US Senator Grills FTC and Games Regulator Over Loot Boxes

Posted on: February 16, 2018, 06:00h. 

Last updated on: February 16, 2018, 05:49h.

Casino.org Staff Writer Read More
Expertise: Commercial Gaming.

US Senator Maggie Hassan (D-New Hampshire) is concerned about the potentially harmful effects of loot boxes in video gaming and wants to know what the Federal Trade Commission is going to do about it.

US Senator Maggie Hassan on loot boxes
US Senator Maggie Hassan believes the ESRB is missing the point about loot boxes. They need to be subject to tighter regulation whether they can be classified as gambling or not. (Image: Associated Press)

This week, the former governor of New Hampshire told four FTC nominees the she had written to the video games industry self-regulator, the Entertainment Software Rating Board (ESRB), asking it to reconsider its stance on the controversial in-game items increasingly found in contemporary games.

She grilled the nominees on whether they believed that “children being addicted to gaming – and activities like loot boxes that might make them more susceptible to addiction – is a problem that merits attention?” She then asked whether the FTC would be willing to look at loot boxes as an issue independently, depending on the ESRB’s response. All four readily agreed that they would.

Compulsion Loop

Loot boxes are consumable in-game items that afford players randomized chances to win more virtual items or skills. In many games, the accumulation of skills is necessary for player-advancement through the game.

But gamers can also be offered the choice of skipping the randomized element and buying skills for real money through the game platform itself.

A growing number of politicians – not to mention gamers – are questioning whether it is fair to litter a game like Star Wars Battlefront II with these hidden microtransactions, when players have already purchased the game from a store for $60.

In October, ESRB ruled it would not give loot box games “adults only” ratings because it did not consider them to be gambling.

“While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). We think of it as a similar principle to collectible card games,” said the body.

Federal Scrutiny

But Hassan believes the ESRB has missed the point. Loot boxes may not constitute gambling under any traditional definition of the word – there is no “stake,” for example – but this does not mean they should not be subject to stricter regulation.

Many feel it’s not the randomized mechanics of the loot box alone that’s a cause for concern so much as this element of chance in combination with the opportunity to spend money when you feel that you’re not getting lucky enough.

It’s not gambling but it’s a simulation of the psychological experience of gambling.

While there is robust debate over whether loot boxes should be considered gambling, the fact that they are both expensive habits and use similar psychological principles suggest loot boxes should be treated with extra scrutiny,” wrote Hassan to the ESRB.

“At minimum, the rating system should denote when loot boxes are utilized in physical copies of electronic games.”

Loot boxes are already regulated under gambling law in several countries, including Japan, Australia and Belgium, and investigations are underway in many other country’s over whether rules should be tightened.

Meanwhile, Washington State and Hawaii have recently introduced bills aimed at imposing restrictions on games that use loot-box mechanics.

This is the first time, however, that a member of Congress has taken a real interest, which suggests game developers may be running out of luck.