Научная статья на тему 'Experience of Legal Regulation of Lootboxes in Different Countries: a Comparative Analysis'

Experience of Legal Regulation of Lootboxes in Different Countries: a Comparative Analysis Текст научной статьи по специальности «Право»

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comparative legal studies / consumer protection / digital technologies / gambling / gaming industry / law / licensing / Loot box / video games / virtual goods / азартные игры / видеоигры / виртуальный товар / защита прав потребителей / игровая индустрия / лицензирование / лутбокс / право / сравнительное правоведение / цифровые технологии

Аннотация научной статьи по праву, автор научной работы — Seppy Pour

Objective: to show how the use of a new business model called Loot boxes, on which modern video games are based, has become a legal problem for jurisdictions in different countries. Methods: drawing on existing literature and contemporary sources, the article explores the potential negative consequences of Loot boxes, provides a comprehensive analysis of existing or proposed regulation, and compares the approaches taken in various national jurisdictions. Results: the article examines the growing concern surrounding the widespread use of a particular form of in-game purchases called Loot boxes. It is strongly criticized on the grounds that Loot boxes are presumed to be a form of gambling within a video game. On this basis, this article argues in favor of their legislative regulation. Having examined the regulatory framework in countries that have already taken action against the use of Loot boxes, such as Belgium, the Netherlands, China, Japan and the Republic of Korea, as well as in countries currently debating their regulation, the author emphasizes the need to adopt consumer protection measures in the gaming industry. This is particularly relevant for vulnerable strata exposed to gambling-related harms. In addition, there is a need to ensure the ethical and responsible use of Loot boxes, as well as to reduce the health and financial risks associated with the use of this business model. Scientific novelty: the paper presents a comparative study of the problems of current or projected social regulation of Loot boxes in video games. The author proposes to seek the solution in a balance between game industry innovations, consumer protection and user well-being, which will ultimately contribute to the creation of a healthier environment for gamers. Practical significance: the study highlights the international scope of the problem the difference in legal and ethical regulatory measures taken in different countries to address the psychological, social and financial consequences associated with the proliferation of lootboxes in video games. These measures are yet to be assessed, taking into account the findings concerning the gaming industry.

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Опыт правового регулирования лутбоксов в различных странах: сравнительный анализ

Цель: показать как использование новой бизнес-модели, получившей название лутбоксов и лежащей в основе современных видеоигр, стало правовой проблемой для юрисдикций разных стран. Методы: опираясь на существующую литературу и современные источники, в статье раскрываются потенциальные негативные последствия использования лутбоксов, проводится комплексный анализ действую­щего или предлагаемого регулирования, а также сравнение подходов, применяемых в различных национальных юрисдикциях. Результаты: в данной статье рассматривается растущая обеспокоенность вокруг широкого распространения особой формы внутриигровых покупок называемой лутбоксами. Она подвергается резкой критике на том основании, что лутбоксы предположительно являются своего рода азартной игрой в составе видеоигры. Исходя из этого, в данной статье приводятся аргументы в пользу их законодательного регулирования. Изучив нормативно-правовую базу в странах, которые уже приняли меры против использования лутбоксов, таких как Бельгия, Нидерланды, Китай, Япония и Республика Корея, а также в странах, где в настоящее время обсуждается вопрос их регулирования, подчеркивается необходимость принятия мер по защите потребителей в игровой индустрии. Особенно это относится к уязвимым слоям населения, подверженных вредным последствиям, связанным с азартными играми. Кроме того, отмечается необходимость обеспечения этичного и ответственного использования лутбоксов, а также снижения рисков для здоровья и финансовых рисков, связанных с использованием данной бизнес-модели. Научная новизна: в работе представлено сравнительное исследование проблем действующего или проектируемого социального регулирования лутбоксов в видеоиграх, решение которых предлагается искать на основе баланса между инновациями в игровой индустрии, защитой потребителей и благополучием пользователей, что в конечном итоге будет способствовать созданию более здоровой среды для геймеров. Практическая значимость: представленное исследование подчеркивает международный масштаб рассматриваемой проблемы, различие принятых в странах регулятивных мер юридического и этического характера, направленных на решение психологических, социальных и финансовых последствий, связанных с распространением лутбоксов в видеоиграх, оценку которым еще предстоит дать в дальнейшем с учетом полученных данных в отрасли игровой индустрии.

Текст научной работы на тему «Experience of Legal Regulation of Lootboxes in Different Countries: a Comparative Analysis»

Research article

UDC 34:004:347.21:004.4

EDN: https://elibrary.ru/uxqado

DOI: https://doi.org/10.21202/jdtl.2024.18

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Experience of Legal Regulation of Lootboxes in Different Countries: a Comparative Analysis

Seppy Pour O

Kun Consulting Group, Sydney, Australia

Keywords

comparative legal studies,

consumer protection,

digital technologies,

gambling,

gaming industry,

law,

licensing, Loot box, video games, virtual goods

Abstract

Objective: to show how the use of a new business model called Loot boxes, on which modern video games are based, has become a legal problem for jurisdictions in different countries.

Methods: drawing on existing literature and contemporary sources, the article explores the potential negative consequences of Loot boxes, provides a comprehensive analysis of existing or proposed regulation, and compares the approaches taken in various national jurisdictions. Results: the article examines the growing concern surrounding the widespread use of a particular form of in-game purchases called Loot boxes. It is strongly criticized on the grounds that Loot boxes are presumed to be a form of gambling within a video game. On this basis, this article argues in favor of their legislative regulation. Having examined the regulatory framework in countries that have already taken action against the use of Loot boxes, such as Belgium, the Netherlands, China, Japan and the Republic of Korea, as well as in countries currently debating their regulation, the author emphasizes the need to adopt consumer protection measures in the gaming industry. This is particularly relevant for vulnerable strata exposed to gambling-related harms. In addition, there is a need to ensure the ethical and responsible use of Loot boxes, as well as to reduce the health and financial risks associated with the use of this business model.

Scientific novelty: the paper presents a comparative study of the problems of current or projected social regulation of Loot boxes in video games. The author proposes to seek the solution in a balance between game industry innovations, consumer protection and user well-being, which will ultimately contribute to the creation of a healthier environment for gamers.

© Pour S., 2024

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (CC BY 4.0) (https://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.

Practical significance: the study highlights the international scope of the problem the difference in legal and ethical regulatory measures taken in different countries to address the psychological, social and financial consequences associated with the proliferation of lootboxes in video games. These measures are yet to be assessed, taking into account the findings concerning the gaming industry.

For citation

Pour, S. (2024). Experience of Legal Regulation of Lootboxes in Different Countries: a Comparative Analysis. Journal of Digital Technologies and Law, 2(2), 345-371. https://doi.org/10.21202/jdtl.2024.18

Contents

Introduction

1. Loot Boxes: Origins and Definition

1.1. The Origin of Microtransactions

1.2. Loot boxes in the mainstream

1.3. Definition and Prevalence

2. Arguments for Legal Regulation

2.1. Ensuring Ethical Conduct

2.1.1. Psychological Manipulation

2.1.2. Financial Exploitation

2.2. Harm Minimisation

2.2.1. Vulnerable Populations

2.2.2. Children and Adolescents

3. Comparative analysis of national approaches to regulation

3.1. Belgium

3.2. Netherlands

3.3. Spain

3.4. United Kingdom

3.5. Finland

3.6. China

3.7. Japan

3.8. Republic of Korea

3.9. Germany

3.10. Canada

3.11. Australia

4. Challenges to Implementation

4.1. Challenging the Status Quo

4.2. Industry Transparency and Insight

4.3. Enforceability Conclusions References

Introduction

Over 3 billion people play video games1. With this number expected to reach 3.6 billion by 2025, the video game industry stands to increase in market value to a purported $211.2 billion2. This value is in part derived through 'microtransactions', a business model which allows users to purchase virtual goods in video games or other in-game advantages with real life currency. Loot boxes are one such virtual good which can be purchased via a microtransaction.

Loot boxes (also referred to as loot crates or gachas) describe any in-game mechanism in which a randomised game-related item can be obtained from a virtual box (Drummond & Sauer, 2018). These boxes are typically purchased using real life currency, or otherwise opened using 'keys' which must be purchased using real currency. The boxes do not award a specific item, instead offering a range of items which could be obtained, varying in rarity, strength, value, and likelihood of being awarded, with stronger or more valuable items being less likely to appear (Gong & Rodda, 2022). Due to their resemblance to traditional forms of gambling such as slot machines or lottery tickets, the use of loot boxes in modern video games has sparked a fiery debate about its ethical and legal implications.

