US Senator Josh Hawley introduced recently a bill to ban loot boxes and pay-to-win microtransactions in games designed specifically for children under 18 as well as ones “whose developers knowingly allow minor players to engage in” to stir the pot once more.
The loot boxes debate has quickly gained international publicity over the past several years and a number of countries have moved to investigate their nature and explore different approaches toward their regulation. At issue is whether loot boxes constitute gambling or not.
Sweden, a country with rich video gaming culture, has recently joined the fresh wave of debating as the nation’s Minister for Public Administration Ardalan Shekarabi has tasked the Swedish Consumer Agency with conducting an investigation on whether loot boxes represent a form of gambling or not and presenting Swedish lawmakers with various approaches toward the regulation of the consumable virtual items.
Minister Shekarabi’s View on Loot Boxes
Announcing the loot boxes investigation, Minister Shekarabi said in an interview with local TV channel SVT last week that under the country’s gambling law, an activity requires “the existence of a stake, a prize, and a game of chance” in order to be defined as a form of gambling.
The Minister for Public Administration went on to explain that the prize requirement is usually the most heavily debated one in relation to loot boxes and their nature. In most gambling legislations around the world, a prize from a gambling activity has “real world monetary value.”
Minister Shekarabi pointed out that most video games do not allow “cashing out virtual items generated by loot boxes,” it can easily be argued that such items do not have real world monetary value and therefore loot boxes cannot be classified as gambling.
However, the politician noted that this argument gets an important “dent” once the fact that virtual items in loot boxes can be traded within the game or on secondary markets is taken into consideration. “The possibility to trade items arguably gives rise to supply and demand and therefore an objective monetary real-world value,” Minister Shekarabi said in his recent interview as quoted by Lexology.
The Minister went on that in his view loot boxes are “very close to what is normally regulated by the legislation for paid gambling.”
Trade Group Says It Will Cooperate with the Investigation
Sweden’s trade association representing video gaming companies, Dataspelsbranschen (Swedish Games Industry), has said in a recent statement that it would cooperate with regulators over the course of the investigation.
The trade body further pointed out that it welcomes Minister Shekarabi’s initiative and that they agree there is a “consumer protection issue (rather than gambling regulation as some have suggested)” and that they “welcome support and guidance in protecting the consumers.”
Dataspelsbranschen also revealed that it is in the process of “starting a scientific advisory council on responsible game design” as part of the measures it has taken to address the numerous concerns raised in relation to loot boxes.
The Swedish Consumer Agency has up until October 1 to present its findings to Swedish lawmakers. Although the agency has been tasked with conducting the investigation and not the Swedish gambling regulator, Spelinspektionen, the two bodies are expected to work closely together as well as with other government agencies over the course of the study.
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