The Netherlands Gaming Authority changed its stance on video game loot boxes, requiring four game publishers to change the way paid in-game enhancements work in the Netherlands. Loot boxes, also known as loot crates, lockboxes, or skins, are now considered gambling in the Netherlands.

The four game publishers cited by the Gaming Authority were FIFA 18, Dota 2, PlayerUnknown’s Battlegrounds, and Rocket League.

The Gaming Authority’s ruling has forced four publishers to make changes to their games, after the agency’s landmark report discovered their loot boxes violated the regulator’s gambling policies. The Netherlands joins Belgium and Australia in restricting the use of loot boxes in video games, online games, and smartphone games.

The response around the globe to the loot box controversy has been varied. Regulators in New Zealand and the United States – Washington state and Hawaii exempted — have taken a different tack, while the UK Gambling Commission continues to deliberate on the issue.

What Is a Loot Box?

Some readers might not be familiar with what a “loot box” is. Loot boxes are offered in many video games as a way to enhance or assist the player in some way. They have many names, often according to the genre of game being played.

For shooter games you might see “loot box”, “loot crate” or “lockbox”. These forms of loot boxes typically consist of new gear, outfit or piece of wardrobe. Whereas with digital card games you might see the term “booster pack” which originated from collectible card games.

These upgrades can be in the form of a new skin, a new piece of wardrobe, or an upgraded weapon. Some games allow in-game enhancements in the form of skills or items for your player. In most games, loot boxes can be unlocked through play or leveling-up. Publishers allow players willing to play money to buy loot.

An Example: Call of Duty Giveaways

Many times, throughout these games, loot boxes, are given as a reward for free during game play. For instance, in Call of Duty, players might receive them for their character leveling up or making it to the end of a multiplayer game without quitting.

Some games, like ones you might play on your hand-held device, often give out loot boxes for watching a quick promotional clip in between game-play. These usually advertise new games coming out or certain streaming events.

Though, these free giveaways are not what is causing issues throughout the world. The issue, that has brought a worlds amount of discussion and debate, is that the other way to get loot boxes is by pulling out your own wallet.

Randomized Rewards System

The key element of a loot crate is the randomized nature of its contents. Like with a pack of baseball cards, you do not know what you are getting. The volatile nature of the bought item is why some gamers think loot boxes are gambling.

The fact that people are technically risk their personal funds on these unpredictable loot boxes is what makes for such a controversial topic. There is no guarantee in what you will get in a loot box, it is a game of chance with each purchase, some might even call it a gamble.

Though that is one issue, the real problem that many are seeing is with addiction in youth. There is no age limit on who can purchase these boxes. So, addiction plays a big role in decisions regarding whether to buy more loot boxes.

“A Treasure or a Burden?”

The Netherlands Gaming Authority released a study on loot boxes, “A Treasure or a Burden?”, which concluded that four game publishers failed to comply with the law regarding loot boxes.

The regulatory agency stated, “The study revealed that four of the ten loot boxes that were studied contravene the law. The reason is that the content of these loot boxes is determined by chance and that the prizes to be won can be traded outside of the game: the prizes have a market value. Offering these types of games of chance to Dutch consumers without a license is prohibited.”

Changes for FIFA 18, Dota 2, Battlegrounds, Rocket League

The games were later found to be FIFA 18, Dota 2, PlayerUnknown’s Battlegrounds, and Rocket League. The six other studied games were found to not be in violation of the law as they do not allow for items to be traded for a “market value”.

The four affected publishers have until June 20 to complete changes to their loot box design to comply to the new law before it goes into effect.

The Gaming Authority asks that, aside from the four that directly violated the law, all publishers should, “remove the addiction-sensitive elements (‘almost winning’ effects, visual effects, ability to keep opening loot boxes quickly one after the other and suchlike) from the games and to implement measures to exclude vulnerable groups or to demonstrate that the loot boxes on offer are harmless.”

Risk of Addiction in Underage Gamers

The Gaming Authority has reported that it yet to receive, “any signals that demonstrate that problem players and/or addicted players are opening loot boxes on a large scale.”

The Dutch officials did identify a “moderate to high” potential for risk of addiction based on all ten games in its study. Only two out of the ten games studied in the group are rated for adults by the Pan European Game Information system. Their conclusions were based on a ten-dimension quantitative test that was once used in casino games.

The Netherland Gaming Authority referred to loot boxes as “similar to gambling games such as slot machines and roulette, in terms of design and mechanisms.”

Netherlands Gambling Authority Report on Loot Boxes

The report suggested that when you integrate luck-based loot boxes into skill-based games it ultimately lowers the threshold for gambling. The easy access loot boxes have an increased potential for addiction for “socially vulnerable groups”.

The report added, “To date, the providers of the games with loot boxes that were studied have not provided suitable control measures to exclude vulnerable groups from loot boxes and/or to prevent addiction. This means that, in any event, the minors vulnerable group can open loot boxes without any threshold and/or be tempted into opening loot boxes.”

2017 UK Gambling Commission Loot Box Report

Third-party skin-gambling sites are another issue regulators currently are addressing. A 2017 study by the UK Gambling Commission revealed that 11% of game players aged 11 to 16 year within the United Kingdom had at one point placed bets with skins. This meaning that roughly 500,000 children that were under the age of 15 could be using skins for gambling.

This argument about whether or not loot boxes should follow gambling rules and laws is worldwide. Organizations such as the US Entertainment Software Rating Board took the position that, because loot boxes always offer in-game goods, they are not gambling. For instance, if they offered merchandise outside the game (or cash), the ESRB would consider loot boxes gambling.

ERSB’s Perspective “Not Valid”

The Gaming Authority came back saying that their argument was “not valid”. Being that these randomized goods have variable market values it makes them a gamble. The authority said, “It is beyond doubt that the real winner is the person who wins the major, valuable prize with a high market value.”

The Netherlands Gaming Authority is not taking this conclusion lightly and says that they have had “numerous discussions with other European supervisory bodies” regarding similar regulations. Belgium’s Gaming Commission came to a similar conclusion regarding loot boxes last November.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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