Stories of excessive spending on loot boxes, often by minors, are not uncommon3. Nor are stories involving what would traditionally be described as gambling-like behaviours4. Research has indicated a correlation between loot box engagement and problem-gambling severity, suggesting that certain individuals may be particularly susceptible to the addictive nature of loot boxes (Zendle & Cairns, 2019). It is therefore imperative to address these concerns and implement regulatory measures that protect consumers, particularly those vulnerable to gambling-related harms.

This paper will explore the various arguments in favour of regulating loot boxes. It will first consider the definition and prevalence of loot boxes in modern video games. Second, it will examine the potential psychological and financial consequences of loot boxes. It will then analyse existing policy approaches and regulatory frameworks in different jurisdictions and discuss the rationale and history of these frameworks. Finally, it will briefly discuss challenges of implementation of loot box regulation. By highlighting the various approaches to loot box regulation, this paper seeks to contribute to ongoing academic and industry discussion relating to loot box mechanics, advocate for consumer protection measures within the gaming industry, and mitigate the health and financial risks associated with loot boxes.

1 Wijman, T. (2023). Free Global Games Market Report. Newzoo. https://clck.ru/3A9d8c

2 Ibid.

3 Gach, E. (2017, November 30). Meet The 19-Year-Old Who Spent Over $17,000 On Microtransactions. Kotaku. https://goo.su/cQpxD6g

4 Ibid.

1. Loot Boxes: Origins and Definition

1.1. The Origin of Microtransactions

The use of real currency to purchase in-game items is not a novel concept; traceable back to the 1990 arcade game Double Dragon 3: Rosetta Stone - infamous for the invention of microtransactions5. A classic side-scrolling, single-player fighting game, at the commencement of each of the first three stages of the game players have the option to enter a shop and purchase weapons, special attacks (called 'tricks'), and additional playable characters.

In typical arcade fashion, Rosetta Stone was engineered to encourage players to pour in the quarters6. Without any purchases in the in-game shop, playable characters had less health than in previous Double Dragon games, had only one life, and had no access to weapons (which also precluded the player from using certain attacks and seeing weapon-based fighting animations)7. When the game was ported for Japanese audiences, microtransactions were entirely removed, likely due to the controversy they had caused in the North American market8. Concurrently, the game was 'rebalanced' to allow all characters to be selectable from startup, have increased health, have access to every 'trick', and weapons to be organically found throughout the game.

1.2. Loot boxes in the mainstream

Microtransactions began to become the norm throughout the 2000s. During this time, a gaming format known as a massively multiplayer online game (MMO) had become intensely popular. These MMOs, which could be played by tens of millions of people9, varied in their business models10.

One approach was the subscription or 'pay-to-play' model, typically in the region of $15 per month. This was the cost for the most popular MMO of all time, World of Warcraft, for example11. Other popular games such as Guild Wars and Elder Scrolls Online were 'buy-to-play', requiring players to purchase the full game initially but then allowed them to play in perpetuity with no further costs. While many 'free-to-play' games existed, the developers of these games often sought to increase their player base before introducing a subscription requirement or simply selling the game to another developer.

5 Derboo, S. (2016, November 4). Double Dragon 3 (Arcade). Hardcore Gaming 101. https://clck.ru/3A9dYA

6 (2022, June 9). Double Dragon 3: The Rosetta Stone (Arcade). The Cutting Room Floor. https://clck. ru/3A9dZS

7 Derboo, S. (2016, November 4). Double Dragon 3 (Arcade). Hardcore Gaming 101. https://clck.ru/3A9dbT

8 (2022, June 9). Double Dragon 3: The Rosetta Stone (Arcade). The Cutting Room Floor. https://clck.ru/3A9dc6

9 Top MMOs. MMO Populations. https://clck.ru/3A9ddP

10 Olivetti, J. (2016, 30 April). Massively OP's guide to MMO business models. Massively Overpowered. https://clck.ru/3A9de5

11 Assuming the player purchased one month at a time, with lower monthly rates available if 6 or 12-month memberships were purchased up front.

In practice, MMOs often utilized hybrid business models. RIFT, for example, advertises itself as a free-to-play game, but allows players to purchase a 'Patron Pass' to receive "access to the benefits of a subscription for a set amount of time"12. It also maintains an in-game item shop where players can spend 'Credits', an in-game currency which could be purchased using real currency. The hybrid approach meant that games could implement microtransactions regardless of whether they were free, buy-to-play, or pay-to-play, bringing into existence a new revenue model: the item-based model (So & Westland, 2012).

While the exact origins of loot boxes are disputed, So & Westland trace it back to the Chinese gaming community in which players typically did not own home PCs nor gaming consoles, the latter of which were banned nationwide in 2000 (Liao, 2016). This meant that gamers predominantly undertook their gaming in internet cafes, circumventing the need to purchase full-title games upfront and leaving game developers seeking alternative forms of revenue. Here, a developer by the name of Zhengtu Network saw an opportunity and released Zhengtu Online. Officially launching in 2007, Zhengtu was a free-to-play MMO which allowed players to purchase "virtual treasure boxes, which may contain ingame items worth more than the cost of the box itself" (So & Westland, 2012). The game achieved unprecedented success that same year, both financially and in player numbers (So & Westland, 2012). With profits justifying the means, other developers quickly began to take note of the viability of loot boxes in achieving large-scale commercial success.

1.3. Definition and Prevalence

Legally accepted definitions of gambling generally require three elements: (a) consideration, (b) chance, and (c) a reward (Devereux, 1979). This interpretation overtly omits games which dominantly require skill (Brenner & Brenner, 1990). This definition would certainly be satisfied by some, if not most, existing loot box systems. Policymakers in some jurisdictions have interpreted this definition narrowly, declaring loot boxes legal under their regulatory framework because the rewards do not allow players to receive a prize in the form of real currency (or in a form that can be directly exchanged for real currency, e.g. casino chips)13.

Others have argued that the predatory and entrapping nature of loot boxes justifies its categorisation as a form of gambling (King & Delfabbro, 2018). King and Delfabbro suggest that loot boxes and other predatory schemes in video games "contribute to the increasing similarity of gaming and gambling" because they "disguise or withhold the long-term cost of the activity until players are already financially and psychologically committed". Griffiths has similarly propounded that the unpredictable result of opening loot boxes inherently constitutes gambling because the value of the rewards are often less than the price paid (1995).

12 Game Guide | FAQ. Rift. https://clck.ru/3A9dgs

13 Nettleton, J., & Chong, K. (2013, October 16). Online social games - the Australian position. Mondaq. https://clck.ru/3A9dhY

Loot boxes have gone on to be featured in many games since Zhengtu. High-profile titles such as Call of Duty, Counter-Strike, FIFA, Destiny, Valorant and Overwatch currently make slightly different forms of loot boxes available in their mainline games. Counter-Strike, for example, allows for 'skins' to be obtained via 'containers', enabling players to customise the look of their in-game weapons without providing any change in how the weapons operate (i.e. purely cosmetic rewards)14. In contrast, players can open 'packs' in FIFA to obtain better players to add to their team; the better the players obtained, the better the player's team becomes for competitive play15.

A 2021 report by Juniper Research estimated $15 billion revenue generated from loot boxes in 2020, with predicted spending to exceed $20 billion by 2025 without regulatory intervention16. Loot boxes appear to be highly prevalent in video games, especially on mobile platforms (2020a). Analysis by Zendle et al revealed that 58% of the 100 top-grossing mobile games on the Google Play store and 59% of those on the Apple App store contained loot boxes. Comparatively, an analysis of the top 463 most-played games on the Steam platform, a digital video game distribution service, found that 71% contained loot boxes (2020b). This represents a 67% increase in the prevalence of loot boxes in desktop games between 2010-2019, accelerated by rapid growth in 2012-2014. Among adult gamers, 78% have purchased at least one loot box (Zendle et al., 2020a).

2. Arguments for Legal Regulation 2.1. Ensuring Ethical Conduct 2.1.1. Psychological Manipulation

The allure of uncertain rewards and the use of persuasive techniques can have a significant psychological impact on individuals, potentially leading to addictive behaviors or the normalization of gambling-like tendencies. Akin to traditional forms of gambling, the random nature of loot boxes taps into psychological principles such as operant conditioning (Staddon & Cerutti, 2003) and variable-ratio scheduling (Zuriff, 1970) to increase engagement and satisfaction among players.

