times promised to local educational causes. Now, a new study confirms what many have claimed, that any initial gains a state looking to expand gambling may see, don’t materialize to long term benefit. Reuters explains: 

Gambling provides only a short-term fix for U.S. states looking to boost revenue without having to turn to politically unpopular tax hikes on income and sales, according to a public policy research group’s study released on Tuesday. The Rockefeller Institute of Government said more than a dozen states legalized or expanded gambling in the wake of last decade’s Great Recession.

“History shows that in the long-run the growth in state revenues from gambling activities slows or even reverses and declines,” the study said. The study comes as some states consider whether to expand gambling. 

In New Jersey, voters will decide in November whether to allow two new casinos in the north, close to New York City. Local officials in cash-strapped Atlantic City, currently the only area in New Jersey where gambling is allowed, say new casinos will cause the city to lose even more revenue.

With recovery of U.S. regional gaming revenues tepid, long-term headwinds will continue to weigh on the sector, Fitch Ratings said in a separate report on Tuesday. Barriers to growth include “slower wage growth, less certain retirement prospects for baby boomers, and alternative avenues for gambling,” Fitch said.

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