Sweden to investigate loot boxes

The government of Sweden will look into the relationship between loot boxes and gambling.

Sweden.- The connection between loot boxes and gambling has been a prominent subject among European regulators. Now, the Swedish government will officially investigate whether it should regulate loot boxes or not.

As reported by Swedish TV channel SVT, the consumer protection authority from Sweden will be in charge of the investigation. While the gambling regulator Spelinspektionen will not carry out the investigation, the consumer authority will contact the entity as well as the national public health department and the media council for their stance on the subject.

The report, due October 1, will likely help lawmakers reach a decision in relation to a potential amendment of laws. Different from other European countries that have already studied loot boxes, Sweden is not investigating specific games or publishers.

Minister of Civil Affairs Ardalan Shekarabi mentioned secondary markets, such as skin gambling websites, and said: “We are very close to what is normally regulated by the legislation for paid gambling.”

Current local laws establish that if there is a stake, a prize and a game of chance, it meets the requirements of gambling. The discussion revolves around loot boxes’ connection to the prize requirement. Some argue that as the prize doesn’t allow “cashing out” virtual items by loot boxes. Therefore, they don’t have real monetary value and one cannot call them gambling.

Ireland and the UK investigate loot boxes

Ireland has once again looked into the legality of loot boxes in the principal chamber of the Irish legislature. Back in February, Fine Gael TD Martin Heydon asked Minister of State at the Department of Justice David Stanton at the Dáil, Irish legislature, where his department stood on loot boxes. “Are they considered a form of gambling or an e-commerce activity?” he asked.

Heydon said that countries like Belgium, Isle of Man and the Netherlands have already discussed loot boxes and consider them a form of gambling. That is why the Department of Justice should compromise and take the lead to legislate it. The minister said that they are still working on gambling legislation. Provisions for video games, which include loot boxes, may be in future laws, he said.

Furthermore, the UK Gambling Commission (UKGC) said last year that one of the priorities is tackling unlicensed third-party websites that offer illegal gambling linked to popular video games. Hence, gambling regulators are calling for the video games industry and technology platforms to help crack down on these websites. “Games providers must also ensure that features within games, such as loot boxes, do not constitute gambling under national laws.”

The US is not far behind Europe on the subject

After Belgium’s investigation sparked the debate on loot boxes, the discussion reached the US Federal Trade Commission (FTC). The FTC announced in November 2018 that it would look to remove loot boxes as well and investigate child gambling.

“Loot boxes are now endemic in the video games industry and are present in everything from casual smartphone games to the newest, high budget releases,” said the measure’s promoter, Senator Maggie Hassan, and added: “Loot boxes will represent a US$50 billion industry by the year 2022.”

“It’s time for the FTC to investigate these mechanisms to ensure that children are adequately protected,” Senator Hassan asserted. He also called to educate parents about gambling and the presence of potential gambling in videogames.