Players are motivated by the anticipation and excitement of what they might receive, creating a sense of reward and euphoria upon obtaining rare or valuable items. As documented in behavioural psychology literature, these phenomena prey on the notion that unpredictable rewards are more motivating and addictive than those which are predictable or expected. The intermittent nature of rewards in loot boxes, sometimes resulting in a 'near miss' scenario, can fuel a cycle of anticipation and continuous engagement as players strive to obtain newer and more valuable items.

14 Container. Counter Strike Wiki. https://clck.ru/3A9dji

15 Your Guide to: FIFA Ultimate Team Packs. FIFA. https://clck.ru/3A9dk3

16 Moar, J., & Hunt, N. (2021, March 9). 'Video Game Loot Boxes to Generate Over $20 Billion in Revenue by 2025. Juniper Research. https://clck.ru/3A8Xn6

The uncertainty and element of chance can trigger further cognitive biases like the illusion of control and the gambler's fallacy, leading players to believe they have more control over the outcome than they do. This can result in addictive behaviors and excessive spending as players chase after desired items or experience a sense of loss aversion.

2.1.2. Financial Exploitation

Critics argue that the use of loot boxes may normalize gambling-like behaviours among young players, potentially leading to gambling-related issues later in life. Recent analysis by Primi et al showed that loot box engagement had a significant effect on video game frequency, problem video gaming, and gambling frequency (2022). The repetitive nature of opening loot boxes, driven by the desire to obtain rare or valuable items, can create a reward-seeking loop that reinforces impulsive behavior and undermines the concept of earning rewards through skill-based achievements or progression.

Moreover, loot boxes employ various subliminal techniques to entice players to make purchases. These include eye-catching and aesthetic visuals, such as flashy animations, music and sound effects, to enhance the perceived value of opening a loot box regardless of its objective value. Additionally, limited-time offers, exclusive items, and in-game events create a fear of missing out (FOMO), fostering a sense of urgency and driving players to spend more money.

Overall, the mechanics of loot boxes combine chance, anticipation, and variable rewards to create a psychological impact that can be both enticing and potentially detrimental to players, necessitating careful consideration and regulation to protect consumers. Understanding the mechanics and psychological implications of loot boxes is essential to addressing the associated concerns and develop responsible regulatory measures.

2.2. Harm Minimisation 2.2.1. Vulnerable Populations

The psychological impact of loot boxes disproportionately affects vulnerable populations who may be more susceptible to gambling-related behaviors. For individuals with predispositions to gambling, the similarities between loot boxes and traditional forms of gambling can trigger addictive tendencies or lead to problematic behaviors. A large-scale survey by Zendle and Cairns (2019) identified a link between the amount that gamers spent on loot boxes and the severity of their problem gambling. The link was stronger than a link between problem gambling and buying non-loot box items with real currency, suggesting that the gambling-like features of loot boxes are specifically responsible for the observed relationship between spending on loot boxes and problem gambling.

Another study by Drummond (2022) demonstrated that purchasers of loot boxes were approximately 1.87 times higher risk of severe psychological distress on a standardised clinical screening tool than people who did not purchase loot boxes. This effect was observed even in subjects who did not exhibit problem gambling symptoms.

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2.2.2. Children and Adolescents

Loot box mechanics are also highly targeted towards minors, who may be less capable of understanding the implications of spending real money or the negative effects of gambling. Analysis by Zendle et al. (2020b) shows that of the top 50 most played games on the Steam platform that contain loot boxes, 43% are classified as suitable for children aged 12+. For mobile platforms, 93% and 94% of the 100 top-grossing games on the Google Play and Apple App stores, respectively, that contain loot boxes are considered suitable for children aged 12+.

A recent Australian study found that up to 40% of adolescents have gambled on digital games in the past 12 months, including 36.5% of participants who had purchased loot boxes17. In teenagers, buying loot boxes has been associated with higher gambling frequency and gambling problems (Rockloff et al., 2021), and greater risk for gaming disorder (Hing et al., 2023a). In particular, teenage girls who had engaged with loot boxes more often had positive attitudes towards gambling compared to girls who had not. This suggests that gambling interests in girls may develop around or at the same time as interest in loot boxes.

A 2023 study by Hing et al found that adolescents who engage in simulated gambling in video games engage in simulated gambling more frequently and in more diverse settings later in life, and that the activities they seek out become more akin to monetary gambling (2023b). Concerningly, the study identified that young people often fail to realise that simulated gambling in video games resembles gambling and can have both gaming and gambling-related harms (Hing et al., 2023b).

3. Comparative analysis of national approaches to regulation 3.1. Belgium

On 17 November 2017, Electronic Arts Inc. ('EA') released Star Wars Battlefront II on Windows, Playstation 4 and Xbox One18. The game received widespread criticism for its painstaking progression system and option to engage in microtransactions to skip this progression, including the availability of loot boxes19. Shortly after the game's release,

17 Hing, N., Rockloff, M., & Browne, M. Submission to the Inquiry into online gambling and its impacts on those experiencing gambling harm. No 24. Parliament of Australia Standing Committee on Social Policy and Legal Affairs, Inquiry into online gambling and its impacts on those experiencing gambling harm. https://goo.su/lkp6

18 (2023, 17 July). Star Wars Battlefront II (2017 Video Game). Wikipedia. https://clck.ru/3A9due

19 Ibid.

reddit user MBMMaverick posted a thread on the StarWarsBattlefront subreddit entitled 'Seriously? I paid 80$ [sic] to have Vader locked?'20. The thread received over 228,000 net positive votes and nearly 3,000 comments, almost of which condemned the game design which ostensibly drove players to spend money to progress in the game. The post received a response from the EA community engagement division who claimed that the laborious progression system was intended to provide players "with a sense of pride and accomplishment"21. The comment unsurprisingly received a wave of negative responses and quickly became the most negative voted comment in Reddit's history22. Shortly thereafter, EA updated the game to remove all microtransactions23. Battlefront II is credited for bringing the controversy of microtransactions and loot boxes to mainstream discussion24.

The media coverage surrounding Battlefront II convinced Belgian Minister of Justice, Koen Geens, to order an investigation into the legality of loot boxes under its gambling legislation25. Belgium's Gaming Commission considered loot box mechanics with against the definition of 'gambling' under Belgian law; three conditions need to be satisfied: "a game element, a bet [which can] lead to profit or loss, [with] chance playing a role in the course of the game"26. Having analysed four of the most well-known online games in 2017-2018 (Overwatch, FIFA, Star Wars Battlefront II, and Counter-Strike: Global Offensive), the Commission ruled that the elements required under Belgian gambling law to constitute 'gambling' were satisfied and therefore loot boxes should be regulated as a gambling product27.

In outlining its findings, the Commission stated its compliance regime as follows:

"Despite the fact that the system of loot boxes in the... video games can be seen as a game of chance, the protection of the players is always lacking. The fact that it often involves underage players is disturbing. The hidden nature of games of chance is particularly problematic in the case of children. If not properly intervened, games of chance in video games will cause great damage to people, families and society."28

20 MBMMaverick, (2017). Seriously? I paid 80$ [sic] to have Vader locked?. Reddit. https://goo.su/zw33

21 Ibid.

22 Baculi, S. (2019, September 11). EA's Response to Star Wars Battlefront II Microtransaction Complaint Recognized by Guinness World Records as "Most-Downvoted Comment on Reddit". Bounding into Comics. https://clck.ru/3A9dzX

23 Corden, J. l (2018, November 21). Confirmed: EA has removed all microtransactions from Star Wars Battlefront II (update). Windows Centra. https://clck.ru/3A9e25

24 Kim, M. (2019, August 27). Star Wars Battlefront 2 Loot Box Controversy: 'We Hit Rock Bottom,' EA DICE Says. IGN. https://clck.ru/3C4D37

25 (25 April 2018). Loot boxen in drie videogames in strijd met kansspelwetgeving. Koen Geens. (Translated from Dutch to English). https://clck.ru/3A9e2Z

26 Ibid.

27 Ibid.

28 Ibid (translated from Dutch to English).

"The investigated games with paying loot boxes, as they are currently offered in our country, are therefore in violation of the legislation on games of chance and can be dealt with under criminal law. The loot boxes must therefore be removed. If not, the operators risk a prison sentence of up to five years and a fine of up to 800,000 euros. When minors are also involved, those sentences can be doubled"29.

As at time of publication, Belgium is the only jurisdiction in Europe to have unambiguously outlawed the use of loot boxes.

