Reddit user -Caesar, a Victorian law student reached out to the Victorian Commission for Gambling and Liquor Regulation to inquire about their stance on loot boxes systems in video games. Jarrod Wolfe, a Strategic Analyst for the Compliance Division of the VCGLR responded to confirm that the VCGLR consider loot boxes a form of gambling.
“Your research and suppositions on the matter are correct; what occurs with "loot boxes" does constitute gambling by the definition of the Victorian Legislation.”
Wolfe goes on to describe the challenges the VCGLR face. Stating that their federal and state legislation is outpaced by the advances in technology creating difficulty in their ability to determine the legality of loot boxes. In addition to technology outpacing the law, Wolfe acknowledges an issue of jurisdiction and limits on the VCGLR’s ability to investigate internationally based companies. He went on to confirm that the VCGLR is currently working with other gambling commissions on this issue.
“We are currently engaging with interstate and international counter parts to progress wider policy changes and to modernise and inform both Federal and State based legislation.”
Even working with national and international gambling commissions, Wolfe does not think that legal enforcement will be possible due to the international nature of the problem. However, he has suggested that they could work with other agencies to bring about change. One such agency suggested was The Australian Classification Board. Working with the Classification Board could see that any game with monetized gambling elements receives an adult only R rating.
“If these companies want to include significant elements of gambling in their products then perhaps we should work with “The Australian Classification Board” to ensure that any product that does that and monetizes it gets an immediate R rating. I could imagine that this would send ripples through the industry and it would support the objectives of the Gambling Legislation to ensure minors are not encouraged to participate in gambling.”
All games containing loot boxes receiving an automatic R18 rating would have a powerful impact on how games are marketed and sold in Australia. It is against the law in Australia to sell R18 rated games to people under the age of 18. Digital storefronts like steam would need to stop selling R18 rated products to Australians or take reasonable steps to prevent minors from accessing R18 rated content such as the age verification method used in online gambling. If enforced, the R18 rating could also cause game companies to release Australian versions of the game with gambling elements removed to avoid the R18 rating.
One final point of interest from the VCGLR’s response if their focus on “pay to win” systems. Wolfe describes skins, skin betting, and virtual currencies as a peripheral concern, but describes “pay to win” as a predatory practice.
“Skins, skins betting and virtual currencies are certainly a peripheral consideration. However, the idea that (genuine) progression in a game could be reliant on the outcome of a random number generator is at odds with responsible gambling and the objectives of our acts.”
It’s possible that loot boxes might have been able to survive in a legally grey area had they remained cosmetic only, but the inclusion of pay to win elements is forcing all loot boxes to be reevaluated.
I have reached out to the New South Wales(my state) Gambling and Liquor Commission to ask what their position is on loot boxes. I have also enquired regarding collectible trading cards such as Magic the Gathering to see if they would be considered gambling if loot boxes are found to be gambling. I will update this post if\when I receive a response.
What do you think of the way this is developing? Do you think that loot boxes are more or less gambling if the contents of the box are cosmetic only vs gameplay affecting? Let me know what you think.