How Lootboxes Are Gambling & Why They Need To Be Regulated

While many believe loot boxes originated from Counter-Strike: Global Offensive; loot boxes for cosmetic items and players have been around for a while – first appearing in 2004 through 2007 in video games like UEFA Champions League 2006-07 which introduced trading cards to competitive sports, but these were not a payable item, more a grind after playing game after game.

To modern day, Valves Arms Deal update in August 2012 for Counter-Strike: Global Offensive. A virtual currency formed for common and rare skins for the games weapon models. Other factors were implemented such as the items durability, which played a big part in the skin’s resale value. After introducing this type of currency, it led to many gambling sites which offered a gambling functionality allowing users to bet on professional matches with their skins.

The result of these sites were two lawsuits against the sites and Valve themselves. Valve’s response was to take crucial steps to making sure these sites could not use Steamworks for gambling purposes. Valve took steps to regulate their containers, after these types of boxes violated Dutch and Belgium laws, so they disabled being able to open containers in those countries.

Other steps have been taken to regulate loot boxes, not only by Valve. The UK games industry have adopted an age restriction when it comes to trading, and or buying cosmetics for video games and has also been heavily taxed by the governments around the world. As possible legislations could affect many free-to-play games as their main source of funds are loot boxes, and the publisher itself. As long as the video game doesn’t provide a skin trading element to their cosmetic which would then create a third-party currency it is no longer classed as gambling. Even though opening crates/boxes are still not classed as gambling, when in reality it is essentially like placing a bet at Timeform, but the prize is an aesthetically pleasing skin, rather than money.

Gambling itself has been around for many, many years. The actual gambling industry has shown us how gambling can be regulated, you can gain an understanding on how real regulated gambling is handled. There is still a high to low chance of you winning and losing – same as loot boxes. Loot boxes with a trading over real life currency, is gambling personally. As you’re using money to have a 50/50 odd on a crate that could give you something worth more than you originally paid.

These types of microtransactions can be addicting like real life gambling addiction, as you’re always wanting a cool skin, or player. While all is being done to build a strong case regarding loot boxes, nothing is yet final. But we would need to bring a 17th century gambling law to the 21st century as they’re outdated when it comes to new technology and games with loot box mechanic. It should be regulated so people under 18 cannot use the loot box mechanic if it has a currency or trading element for real life money.

Loot boxes should be considered as gambling or mini-game. As it acts similar to what you see in casino, like lotteries or slot machines.