3.2. Netherlands

The ongoing debate on loot boxes in the Netherlands can be traced back to 2019, when the Netherlands Gaming Authority imposed a €5 million civil penalty on EA, the developer of the FIFA series, for violation of the Dutch Gambling Act30. In a media release discussing the infringement, the Authority described FIFA's loot box system as: "...determined by chance, the contents [of which] cannot be influenced. The fact that [the contents] sometimes have a high value and that they can occasionally be traded constitutes a violation of the Gambling Act. Under Dutch law, a game of chance that allows a prize or premium to be won can only be provided if a relevant licence has been granted"31.

The Authority's enforcement efforts were based on a 2018 study it undertook which found a correlation between playing games containing loot boxes and gambling addiction32. The Authority imposed a policy of "strict separation between gaming and gambling".

EA promptly challenged the penalty before the District Court of the Hague, which ruled in favour of the Authority on 15 October 202033. EA contended that while 'pack' openings were luck-based, the openings were encapsulated within a broader game of skill, the overall game of FIFA. It further contended that the players obtained from packs were not directly convertible to money as required under Dutch gambling law. The Court resoundingly rejected these arguments, opining that the game mode within FIFA which utilised loot box mechanics could be viewed in its own right, distinct from the rest of the game.

On appeal, the Dutch Council of State overturned the District Court's decision, finding that the game mode involving pack openings was not a distinct game34. The Council found this view impossible to maintain as obtaining players through pack openings were a necessary venture to build a team to play competitive matches, and was therefore

29 Ibid (translated from Dutch to English).

30 Wet op de kansspelen, Artikel 33f(1).

31 (2020, October 29). Imposition of an order subject to a penalty on Electronic Arts for FIFA video game. Kansspelautoriteit. https://clck.ru/3A9e5i

32 Ibid.

33 Electronic Arts Swiss Société à responsabilité limitée en de raad van bestuur van de Kansspelautoriteit (2020) AWB-20_3038.

34 Raad van State, Uitspraak 202005769/1/A3, ECLI:NL:RVS:2022:690.

an inherent part of the broader game which was not a game of chance under Dutch gambling law. In a judgment that could guide future loot box regulation around the world, the Council identified criteria which, if satisfied, would mean the video game in question falls outside the scope of the Dutch Gambling Act: a) The loot box mechanic is part of a broader game; b) the broader game is a game of skill; c) the loot boxes are earned and opened in the game, not on a separate platform; and d) the loot boxes in the game are mostly obtained by playing the game organically (without necessarily using real currency).

As at time of publication, the Dutch Government has communicated its willingness to agitate for a ban on loot boxes under European Union law35.

3.3. Spain

Spain's Ministry of Consumer Affairs announced its interest in regulating loot boxes on 1 July 2022 by publishing a draft law seeking to impose strict consumer protections on games which contained randomised reward mechanisms.36 The law proposes to treat video games containing loot boxes almost identically to gambling, imposing measures such as identity verification to ensure users are of age,37 banning advertisements outside the hours of 1am and 5am,38 publication of probability rates of receiving each potential reward (i. e. drop rates),39 mandatory implementation of a self-exclusion system,40 and predetermined spending limits.41 Breaches of these measures would be punishable by fine ranging from €200,000 to €5,000,000 per infraction and potential shut down of the game's loot box offering42.

Most notably, the draft law expressly precludes licenced gambling operators from using loot box mechanics in any service or product offerings43. This prohibition extends to preclude organisations who market traditional gambling products as third-parties from doing the same in relation to loot box-related products44. This approach, in combination with the aforementioned gambling-like harm minimisation measures, would make Spain the toughest regulatory environment for loot box products.

35 (2023, June 29). Consumentenagenda minister Adriaansens: aanpak deurverkoop, eenvoudig online opzeggen. Rijksoverheid. https://clck.ru/3A9e8L

36 Ministerio de Consumo. Anteproyecto de Ley por el que se regulan los mecanismos aleatorios de recompensa asociados a productos de software interactivo de ocio. https://clck.ru/3A9e8q

37 Ibid. P. 9.

38 Ibid. P. 10.

39 Ibid. P. 11.

40 Ibid. P. 12.

41 Ibid.

42 Ibid. P. 15.

43 Ibid. P. 16.

44 Ibid.

3.4. United Kingdom

As early as 2016, the UK Gambling Commission expressed its concern about the potential risks of loot boxes to children and young people, resulting in the publication of its Virtual currencies, eSports and social casino gaming position paper45. While the Gambling Commission had already utilised its compliance powers in relation to skin gambling websites46, it opined that it held no powers in cases where loot box rewards were not clearly redeemable for real currency47.

Unwilling to accept the status quo, both House of Commons Digital, Culture, Media and Sport Committee48 and the House of Lords Select Committee on the Social and Economic Impacts of the Gambling Industry49 called for the Gambling Act 2005 to be amended to bring loot boxes within the scope of the UK's gambling regulatory framework.50 In a review of the Gambling Act undertaken in response to calls for reform, the UK Government acknowledged the potential harms associated with loot boxes in video games, but was unwilling to scope them into the Gambling Act in the absence of clear academic evidence establishing a causal link between loot box spending and problem-gambling51. The Government expressly stated that pending greater research on the harms of loot boxes, its position would be kept under review52.

Notwithstanding its legislative inaction, the UK Government made two recommendations on the treatment of loot boxes: 1) that children or young people should not be able to purchase loot boxes without the consent of a parent or guardian, and 2) that all players should have access to spending controls and transparent information in the name of safe gameplay53. These recommendations ultimately led to a self-regulation approach by the industry in July 2023, which published a set of 'Industry Principles' purported to improve protections for players54. The Principles include the disclosure of drop rates, targeting of unauthorised third-party websites fostering the sale of items, a commitment to "lenient" refund policies,

45 Gambling Commission. (2017, March). Virtual currencies, eSports and social casino gaming - position paper. https://clck.ru/3A9eBu

46 Gambling Commission. (2017, February 6). Two men convicted after offering illegal gambling parasitic upon popular FIFA computer game. https://clck.ru/3A9eCc

47 Gambling Commission. (2017, November 24). Loot boxes within video games. https://clck.ru/3A9eDE

48 (2019, 12 September). House of Commons Digital, Culture, Media and Sport Committee. Immersive and addictive technologies. https://clck.ru/3A9eDr

49 House of Lords. Select Committee on the Social and Economic Impact of the Gambling Industry. (2020, July 2). Gambling Harm - Time for Action. https://clck.ru/3A9eEs

50 Gambling Act 2005 (UK).

51 (2022, July 18). Department for Digital, Culture, Media & Sport, Government response to the call for evidence on loot boxes in video games. https://clck.ru/3A9eG4

52 Ibid.

53 Ibid.

54 UKIE, New Principles and Guidance on Paid Loot Boxes. https://goo.su/me0Y3

and a 12-month review of the effectiveness of the Principles in collaboration with the Government55.

As the Principles have only been in place for a few weeks as at time of publication, it remains to be seen whether a self-regulation model is an effective measure in reducing the harms of loot box mechanics.

3.5. Finland

Regulatory interest has similarly arisen in Finland. In September 2022, Sebastian Tynkkynen of the Finish Parliament introduced a bill to regulate loot boxes as a form of gambling56. The bill would amend the definition of 'lottery' under the Finnish Lotteries Act 2001 to include "virtually utilisable profits", i.e. items with only a virtual value57. The change would scope in loot boxes as a form of gambling under existing gambling laws, even in cases where obtainable in-game items cannot be sold externally or be exchanged for real currency. This places Finland in a league of its own among the EU in which exchangeability for real currency was the saving grace for developers in other jurisdictions. It would also make Finland's loot box regulations the most difficult to circumvent given the breadth of its application.

3.6. China

The video game regulatory environment in China is complex. Underlying concerns of addiction which gave rise to China's console ban in the 2000s have manifested a series of other regulatory requirements; inter alia, games cannot depict obscenity or nudity, 'scary' scenes or images, glorification of war or crime, slandering of cultural traditions, or promotion of drug use or drug trafficking58. Adherence to these requirements is overseen by China's State Administration of Publication, Press, Radio, Film and Television (SAPPRFT).

Shortly after the disbandment of its video game console ban, China moved to regulate loot boxes citing similar concerns about Star Wars Battlefront II as the Belgian Government. China's Ministry of Culture imposed heavy limitations on the use of loot boxes on 1 May 2017, barring loot boxes from being purchased with real currency (or virtual currency purchased with real currency), mandating the disclosure of drop rates, and further mandating that developers publicly disclose player spending for the previous 90 days59.

