Loot Box Regulation Proposed in Australia – What Does It Mean for the Industry?

Could 2023 be the year when loot box regulation finally arrives in Australia? MP Andrew Wilkie has proposed a bill recommending that such products be available to players over 18 years only.

Loot boxes are virtual rewards in video games that can be purchased by the player with real money or in-game currency. They contain randomised game items such as weapons, skins, and other game features. Game developers often use loot boxes to monetise their games.

At first sight, loot boxes seem naïve and just another way to spice up the gaming action. Their nature, however, has been deemed dangerous. The public has been opposing the concept, fearing it may lure young players to gambling.

Loot Boxes Explained – What Makes Them Dangerous?

According to the Gaming Council of Australia research, about two-thirds of the country’s top-selling video games come with loot boxes.

This raises red flags as a UK study reveals that such a feature “can and do cause harm” to players, especially young ones. Emotional and financial harm are among the forms it can manifest.

The concept is created to motivate repeated purchases of digital items. Moreover, they imitate gambling as nobody knows what they will get. In a way, experts believe, it teaches and gets minors accustomed to gambling.

According to the Australian research, consumers who use loot boxes are more likely to participate in gambling.

But what makes loot box regulation so necessary?

Loot box prizes can only be revealed by purchasing an online key from the game. Players can receive a wide range of values, which can be much higher or lower than the cost you will pay.

Each loot box, or mystery box, has a randomised value. The items you receive may be worth almost nothing or hundreds or thousands of dollars. You should know that you put your money into the unknown. The video game reward system randomly decides the value you will get, like pokies.

Loot boxes often use near misses to keep the players buying one more time for better luck and higher reward. As you receive the virtual goods from the box, an animation spices the whole moment visually. Pokie machines have spinning reels with similar visuals that pop up when the player hits the right combination.

You don’t need to visit any brand on our online casinos list to spot the similarities.

Proposed Solution – Restricted Access to Games With Loot Boxes

This topic has been looming over the Australian video gaming market for quite some time. It became relevant in late 2022 when the Independent Federal MP Andrew Wilkie proposed a bill to solve the problem.

Since experts are correlating loot boxes with gambling and gambling is allowed to Aussies of at least 18 years, the solution is simple; minors should not have access to video games that include this feature.

In a statement, Wilkie called this feature “an insidious gateway to gambling”, whose goal was to target the youngest players. Mario Kart, Call of Duty, and Star Wars were among the video games popular among Australian consumers he listed as ones with loot boxes.

He also noted that loot boxes evoked the same feeling associated with pokies and traditional gambling activities. Some of them were tempting players with the possibility of winning in-game monetary items, taking risks in exchange for possible rewards, delivering random prizes, and encouraging spending.

Loot Box Regulation in Other Markets

In some countries, loot boxes have been regulated as gambling and are now illegal. In other countries, the players are free to buy them and try their luck.

It’s important to note that the classification of loot boxes can vary depending on the jurisdiction and region in which the players are based.

UK authorities have repeatedly warned against allowing minors to access games with this feature. Still, following a two-year inquiry and studying of the issue, the government decided not to ban the concept.

Belgium is one of the countries where a loot box ban was introduced back in 2018. However, a 2022 study revealed that the ban wasn’t enforced as it should have been.

That said, it remains to be seen how the Australian authorities will handle the issue if the bill passes.