After loot boxes (partly subsequently implemented) have established themselves in almost every of the popular game titles, the legal debate has flared up whether loot boxes could not be illegal gambling. This discussion is now taking place not only in the legal-abstract academic world, but also employs regulators worldwide. Their reactions could not be more different.
In China, for example, loot boxes have not been found in games since mid-2017. The Belgian gambling authority also classifies loot boxes as gambling and calls for a Europe-wide solution. Similarly, the US state of Hawaii has recently made clear its dislike of this type of in-game purchase. The British Gambling Commission, on the other hand, considers the loot boxes to be (still) legally unproblematic.
In Germany, too, there is no sign of a uniform direction of movement. For example, the USK (entertainment software self-control) shares the opinion of the British authority and sees no reason to intervene. However, some members of the Bundestag who judge loot boxes as “1a gambling mechanics” are different.
Can virtual items be worth something?
According to classical principles, the potential profit must have a not inconsiderable asset. It is questionable whether virtual objects – such as the contents of a loot box – can also have an asset at all. At first glance, it could be argued that virtual objects without market-based relevance are unlikely to have an asset. The opening of loot boxes would not be considered a gamble, the legal discussion would be over and the loot boxes would be preserved for gamers. But it’s not that simple:
It becomes legally unclear if the items contained in the loot box can also be purchased specifically through the in-game shop and thus – we remember – ultimately have a certain value in the real currency. In that case, the contents of the Lootbox would be a concrete asset by simply comparing what the item that happened to have originated from the loot box would have cost if it had been purchased directly in the virtual shop instead.
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Own markets for trading virtual items
However, the developments in the gaming industry are clear: Games are distributed today in the vast majority of cases through online portals such as Steam, Origin, etc. These platforms usually also offer their own virtual marketplaces for players. There, players can offer virtual items from loot boxes to other players for real money. Here, the exception presented above can no longer protect manufacturers:
Players sell their virtual items to each other for real money – with the operator’s consent. This does not change if the items can only be purchased with the “in-house” online currency, as this currency – we remember – was finally acquired with real money and its asset can therefore be calculated cleanly.
Loot boxes are thus on a narrow path between legally unproblematic in-game purchase and illegal gambling, especially since the items are sometimes traded for considerable sums. Banning the loot box system would be arguably the most pragmatic solution to rule out the danger to players. However, that measure does not take into account the legitimate commercial interests of the game manufacturers and distributors. It is better for public authorities and industry to find a common solution.