55 Ibid.

56 LA 42 /2022 vp, Bill to amend Section 2 of the Lotteries Act 2001.

57 Heilbuth, H. (2022, December 15). Exploring Finland's proposed loot box regulation. GamesIndustry.Biz. https://clck.ru/3A9eQv

58 Kuhns, T. (2016, May 24). Mobile Game Content Standard (2016 Edition). AppInChina. https://clck.ru/3A9eRa

59 Tang, T. (2018, May 16). A Middle-Ground Approach: How China Regulates Loot Boxes And Gambling Features In Online Games. Mondaq. https://clck.ru/3A9eYS

As traditional gambling is unlawful in China, loot box mechanisms are subject to further restrictions designed to keep loot box use from constituting gambling. As the regulatory body for game content and approval, SAPPRFT does not approve the release of any game which contains a 'compulsion loop' - any mechanism designed to lead a player to the use of loot boxes (or any gambling-like system)60. For example, if a certain item can only be obtained through opening loot boxes, the game is unlikely to be approved by SAPPRFT. This means that aspects of a game containing loot boxes may bar it from publication in China.

3.7. Japan

Japan was the first jurisdiction to regulate loot box mechanics. The nation has long been host to 'gacha' games - a typically free-to-play game, especially mobile game, which induces players to spend money (both in-game and real) to acquire specific items or characters to progress the storyline61. On 18 May 2012, the Japanese Consumer Affairs Agency declared "complete gacha" games illegal - a form of gacha game in which complete sets need to be collected before the player can progress62. The Agency cites "extremely high charges imposed on players" and complaints received in relation to such charges63.

Notably, at the time of the Agency's announcement, several of the biggest complete gacha developers had already ceased their use of the mechanic64. Developers expressed differing reasons for cessation, including sub-par sales numbers of their gacha game65, a preference for industry self-regulation66, and an expectation that impact of the ban to revenue will be minimal67.

3.8. Republic of Korea

Like China, South Korea has a demonstrated history of video game regulation. Its Youth Protection Revision Act, dubbed 'Shutdown Law', made international news in 2011 when it banned children under the age of sixteen to play online video games between the hours of midnight and 6am (Sang et al., 2017). This curfew was compounded in 2012 when

60 Ibid.

61 (2023, August 20). Gacha. Wiktionary. https://clck.ru/3A9ixg

62 Gantayat, A. (2012, May 18). Complete Gacha Officially Deemed Illegal. Andriasang. https://clck.ru/3A9eZZ

63 (2012, May 6). 'Kompu gacha' online games may be illegal. The Yomiuri Shinbun. https://goo.su/Z2k9Q

64 Gantayat, A. (2012, May 18). Complete Gacha Officially Deemed Illegal. Andriasang. https://clck.ru/3A9ebn

65 Gantayat, A. (2012, May 10). DeNA and GREE Stock Values Plummet Following Reports of Government Regulation. Andriasang. https://clck.ru/3A9edQ

66 Gantayat, A. (2012, May 9). Social Game Maker KLab Puts Halt to Complete Gacha Sales. Andriasang. https://clck.ru/3A9eeT

67 Gantayat, A. (2012, May 8). Analysts Expect Major Social Game Losses if Sales Tactics is Banned. Andriasang. https://clck.ru/3A9efC

further legislation was introduced to require large gaming companies to implement a selection system of game availability period - a technical name for what is effectively a customisable parental curfew option68. To date, only China and Vietnam have imposed similar restrictions69.

By early 2021, the Shutdown Law was being reconsidered in light of significant logistical issues in its enforceability70. On a separate front, calls to regulate online games for deceptive use of loot boxes were growing71. These calls were catalysed by controversy surrounding the use of loot boxes in MapleStory, a highly popular Korean MMORPG72. While loot boxes typically offer a random in-game item, MapleStory players could acquire three randomly chosen 'abilities'. The games developer, Nexon, admitted that it was impossible to hit a 'jackpot' (i.e. three very powerful abilities) through this mechanic; the mechanic was designed to prevent the most powerful abilities from appearing simultaneously73. Backlash and an investigation by Korea's Fair Trade Commission resulted in Nexon refunding the previous two years of loot box purchases - the period for which Nexon had kept purchase logs74.

A day after Nexon's announcement to provide refunds, the Korea Game Industry Association announced a new set of regulations requiring probability disclosure of random chance events resulting in improvement to character abilities, skills, or equipment upgrades -not just the acquisition of items75. Unsatisfied with industry self-regulation, the National Assembly of South Korea passed an amendment to the Game Industry Promotion Act on 27 February 2023, almost unanimously, mandating the disclosure of loot box probability rates in game, on the game's official website, and advertisements76. Failure to disclose rates, or doing so falsely, is now punishable by fine of up to W20 million ($15,000 USD) or imprisonment for up to two years77.

68 Tassi, P. (2012, July 2). New Korean Law Lets Parents Decide When Their Kids Can Play Games. Forbes. https://clck.ru/3A9ejW

69 (2023, August 9). Shutdown Law. Wikipedia. https://clck.ru/3A9ek3

70 (2021, November 16). Shutdown law shuttered. Korea Herald. https://clck.ru/3A9eke

71 K. Byung-wook. (2021, March 9). Game firms under increasing scrutiny over loot box odds. Korea Herald. https://clck.ru/3A9s2F

72 Ibid.

73 Ibid.

74 Maple Story. (2021, May 28). (Compensation payment completed) We apologize for not meeting the customer's expectations in the process of disclosing the cube probability. https://clck.ru/3A9emF

iНе можете найти то, что вам нужно? Попробуйте сервис подбора литературы.

75 Min-Je, P. (2021, May 29). Game association introduces own loot box disclosure rules. Korea JoongAng Daily. https://clck.ru/3A9emd

76 Mi-hee, K. (2023, February 27). Stochastic Item Information Disclosure Act, passed the plenary session of the National Assembly. GameMeca. https://clck.ru/3A9eqz

77 Obedkov, E. South Korea passes new amendment on loot box probability disclosure. Game World Observer. https://clck.ru/3A9eru

3.9. Germany

In March 2021, the national parliament of Germany passed amendments to the Jugendschutzgesetz (Protection of Young Persons Act) to strengthen protections for children and young people relating to media content78. The changes included an update to the German video game classification standards to allow consideration of 'interaction risks', including, inter alia, the presence of loot boxes and other in-game purchases79.

The German age classification board, Unterhaltungssoftware Selbstkontrolle (USK), ratified the law into its procedural guidelines from 1 January 202380. In its communications, USK highlighted the inclusion of "possible online risks - such as purchasing or communication options" in the classification of newly submitted digital games81. Under the new rules, a higher age rating would be appropriate for a game if it could "impair the development of children and young people or their upbringing to become self-reliant and socially competent personalities"82. It further states: "The participation of minors in games of chance is strictly prohibited, as this is part of the medically recognized clinical picture of a gambling addiction with serious psycho-social consequences and significant financial risks for those affected... If digital games are not subject to the statutory ban on gambling, the age classification of digital games must take into account. that [they] are likely to impair or endanger the personality development of children or young people with regard to their attitude to gambling. In particular, this is game content that can lead to habituation to or trivialization of gambling by promoting a positive attitude towards gambling, contributing to desensitization to gambling losses or causing unrealistic profit expectations"83.

3.10. Canada

In September 2020, two men filed a class action claim against EA in the Supreme Court of British Columbia84. The suit contended that EA's use of loot boxes in dozens of its games put it in violation of British Columbia's consumer protection laws85 and the gambling

78 Puppe, M. (2021, March 10). German Bundestag passes new Youth Protection Act. The German Games Industry Association. https://clck.ru/3A9iuW

79 Ibid.

80 (2022, December 14). In-game purchases, chats and loot boxes: USK expands test criteria. Unterhaltungssoftware Selbstkontrolle. https://clck.ru/3A9is6

81 Ibid (translated from German to English).

82 (2022, December). Unterhaltungssoftware Selbstkontrolle, Guiding criteria of the USK for the evaluation of youth protection law digital games, 8 (translated from German to English). https://clck.ru/3A9isY

83 Ibid 23 (translated from German to English).

84 Sutherland v Electronic Arts Inc. (2020, September 30). Vancouver S-209803 (BCSC) (Plaintiff's Notice of Civil Claim). https://clck.ru/3A9evu

85 Business Practices and Consumer Protection Act [SBC 2004].

provisions within the federal Criminal Code86. Judge Fleming held on March 2023 that while the consumer protection claim may proceed, the claim in respect of the Criminal Code could not. The Judge opined that loot box rewards in EA's game offerings could only be exchanged using the in-game marketplace and that in the absence of "[the] prospect of gaining, or losing, anything with a real-world value", the claim had no reasonable prospects of success87. The firm representing the plaintiffs in Sutherland has filed class-actions against dozens of video game companies in British Columbia and Quebec88. Accordingly, the judicial, regulatory, and social consequences of these actions remains to be seen.

