Global Loot Box Regulations: 2023 Update

The loot box phenomenon persists in 2023, with various countries implementing regulatory measures. In recent years, the primary approach has been to determine whether loot boxes constitute 'gambling' under existing laws and regulate them accordingly. However, countries are now exploring alternative options, such as enforcing consumer protection laws, requiring disclosure of specific information, or demanding action from age rating organizations. This article provides an update on the policies discussed in the 2022 Loot Box State of Play report and summarizes new developments. The key takeaways from the author's academic writing on global loot box regulation are highlighted, with more technical and legal details available for those interested. The term 'loot boxes' refers to in-game purchases with randomized elements that can be bought with real-world money or premium in-game currency. This includes social casino games, where players are unaware of the exact outcome of their purchase. Belgium has maintained its ban on loot boxes due to its uniquely broad definition of gambling law, which prohibits loot boxes from being sold to both children and adults. Although the regulator lacks the resources to enforce the law, companies like Roblox Corporation have taken compliance measures, and major hardware platforms, storefronts, and publishers demand adherence to the law. The Dutch government has proposed changing the law to emulate Belgium's stance, but the outcome is uncertain due to the ongoing election process. Civil court decisions have considered whether loot boxes with transferable rewards constitute illegal gambling, with some judgments ruling in favor of the players and entitling them to refunds. In Austria, conflicting judgments have been issued, but companies are advised to exercise caution when operating in the country. The German Protection of Young Persons Act has been amended to require the German age rating organization to consider 'gambling-like mechanisms' when making age rating decisions. Games with loot boxes must display a warning label, and the FIFA video game series has been given a higher age rating due to its loot box features. The author expresses concern that a football simulation game with no controversial elements, aside from loot boxes, is now deemed unsuitable for young people under 12 in Germany. A similar stance has been taken in Australia, with more prescribed rules requiring games with loot boxes to be rated at least M. Mainland China was the first to require companies to disclose the likelihood of obtaining rewards, and this requirement has become increasingly official in other countries, including Taiwan and South Korea. The Dutch and Italian consumer protection agencies have argued that not disclosing loot box probabilities is a misleading commercial practice, and companies operating in the EU region are advised to make probability disclosures. The UK advertising regulator has determined that failing to disclose loot box presence is a breach of advertising rules, and companies should ensure that all video game advertising provides the required information. The UK Government has asked the industry body to self-regulate loot boxes, and 11 principles have been published, including probability disclosures, presence warnings, and refund policies. Many civil cases have been brought in relation to loot boxes in the US and Canada, but most are deemed to lack merit. However, Epic Games has settled claims in the US and Canada, suggesting that some companies may want to resolve the issue. The Spanish, Finnish, and Illinois bills on loot boxes have stalled, but the Brazilian bill is progressing. Companies are advised to seek specialist legal advice due to the diverging regulations across jurisdictions.