| Lord Grade,
chairman of the House of Lords Gambling Committee, told BBC Breakfast that lots
of other countries have already regulated loot boxes.
Loot boxes a controversial element of video games
could be reclassified as gambling products over concern they are
training children to gamble.
Loot boxes allow players to spend money on
in-game rewards such as special characters or equipment, without knowing what
they will get. Their value to the video games industry has been estimated at
£23bn a year and rising, thanks to revenues that keep rolling in even
after the initial purchase of the game.
The Lords say they should be
classified as "games of chance" - which would bring them under the Gambling Act
"If a product looks like gambling and feels like gambling, it
should be regulated as gambling," the House of Lords Gambling Committee report
says. And they warn that such a change should not wait.
must act immediately to bring loot boxes within the remit of gambling
legislation and regulation," said a statement accompanying the
Loot boxes have long been controversial in video games. They
offer players a chance at a randomised reward when opened. To further
complicate matters, boxes can often be bought for real money, and the rewards
can sometimes be traded.
Lord Grade, chairman of the committee, told
BBC Breakfast that lots of other countries have already started to regulate
loot boxes because "they can see the dangers" which is teaching "kids to
The DCMS select committee heard evidence last year that loot
box winnings can be easily exchanged for cash on third-party websites and that
their use by game developers was likely to facilitate profiting from
In a subsequent report, the influential
committee advised that they should be considered gambling products.
Grade went to say the Gambling Act was "way behind what was actually happening
in the market" but he added that the "overwhelming majority" of the report's
recommendations "could be enacted today" as they don't require
The Lords report is wide-ranging, covering the entire
gambling industry, but focuses in part on new forms of gambling, and those
targeted towards children.
"There is academic research which proves that
there is a connection, though not necessarily a causal link, between loot box
spending and problem gambling," it says.
One expert, Dr David Zendle,
explained to the committee that either loot box spending causes problem
gambling, due to their similarity - or that people who have gambling problems
spend heavily on loot boxes. But he warned that either way, the connection was
The Lords report concludes that ministers
should make new regulations which explicitly state that loot boxes are games of
chance. It also says the same definition should apply to any other in-game item
paid for with real money, such as FIFA player packs.
The government told
the committee that its planned future review of the Gambling Act would focus on
loot boxes. But the Lords report warns: "This issue requires more urgent
The Lords join a range of parents and childrens' groups, as
well as a previous report from the digital committee on addictive technologies,
in calling on ministers to regulate loot boxes as a form of gambling.
Some action has already been taken: in Belgium, loot boxes were banned
in 2018 due to similar fears. Earlier this year, game-rating agency Pegi said
clearer warning labels would be added.
Researchers told the committee:
"eSports represents the largest growth opportunity for sports gambling and
presents a particular worry, as its players and spectators are
UK games industry body Ukie said it was working hard to address
the concerns raised in the report.
"The majority of people in the UK
play video games in one form or another, so we take these concerns seriously.
We've worked hard to increase the use of family controls on consoles which can
turn off or limit spending and we will be working closely with the DCMS during
its review of the Gambling Act later this year," chief executive Jo Twist said.