3.11. Australia

Australian Member of Parliament Andrew Wilkie introduced a private member's bill on 28 November 2022 to amend the Classification (Publications, Films and Computer Games) Act 199589. The bill would have required the Australia Classification Board to classify computer games which contain loot boxes as either R 18+ or RC (Refused classification, barring the product from sale, rent, advertising or importation into Australia), and require a warning to displayed when games contain loot boxes or similar features, similar to Germany's amended classification standards90. As at 1 August 2023, the bill was removed from the parliamentary agenda as it had not progressed within the time required by parliamentary rules91.

4. Challenges to Implementation 4.1. Challenging the Status Quo

Loot boxes in their current form are often considered akin to traditional gambling92. However, there still appears to be resistance against categorising loot box mechanics as gambling in most jurisdictions. Bases for this resistance vary, but the commonality among them appears to be an unwillingness to consider something to be gambling simply

86 Criminal Code, RSC 1985, c C-46, Part VII.

87 Dring, Ch. (2023, March 21). Canada Judge rejects unlawful gambling accusation in EA loot box lawsuit. GamesIndustry.Biz. https://clck.ru/3A9exW

88 Loot Boxes Class Action Lawsuits - Canada. Slater Vecchio LLP. https://clck.ru/3A9eyM

89 Classification (Publications, Films and Computer Games) Act 1995 (Cth).

90 Classification (Publications, Films and Computer Games) Amendment (Loot Boxes) Bill 2022. Parliament of Australia. https://goo.su/NkJWUmp

91 Ibid.

92 Moar, J., & Hunt, N. (2021, March 9). 'Video Game Loot Boxes to Generate Over $20 Billion in Revenue by 2025. Juniper Research. https://clck.ru/3A8Xn6

because it does not look, on face value, to be traditional gambling, notwithstanding the accepted definition of gambling having been met.

For example, Australian regulatory bodies have opted against regulating loot boxes under existing gambling laws on the basis that the obtainable rewards did not consist of real currency, nor was there a facility or method available to directly convert the rewards obtained into real currency93. While this interpretation may have been accurate in the early days of loot boxes, the stance fails to account for the sale value of in-game items within the gaming ecosystem, as well as the growing ubiquity of buy/swap/sell and gambling websites designed to trade or stake loot box rewards (i.e. skin gambling) (Greer et al., 2023). Most of these third-party websites openly market themselves as 'gambling' or 'slots' websites, offering inducements almost identical to those used by traditional online betting sites (Deans et al., 2017).

Eilers & Krejcik estimate that roughly 3 million people wagered $2.3 billion worth of skins on the outcome of e-sports games in 201594. They also estimates that $5 billion worth of skins were wagered in 2016, with roughly 60% of this amount being wagered on "casino-style gaming" websites95. These websites are generally targeted towards minors, often partnering with video game personalities and influencers to promote the service to their audience96. Skin gambling websites have also sponsored or managed their own e-sports teams, raising concerns about advertising to adolescent viewers and potential for match fixing97.

Moreover, Hing et al argue that the 'real currency' requirement by regulators is not fit-for-purpose given that the harms caused can occur regardless of whether the rewards can be exchanged for real currency or not (Hing et al., 2023a). The psychological attractiveness of loot box mechanics does not require rewards to be financial, but simply something that is of perceived value. This could be an in-game weapon of high strength, a purely cosmetic item (i.e. skin), or any other socially-endorsed indicator of success. This argument is supported by findings of a 2023 study in which adolescents who engaged in simulated gambling in video games transitioned from valuing its virtual prizes to valuing its social benefits and the opportunity to learn new gambling games, compete against other players, and demonstrate skill (Hing et al., 2023b).

93 Nettleton, J. & Chong, K. (2013, October 16). Online social games - the Australian position. https://goo.su/ tuWnN

94 Brustein, J. & Novy-Williams, E. (2016, April 20). Virtual Weapons are Turning Teen Gamers into Serious Gamblers. Bloomberg. https://goo.su/lnjzto

95 Assael, Sh. (2017, January 20). Skin in the Game. ESPN. https://goo.su/dMvYMsR

96 Sacco, D. (2016, July 4). Syndicate apologises after failing to disclose ownership of CSGO Lotto gambling site. Esports News UK. https://goo.su/fGi5t

97 Wynne, J. (2015, September 15). Popular betting website to sponsor pro Counter-Strike team. Dot eSports. https://clck.ru/3A9fJp

4.2. Industry Transparency and Insight

In their 2021 Juniper Research report, James Moar and Nick Hunt stated, "we expect to see game publishers react to [increased regulatory action against loot boxes] in future by changing loot box formats, in order to keep them compelling and outside the legal realms of gambling"98. To some extent, this expectation has come to fruition. In China, for example, Blizzard, one of the largest video game developers in the world, circumvented the Chinese ban on the sale of loot boxes by selling in-game currency for real currency, with which it gave players 'free' loot boxes as part of the transaction99. As at the time of publication, no enforcement action has been taken on this overt circumvention of the law.

Adding to the lack of transparency is the unwillingness of developers to provide loot box-related data for inquiry. Etchells et al. (2022) highlight the need for further research on the relationship between loot box spending and player wellbeing but emphasise the need for researchers to be given access to relevant industry data to accomplish this. Pronouncements of the 'gamblification' of video games by academics provides the ideal platform for the industry to garner good will by working with researchers, health and community workers, and other stakeholders to achieve wellbeing outcomes (Greer et al., 2023). Conversely, industry players may be unwilling to undertake consultations if it could lead to additional regulation which could result in diminished profits. Some positive representation has been seen in this space, however, with Valve, one of the biggest gaming companies in the world, recently making it a bannable offence for users to partake in running contests, gambling, or selling items100.

4.3. Enforceability

The recency of the loot box regulation activity around the world poses difficulty in assessing their effectiveness. In respect of Belgium's regime, one of the earliest jurisdictions to impose restrictions on loot boxes, poor enforcement of its loot box ban has been identified. Xiao found that 82 % of the 100 high-grossing iPhone games in the Belgium App Store continued to use some form of randomised monetisation method, including 80.2 % of games rated suitable for ages 12+ (2023). This was in spite of some high-profile developers entirely removing random chance mechanics from games marketed in Belgium101 and the Belgium

98 Moar, J., & Hunt, N. (2021, March 9). 'Video Game Loot Boxes to Generate Over $20 Billion in Revenue by 2025. Juniper Research. https://clck.ru/3A8Xn6

99 Handrahan, M. (2017, June 6). Blizzard avoids China's loot laws by selling Overwatch in-game currency. GamesIndustry.biz. https://clck.ru/3A9fPN

100 Biazzi, L. (2023, May 11). Valve launches offensive against gamblers on Steam, possibly affecting CS:GO's skin market. Dot Esports. https://clck.ru/3A9fPz

101 Statement Belgium. 2k Games. https://goo.su/qsuW

Gaming Commission's threats to criminally prosecute video game companies using loot boxes without a gambling licence102.

In the same study, Xiao found that the use of a virtual private network (VPN) proxy allowed players to access loot box offerings which had otherwise been removed from the Belgium version of a mobile game. In a study of the effectiveness of the UK's ban on access to pornography by minors, Thurman and Obster found that 46 % of 16 and 17 year olds had used a VPN or private browser to access pornographic websites which otherwise would have required the satisfaction of an age-verification check (2021)103. In a separate study undertaken by VPN provider ExpressVPN, 24 % of respondents admitted to lying about their age to use social media (which typically have a minimum age requirement of 13)104. 16% also stated that they had lied about their address or location105. From a regulatory standpoint, enforceability of loot box regulations therefore requires focus on both the developer and consumer's conduct.

