Loot Boxes in Video Games: Between Fun and Gambling for Minors?

Loot Boxes in Video Games: Between Fun and Gambling for Minors?

Currently, video games have evolved beyond simple entertainment. Mechanisms such as loot boxes have been integrated into many popular titles, offering players random rewards. However, this system has sparked debate about its legality, regulation, and ethical implications. In this article, we will explore these aspects to better understand the phenomenon.

What Are Loot Boxes?

Loot boxes are elements within video games that contain random rewards. Players can acquire them using real money or in-game currency. In titles like FIFA Ultimate Team, these packs offer players, items, or upgrades that can influence a player's performance in the game.

What distinguishes loot boxes is their random nature and the possibility of obtaining high-value items with low probability, creating an experience similar to gambling.

Why Loot Boxes Are Not Considered Gambling in Spain

To answer this, we must analyze two key aspects:

a) There is no direct economic return with real-world gain. Although players pay money for a loot box, the content they receive does not guarantee financial benefit outside the game. The legal definition of gambling in Spain requires that the outcome depends on chance and that there is a possibility of real economic gain or loss (Law 13/2011, May 27, Art. 2.1). In FIFA, players receive virtual player cards, but they cannot legally sell them for real money within the platform.

b) The primary goal is to gain in-game benefits. The reward from a loot box is usually cosmetic or functional within the virtual environment, not financial. Legislation distinguishes between economic prizes and virtual rewards, which excludes most loot boxes from being classified as gambling.

Legal Framework in Spain

Relevant legislation includes:

- Law 13/2011 on Gambling Regulation:

- Art. 2.1: defines gambling as games in which money or goods are wagered with a possibility of gain or loss, and the result depends on chance.

- Art. 3.1: includes online games, bets, and contests if they meet the previous definition.

Therefore, the current interpretation is that loot boxes do not meet these requirements, as there is no direct economic benefit and the reward is virtual. Most of these systems are not regulated as gambling but under consumer protection and minors' protection rules.

Draft Law on the Protection of Minors in Digital Environments

In June 2024, the Spanish Council of Ministers approved in first reading the draft organic law for the protection of minors in digital environments. This new regulation aims to create safe spaces for children and adolescents and includes significant contributions from the Ministry of Consumer Affairs to ensure greater safety in accessing video games.

Article 5 of the draft establishes a general prohibition on access and activation of loot boxes by minors. However, the law allows for exceptions where restrictions may be relaxed, provided child protection is guaranteed.

According to Law 13/2011, gambling regulation applies to activities that meet certain requirements: (i) risking money or goods of economic value; (ii) based on uncertain future outcomes; (iii) allowing the transfer of these goods among participants; and (iv) whose result depends, at least partly, on chance.

At first glance, loot boxes meet these criteria, generating debate about whether they should be considered gambling and thus fall under gambling regulation. This discussion is especially relevant for minors, who are among the most exposed and active users of such digital products, increasing the need for protection and specific regulation.

European Perspective

Austria: Divided Jurisprudence and Player Intention Approach

In Austria, loot box regulation has been subject to court decisions reflecting a nuanced interpretation of the law.

- Hermagor District Court Ruling (2023): In March 2023, the court ruled that FIFA Ultimate Team (FUT) loot boxes constituted illegal gambling under Austrian law. The court noted that the possibility of obtaining virtual items with real economic value, which could be traded in secondary markets, met the criteria for gambling. Sony was ordered to refund €338.26 to the plaintiff.

- Vienna Higher Regional Court Ruling (2024): In September 2024, the court ruled differently, stating that FIFA 23 loot boxes should not be considered gambling, as the player did not acquire them with the intention of economic gain, but to enhance the gaming experience. Additionally, the items could not be officially converted into real money, removing the inherent economic risk.

This ruling highlights the importance of player intention and the nature of item use in the legal classification of loot boxes.

Belgium: Ban Based on Transferability of Items

Belgium took a firm stance in 2018, when the Gambling Commission ruled that loot boxes offering random rewards with real monetary value violated gambling laws. The decision was based on the ability of players to exchange obtained items in secondary markets, introducing chance and economic risk. Several games with these mechanics were subsequently banned.

Netherlands: Focus on Transferability and Economic Value

In the Netherlands, the Gambling Authority (Kansspelautoriteit) has taken a strict stance on loot boxes. In 2018, it issued a legal opinion stating that games selling loot boxes and allowing item transfer are illegal. This led to the banning of several popular titles, including Dota 2, Rocket League, and PUBG.

United Kingdom: Classified as a Game of Skill

In the UK, loot boxes are not currently considered gambling under the Gambling Act 2005. The Gambling Commission has indicated that since items obtained in loot boxes have no monetary value outside the game, they do not meet the legal definition of gambling. However, concerns remain about structural and psychological similarities between loot boxes and gambling, particularly regarding minors.

European Union: Call for Common Regulation

At the EU level, the European Parliament has adopted reports urging the European Commission to implement harmonized regulation on loot boxes. Recommendations include clearly informing players about the probabilities of obtaining each item in loot boxes and considering the possibility of banning loot boxes in games accessible to minors.

Ethical and Moral Debate: Do Loot Boxes Encourage Gambling Addiction?

Beyond legality, loot boxes raise ethical concerns. Many argue that these systems exploit player psychology, creating an experience similar to gambling. The chance of obtaining valuable rewards with low probability can encourage addictive behaviors, especially among minors.

Additionally, the lack of transparency in probabilities and the pressure to spend real money for better rewards have been criticized as manipulative practices. These concerns have led several countries to consider stricter regulations or even bans on loot boxes.

Conclusion

In short, despite all the similarities mentioned, loot boxes are not currently regulated as gambling, at least in Spain, due to several reasons:

- No real economic return: Although players pay money or invest time to obtain a loot box, the content received does not translate into monetary gain or loss outside the game. Direct financial risk, central to gambling definitions, is absent.

- Benefits are exclusively virtual: Rewards improve gameplay, aesthetics, or strategy but have no guaranteed monetary value. Prizes are confined to the game universe and cannot be legally exchanged for money.

- Regulation focuses on consumer and minor protection: Spanish law and current interpretation consider these mechanics safe digital entertainment as long as rewards remain virtual. Gambling laws do not apply, though transparency, minor protection, and responsible use are enforced.

However, even though loot boxes are not considered gambling in Spain, their potential implications for addiction and responsible consumption should not be overlooked. These mechanics, based on uncertainty and random rewards, can promote problematic gaming habits, especially among minors and vulnerable players. It is therefore essential to continue monitoring the legal and social evolution of this phenomenon, analyzing how legislation, gaming platforms, and consumer protection policies adapt to a model that, although innovative, presents new and constantly evolving challenges in digital law.