Global Loot Box Regulations in 2024: A Comprehensive Update

This article offers an overview of the current state of loot box regulations globally. The focus has shifted from debating whether loot boxes constitute a form of gambling to ensuring compliance with various regulatory requirements. Unless a paid loot box offers random rewards that can be transferred between players, it is generally not considered a significant concern, except in Belgium where all paid loot boxes are prohibited. Several countries have introduced specific regulations, primarily focusing on disclosing the presence of loot boxes in product listings and advertisements, providing detailed probability disclosures, and imposing minimum age ratings for games containing loot boxes. These regulations stem from consumer protection laws or newly introduced dedicated regulations. For a comprehensive understanding of previously imposed rules, refer to the 2022 and 2023 editions of this series. The rules remain in effect unless otherwise stated. Further details can be found in Section 2.2 of the author's PhD thesis on loot box regulation, with source materials compiled in a repository for review. When referring to 'loot boxes,' the term encompasses any in-game purchases with randomized elements bought with real-world money or premium in-game currency. This includes gacha mechanics and social casino games. Some companies remain non-compliant with the Belgian gambling law, which prohibits loot boxes. Pokémon Unite has decided to comply by disallowing in-game purchases for Belgian players and plans to withdraw services from the country. The Belgian gambling regulator faces challenges in enforcing the ban but may criminally prosecute companies for illegally selling loot boxes. It is essential to respect the law by either removing games with loot boxes from the Belgian market or releasing an alternative version without paid loot boxes. Advertising for games with loot boxes should not target Belgian users to ensure legal compliance and avoid wasting advertising costs. Following a 2022 court decision, paid loot boxes are lawful in the Netherlands. However, companies have been cautious and not offered loot boxes to Dutch players. It is permitted to sell loot boxes in the Netherlands, but in-game purchase offers must comply with consumer protection law. The Dutch consumer protection regulator has published guidelines, and companies should comply with them. The regulator recently fined Epic Games for breaches of consumer protection law, indicating that loot box-related enforcements may be imminent. Consumer protection law requirements, such as disclosing loot box presence and probabilities, must be complied with. The European Commission has communicated these requirements to the European video game industry. The Netherlands, Italy, and the UK have sought to enforce these aspects. Other consumer protection law requirements, such as not falsely advertising products, must also be complied with. The forthcoming EU Digital Fairness Act is expected to regulate loot boxes and in-game currencies better. In relation to loot boxes whose random rewards can be transferred between players, players have successfully claimed refunds. The loot box purchasing contracts were deemed illegal, and some players were able to claim refunds. However, other cases have failed, with the court finding that the relevant loot box was lawful. An appeal to the Supreme Court has been filed, and a decision is expected before Summer 2025. The players' legal actions were supported by litigation funders, and video game companies have promoted their success to dissuade further claims. Having reviewed all decisions made by the German national age rating organization, the USK, in 2023, all games with loot boxes have been rated USK 12. The USK has confirmed that decisions will be made on a case-by-case basis, but companies offering games with loot boxes should prepare to receive at least USK 12 in Germany. The USK has also confirmed that all games with loot boxes will automatically receive USK 12 at a minimum for digital app storefronts. In contrast, PEGI in Europe and the ESRB in North America merely highlight loot box presence and do not account for it when making age rating decisions. A rule similar to the German one started applying in Australia from 22 September 2024. Games with loot boxes will receive the M rating at a minimum, while games with simulated gambling will receive R 18+. Games rated prior to 22 September 2024 may keep their older rating, but updates to loot boxes or simulated gambling mechanics will require re-rating under the new rules. In Mainland China, a company was fined for failing to disclose loot box probabilities. Companies operating in China should ensure that every loot box has a probability disclosure. In Taiwan, probabilities must be disclosed as percentages, and a specific message must be displayed. South Korea has published detailed guidance on how disclosures should be made, and any disclosed probabilities must be exact. The UKIE industry self-regulatory principles on loot boxes became effective from 18 July 2024. Many popular games failed to comply despite being given a grace period. The UK advertising regulator has upheld complaints against companies that failed to disclose loot box presence. Loot box presence is material information that must be given to consumers on app store product listings and all forms of advertising. In Ireland, stricter enforcement of consumer law and advertising rules has been sought. The Advertising Standards Authority for Ireland has ruled that social media advertising needs not disclose loot box presence if it links to a store listing that discloses. However, it is advised to make the disclosure on social media ads to avoid unnecessary risks and treat consumers fairly. A new draft law on protecting young people online was published in 2024, and the only provision is that paid loot boxes whose rewards are transferable between players are banned for under-18s. A similar draft law is progressing through the Brazilian legislature. Many civil cases brought in the US against video game companies by players in relation to loot boxes were without merit. Companies are generally permitted to implement loot boxes, but they must comply with various regulations. It is essential to seek independent specialist legal advice, as the area is becoming increasingly complicated, and multi-jurisdictional legal advice is often needed to ensure global compliance.