July 6, 2018

The loot box debate continues to gain momentum.  Last week, the Australian Senate announced a public inquiry into loot boxes, months after the Belgian and Dutch regulators’ moved against them.

Regulators remain concerned that the use of certain forms of loot boxes (a mechanic by which a player unlocks a random reward) within video games constitutes a form of gambling.  This concern is exacerbated where such mechanics are used within games that are popular and readily accessible by children and young people.

Games publishers are no doubt frustrated by generalised media attention which brands all loot boxes as gambling (not all loot boxes are the same); however, it would be unhelpful to completely dismiss the criticism (as some have done) that loot boxes are not gambling (they can be).

While the Australian inquiry primarily relates to loot boxes, there is a risk that its scope will be extended to consider the use of in-app/ in-game purchasing mechanisms available in online social casino games adopting a freemium model.

The full terms of reference of the Australian inquiry are available here.