The FTC loot box workshop will gather publishers, players groups, and anti-loot box advocates.
The U.S. Federal Trade Commission now is examining the legality of loot boxes. The FTC plans a workshop with representatives from the gaming industry on August 7, while consumer advocates will be on hand to discuss loot boxes later this year.
The FTC is calling the event “Inside the Game: Unlocking the Consumer Issues Surrounding Loot Boxes“. The event is planned for the FTC’s Constitution Center conference facility.
Loot boxes became a hot-button issue the past couple of years. The debate rages over whether loot boxes should be considered gambling or not. A “loot box” is a video game prize or upgrade which players collect through game play, though many games allow in-game purchases of loot boxes.
Game publishers sometimes call such purchases booster packs or loot crates, and they have much in common with CS:GO skins. The random nature of the prize inside a loot box combined with the cost of such in-game purchases make them controversial.
Are Loot Boxes Gambling?
Every loot box contains a random assortment of virtual items. However, there is no guarantee you won’t get something you already have as you will not know what you get until after you open it. Some compare the process to kids buying a pack of baseball cards. Others consider the process nothing short of gambling.
In any case, the fact that loot boxes have random prizes is only part of the discussion. Third-party sites exist where people can gamble on a coin toss for control of a loot box. This veers into the realm of gambling either way. Since children as young as 13 have been known to gamble skins and other video game prizes, it is a big problem for game publishers. Parents naturally want controls.
Until now, a handful of states have taken a look at loot boxes. Washington state is most active, while a Hawaii state representative called for a ban in his state. But now the Federal Trade Commission is taking a look at the practice.
Risking “Something of Value”
Most US states define gambling as risking “something of value” to chance or a future contingent event that is out of the player’s control, in hopes of winning something else of value. There are several jurisdictions that have already determined that loot boxes do not completely correspond with their criteria of gambling and do not require regulation.
Though most would see game items and skills to be valueless there are those, players and regulators, that feel differently. With such a difference of opinions, the debate has become less about whether or not they should be considered gambling and more about whether they are causing harm and should need some form of regulation and observation by consumer protection agencies. The FTC is questioning whether loot boxes are an expensive simulation of the psychological experience that comes with gambling.
Letter to Maggie Hassan
“As the video game industry has rapidly evolved, we have remained vigilant for potential consumer protection issues,” said FTC chairman Joe Simons in a letter to US Sen. Maggie Hassan.
The former governor of New Hampshire, Hassan, called for the FTC investigation last year in Congress. During that time Hassan expressed her frustration with the Entertainment Software Rating Board (ESRB) after they denied her request of giving loot box games an “adult only” rating.
Maggie Hassan to the ESRB
“While there is robust debate over whether loot boxes should be considered gambling, the fact that they are both expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny,” Hassan told the ESRB. “At minimum,” she said, “The rating system should denote when loot boxes are utilized in physical copies of electronic games.”
The problem that is arising is that minors have easy access to these games containing loot boxes and a lot of times parents are not aware of their gaming habits. So, the question becomes more about who should have access to these pricy prize packs rather than a strict line on gambling or not.
The debate rages. Many video game players don’t like paid loot boxes, because it un-balances the game or favors those with lots of cash. Others think the government should not get involved in video games, and otherwise think parents should police their children’s video game habits. Still others think the government needs to help parents by policing the industry as a whole, to assure loot boxes are not available in the United States. The FTC workshop later this year should be a pivotal event for video game publishers and players alike.
