Four out of Ten Loot Boxes Violate Dutch Gambling Law, Local Regulator Finds

Four out of ten loot boxes in video games were found to be violating the Dutch Betting and Gaming Act (Wet op de kansspelen), the local gambling authority, Kansspelautoriteit, said in a report on the matter.

The gambling regulator pointed out that loot boxes incorporate elements of games of chance into games that are generally based on skill, which makes their nature highly controversial. Loot boxes, also known as loot crates, are purchasable in-game items that contain further items, some of which could be of great value and help to players, while others could only represent simple customization options. The contents of a given loot box only become known to a player after they complete the purchase.

Kansspelautoriteit said in its study that some of the items in the loot boxes could be traded outside of a game. In other words, such items have a monetary value. However, under the Netherlands’ Betting and Gaming Act, the promotion of games of chance and the distribution of items with a market value without the necessary license is strictly prohibited. It is also important to note that the Netherlands does not have a developed licensing system for the authorization of activities of this kind, which practically means that these are illegal.

Kansspelautoriteit further pointed out that six out of ten loot boxes probed into did not run afoul of existing gaming laws as they did not offer items with a monetary value.

The gambling regulator called on providers of video games with loot boxes to make sure that their offering complies with Dutch regulations. Kansspelautoriteit went on to say that it would be taking enforcement action against all violators of the gaming law from June 20, 2018.

Addiction Concerns

The Dutch gambling authority launched an investigation into the nature of loot boxes after the initial release of the Star Wars Battlefront II game and the subsequent wave of concerns that the in-game items constituted gambling to an extent and were promoting gambling activities among teenagers and other vulnerable groups of players.

Aside from the legal status of the loot boxes, Kansspelautoriteit also probed into whether these posed addiction risks to players. The regulator found out that all loot boxes it studied “could be addictive”. However, its study read that there were “no indications of loot boxes being opened on a large scale by problem players and/or addicted players”.

According to the regulator’s findings, loot boxes have moderate to high risk potential for addiction. The risk potential generally depends on the way loot boxes are offered. Kansspelautoriteit said that higher risk loot boxes act like slot machines as they offer transferable goods, players are able to open an unlimited number of loot boxes, and the “near-miss” effect is deployed. In terms of addiction potential, such loot boxes compare to blackjack or roulette, while loot boxes with a lower addiction risk potential are comparable with small-scale bingo.

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