Conclusions

This paper provided a comprehensive examination of the need for legal regulation of loot boxes in video games. By analysing the commentary on regulatory approaches taken in various jurisdictions, a foundation for understanding the potential negative impacts of loot boxes on consumers was established, particularly in relation to children and young adults. The concerns raised in this paper support the argument that stringent government regulation is necessary to protect consumers, promote industry transparency and accountability, and ensure the ethical and responsible use of loot box mechanics. By implementing effective regulatory measures, policymakers can strike a balance between innovation in the gaming industry, consumer protection, and user wellbeing, ultimately fostering a healthier environment for gamers.

This paper analysed a variety of approaches in the regulation or proposed regulation of loot box mechanics in video games. Some have assessed whether loot boxes fall within the definition of 'gambling' under existing legislation in their respective jurisdiction. In the case of Belgium and the Netherlands, regulators determined this test in the affirmative, despite judicial review negating the determination in the case of the latter. Comparatively,

102 Belgian Gaming Commission. (2018, April). Research report loot boxes., 18 (Translated from Dutch to English). https://goo.su/qsuW

103 Thurman, N. & Obster, F. (2021). The regulation of internet pornography: What a survey of under-18s tells us about the necessity for and potential efficacy of emerging legislative approaches. Policy Internet, 13(3), 415.

104 (2023, January 19). Dangers of social media for kids and how to protect them. ExpressVPN. https://goo. su/Ks8N1JT

105 Ibid.

cases like Australia demonstrate that the understanding of the subject matter by regulators, or lack thereof, can have a fundamental impact on political appetite for regulation.

Other jurisdictions have taken an educative approach to regulation. Germany's approach for example results in consumers (and in the case of minors, their guardians) being more informed about the presence of loot boxes in products. More detailed yet is the approach taken by China and Korea, in which probability rates of all loot boxes, including ones which reward things other than items, must be displayed to the player. If this approach is demonstrated to be an effective way to reduce loot box or gambling-related harm to players, more jurisdictions may choose to take this lighter-handed approach to harm-minimisation, avoiding the need for a limitation or ban on loot boxes.

It requires reiterating that most regulatory measures analysed in this paper have yet to be reviewed for their effectiveness. As a result, one focus of future research would be the assessment of these measures on not only their impact on loot box consumption, but their flow on impact on player wellbeing, mental health, and finances. For the purposes of undertaking this assessment, the author further reiterates the need for developers and industry stakeholders to make available loot box purchase and use data to independent researchers.

Another aspect of loot box regulation which was alluded to in this paper, but did not form part of its primary focus, is the status of skin gambling websites under the law. Analysis of the relationship between loot box use and skin gambling could establish the 'exchangeability with real currency' element required by several jurisdictions to consider loot boxes under existing gambling laws. Moreover, the combined impacts of loot box use and skin gambling should be investigated. In theory, their combined use could have an amplified psychological or financial impact on consumers.

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Hing, N., Russell, A. M., King, D. L., Rockloff, M., Browne, M., Newall, P., & Greer, N. (2023a). Not all games are created equal: Adolescents who play and spend money on simulated gambling games show greater risk for gaming disorder. Addictive Behaviors, 137, 107525. https://doi.org/10.1016Zj.addbeh.2022.107525 King, D. L., & Delfabbro, P. H. (2018). Predatory monetization schemes in video games (eg 'loot boxes') and

internet gaming disorder. Addiction, 113(11), 1967-1969. https://doi.org/10.1111/add.14286 Liao, S. X. (2016). Japanese console games popularization in China: Governance, copycats, and gamers. Games

and Culture, 11(3), 275-297. https://doi.org/10.1177/1555412015583574 Primi, C., Sanson, F., Vecchiato, M., Serra, E., & Donati, M. A. (2022). Loot boxes use, video gaming, and gambling in adolescents: Results from a path analysis before and during COVID-19-pandemic-related lockdown in Italy. Frontiers in psychology, 13, 1009129. https://doi.org/10.3389/fpsyg.2022.1009129 Rockloff, M., Russell, A. M., Greer, N., Lole, L., Hing, N., & Browne, M. (2021). Young people who purchase loot boxes are more likely to have gambling problems: An online survey of adolescents and young adults living in NSW Australia. Journal of Behavioral Addictions, 10(1), 35-41. https://doi.org/10.1556/2006.2021.00007 Sang, Y., Park, S., & Seo, H. (2017). Mobile Game Regulation in South Korea: A Case Study of the Shutdown Law. In D. Jin (Eds.). Mobile Gaming in Asia. Mobile Communication in Asia: Local Insights, Global Implications (pp. 55-72). Springer, Dordrecht. https://doi.org/10.1007/978-94-024-0826-3_4 So, Sh., & Westland, J. Ch. (2012). Red Wired: China's Internet Revolution. Marshall Cavendish. Staddon, J. E. R, & Cerutti, D. T. (2003). Operant conditioning. Annual Review of Psychology, 54, 115-144.

https://doi.org/10.1146/annurev.psych.54.101601.145124 Thurman, N., & Obster, F. (2021). The regulation of internet pornography: What a survey of under-18s tells us about the necessity for and potential efficacy of emerging legislative approaches. Policy & Internet, 13(3), 415-432. https://doi.org/10.1002/poi3.250 Xiao, L. Y. (2023). Breaking Ban: Belgium's ineffective gambling law regulation of video game loot boxes. Collabra:

Psychology, 9(1), 57641. https://doi.org/10.1525/collabra.57641 Zendle, D., & Cairns, P. (2019). Video game loot boxes are again linked to problem gambling: Results of a large-

scale survey. PLoS ONE, 14(3), e0214167. https://doi.org/10.1371/journal.pone.0214167 Zendle, D., Meyer, R., & Ballou, N. (2020b). The changing face of desktop video game monetisation: An exploration of exposure to loot boxes, pay to win, and cosmetic microtransactions in the most-played Steam games of 2010-2019. PloS ONE, 15(5), e0232780. https://doi.org/10.1371/journal.pone.0232780 Zendle, D., Meyer, R., Cairns, P., Waters, S., & Ballou, N. (2020a). The prevalence of loot boxes in mobile and

desktop games. Addiction, 115(9), 1768-1772. https://doi.org/10.1111/add.14973 Zuriff, G. E. (1970). A comparison of variable-ratio and variable-interval schedules of reinforcement. Journal of the Experimental Analysis of Behavior, 13(3), 369-374. https://doi.org/10.1901/jeab.1970.13-369

Author information

Seppy Pour - LLB (Hons), BA, LLM, Principal Consultant, Kun Consulting Group

Address: NSW 2006, Sydney, Australia

E-mail: seppypour@gmail.com

ORCID ID: https://orcid.org/0000-0001-9032-062X

Conflicts of interest

The author declares no conflict of interest.

Financial disclosure

The research had no sponsorship.

Thematic rubrics

OECD: 5.05 / Law PASJC: 3308 / Law WoS: OM / Law

Article history

Date of receipt - August 25, 2023 Date of approval - September 20, 2023 Date of acceptance - June 25, 2024 Date of online placement - June 30, 2024

BKijriB Научная статья ^ , удк з4:оо4:347.21:004.4

EDN: https://elibrary.ru/uxqado HSHii D0I: https://doi.org/10.21202/jdtl.2024.18

3

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Опыт правового регулирования лутбоксов в различных странах: сравнительный анализ

Сэппи Пор ф

Группа компаний «Кун Консалтинг», Сидней, Австралия

Ключевые слова

азартные игры, видеоигры, виртуальный товар, защита прав потребителей, игровая индустрия, лицензирование, лутбокс, право,

сравнительное правоведение, цифровые технологии

Аннотация

Цель: показать как использование новой бизнес-модели, получившей название лутбоксов и лежащей в основе современных видеоигр, стало правовой проблемой для юрисдикций разных стран.

Методы: опираясь на существующую литературу и современные источники, в статье раскрываются потенциальные негативные последствия использования лутбоксов, проводится комплексный анализ действующего или предлагаемого регулирования, а также сравнение подходов, применяемых в различных национальных юрисдикциях. Результаты: в данной статье рассматривается растущая обеспокоенность вокруг широкого распространения особой формы внутриигровых покупок называемой лутбоксами. Она подвергается резкой критике на том основании, что лутбоксы предположительно являются своего рода азартной игрой в составе видеоигры. Исходя из этого, в данной статье приводятся аргументы в пользу их законодательного регулирования. Изучив нормативно-правовую базу в странах, которые уже приняли меры против использования лутбоксов, таких как Бельгия, Нидерланды, Китай, Япония и Республика Корея, а также в странах, где в настоящее время обсуждается вопрос их регулирования, подчеркивается необходимость принятия мер по защите потребителей в игровой индустрии. Особенно это относится к уязвимым слоям населения, подверженных вредным последствиям, связанным с азартными играми. Кроме того, отмечается необходимость обеспечения этичного и ответственного использования лутбоксов, а также снижения рисков для здоровья и финансовых рисков, связанных с использованием данной бизнес-модели.

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Научная новизна: в работе представлено сравнительное исследование проблем действующего или проектируемого социального регулирования лутбоксов в видеоиграх, решение которых предлагается искать на основе баланса между инновациями в игровой индустрии, защитой потребителей и благополучием пользователей, что в конечном итоге будет способствовать созданию более здоровой среды для геймеров.

© Пор С., 2024

Статья находится в открытом доступе и распространяется в соответствии с лицензией Creative Commons «Attribution» («Атрибуция») 4.0 Всемирная (CC BY 4.0) (https://creativecommons.Org/licenses/by/4.0/deed.ru), позволяющей неограниченно использовать, распространять и воспроизводить материал при условии, что оригинальная работа упомянута с соблюдением правил цитирования.

Практическая значимость: представленное исследование подчеркивает международный масштаб рассматриваемой проблемы, различие принятых в странах регулятивных мер юридического и этического характера, направленных на решение психологических, социальных и финансовых последствий, связанных с распространением лутбок-сов в видеоиграх, оценку которым еще предстоит дать в дальнейшем с учетом полученных данных в отрасли игровой индустрии.

Для цитирования

Пор, С. (2024). Опыт правового регулирования лутбоксов в различных странах: сравнительный анализ. Journal of Digital Technologies and Law, 2(2), 345-371. https://doi.org/10.21202/jdtl.2024.18

Список литературы

Brenner, R., & Brenner, G. A. (1990). Gambling and speculation: A theory, a history, and a future of some human

decisions. Cambridge University Press. Deans, E. G., Thomas, S. L., Derevensky, J., & Daube, M. (2017). The influence of marketing on the sports betting attitudes and consumption behaviours of young men: implications for harm reduction and prevention strategies. Harm Reduction Journal, 14, 1-12. https://doi.org/10.1186/s12954-017-0131-8 Devereux, E. (1979). Gambling. In The International Encyclopedia of the Social Sciences (vol. 17). New York: Macmillan.

Drummond, A., & Sauer, J. D. (2018). Video game loot boxes are psychologically akin to gambling. Nature human

behaviour, 2(8), 530-532. https://doi.org/10.1038/s41562-018-0360-1 Drummond, A., Hall, L. C., & Sauer, J. D. (2022). Surprisingly high prevalence rates of severe psychological distress among consumers who purchase loot boxes in video games. Scientific Reports, 12(1), 16128. https://doi.org/10.1038/s41598-022-20549-1 Etchells, P. J., Morgan, A. L., & Quintana, D. S. (2022). Loot box spending is associated with problem gambling but not mental wellbeing. Royal Society Open Science, 9(8), 220111. https://doi.org/10.1098/rsos.220111 Gong, L., & Rodda, S. N. (2022). An exploratory study of individual and parental techniques for limiting loot box consumption. International Journal of Mental Health and Addiction, 20, 398-425. https://doi.org/10.1007/ s11469-020-00370-5

Greer, N., Rockloff, M., Hing, N., Browne, M., & King, D. L. (2023). Skin gambling contributes to gambling problems and harm after controlling for other forms of traditional gambling. Journal of Gambling Studies, 39, 225-247. https://doi.org/10.1007/s10899-022-10111-z Griffiths, M. D. (1995). Adolescent gambling. London: Routledge.

Hing, N., Lole, L., Thorne, H., Sproston, K., Hodge, N., & Rockloff, M. (2023b). 'It Doesn't Give Off the Gambling Vibes... It Just Feels Like a Part of the Game': Adolescents' Experiences and Perceptions of Simulated Gambling While Growing Up. International Journal of Mental Health and Addiction. https://doi.org/10.1007/ s11469-023-01119-6

Hing, N., Russell, A. M., King, D. L., Rockloff, M., Browne, M., Newall, P., & Greer, N. (2023a). Not all games are created equal: Adolescents who play and spend money on simulated gambling games show greater risk for gaming disorder. Addictive Behaviors, 137, 107525. https://doi.org/10.1016/j.addbeh.2022.107525 King, D. L., & Delfabbro, P. H. (2018). Predatory monetization schemes in video games (eg 'loot boxes') and

internet gaming disorder. Addiction, 113(11), 1967-1969. https://doi.org/10.1111/add.14286 Liao, S. X. (2016). Japanese console games popularization in China: Governance, copycats, and gamers. Games

and Culture, 11(3), 275-297. https://doi.org/10.1177/1555412015583574 Primi, C., Sanson, F., Vecchiato, M., Serra, E., & Donati, M. A. (2022). Loot boxes use, video gaming, and gambling in adolescents: Results from a path analysis before and during COVID-19-pandemic-related lockdown in Italy. Frontiers in psychology, 13, 1009129. https://doi.org/10.3389/fpsyg.2022.1009129 Rockloff, M., Russell, A. M., Greer, N., Lole, L., Hing, N., & Browne, M. (2021). Young people who purchase loot boxes are more likely to have gambling problems: An online survey of adolescents and young adults living in NSW Australia. Journal of Behavioral Addictions, 10(1), 35-41. https://doi.org/10.1556/2006.2021.00007

Sang, Y., Park, S., & Seo, H. (2017). Mobile Game Regulation in South Korea: A Case Study of the Shutdown Law. In D. Jin (Eds.). Mobile Gaming in Asia. Mobile Communication in Asia: Local Insights, Global Implications (pp. 55-72). Springer, Dordrecht. https://doi.org/10.1007/978-94-024-0826-3_4 So, Sh., & Westland, J. Ch. (2012). Red Wired: China's Internet Revolution. Marshall Cavendish. Staddon, J. E. R, & Cerutti, D. T. (2003). Operant conditioning. Annual Review of Psychology, 54, 115-144.

https://doi.org/10.1146/annurev.psych.54.101601.145124 Thurman, N., & Obster, F. (2021). The regulation of internet pornography: What a survey of under-18s tells us about the necessity for and potential efficacy of emerging legislative approaches. Policy & Internet, 13(3), 415-432. https://doi.org/10.1002/poi3.250 Xiao, L. Y. (2023). Breaking Ban: Belgium's ineffective gambling law regulation of video game loot boxes. Collabra:

Psychology, 9(1), 57641. https://doi.org/10.1525/collabra.57641 Zendle, D., & Cairns, P. (2019). Video game loot boxes are again linked to problem gambling: Results of a large-

scale survey. PLoS ONE, 14(3), e0214167. https://doi.org/10.1371/journal.pone.0214167 Zendle, D., Meyer, R., & Ballou, N. (2020b). The changing face of desktop video game monetisation: An exploration of exposure to loot boxes, pay to win, and cosmetic microtransactions in the most-played Steam games of 2010-2019. PloS ONE, 15(5), e0232780. https://doi.org/10.1371/journal.pone.0232780 Zendle, D., Meyer, R., Cairns, P., Waters, S., & Ballou, N. (2020a). The prevalence of loot boxes in mobile and

desktop games. Addiction, 115(9), 1768-1772. https://doi.org/10.1111/add.14973 Zuriff, G. E. (1970). A comparison of variable-ratio and variable-interval schedules of reinforcement. Journal of the Experimental Analysis of Behavior, 13(3), 369-374. https://doi.org/10.1901/jeab.1970.13-369

Сведения об авторе

Пор Сэппи - бакалавр права (по углубленной программе), бакалавр искусств,

магистр права, главный консультант, группа компаний «Кун Консалтинг»

Адрес: Австралия NSW 2006, г. Сидней

E-mail: seppypour@gmail.com

ORCID ID: https://orcid.org/0000-0001-9032-062X

Конфликт интересов

Автор сообщает об отсутствии конфликта интересов.

Финансирование

Исследование не имело спонсорской поддержки.

Тематические рубрики

Рубрика OECD: 5.05 / Law Рубрика ASJC: 3308 / Law Рубрика WoS: OM / Law

Рубрика ГРНТИ: 10.07.45 / Право и научно-технический прогресс Специальность ВАК: 5.1.3 / Частно-правовые (цивилистические) науки

История статьи

Дата поступления - 25 августа 2023 г.

Дата одобрения после рецензирования - 20 сентября 2023 г.

Дата принятия к опубликованию - 25 июня 2024 г.

Дата онлайн-размещения - 30 июня 2024 г.

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