Victoria's Gambling Regulator: Loot Boxes 'Constitute Gambling'

It's not just the state of Hawaii that are investigating loot boxes. In email correspondence with a local university student, the Victorian Commission for Gambling and Liquor Regulation (VCGLR) has revealed that, yes, loot boxes constitute a form of gambling - at least in Victoria.

The correspondence kicked off by way of a student who reached out to the VCGLR, the independent regulator for the gambling and liquor industries in Victoria. They're the body that issues licenses for bartenders, proof of age cards, and generally regulate venues where alcohol and/or gambling will happen.

Video games isn't typically one of those industries. But with all the recent controversy around Battlefront 2, and loot boxes in general this year, the student got in touch and asked: do loot boxes constitute gambling?

Hawaii Wants To Fight The 'Predatory Behaviour' Of Loot Boxes

Here's Rep. Chris Lee (D) from Hawaii standing in front of a camera and making an announcement about steps being taken to combat the "predatory behaviour" of video game publishers, with particular emphasis given to Electronic Arts and its inclusion of loot boxes within Battlefront 2.

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Jarrod Wolfe, a strategic analyst in the Victorian regulators' compliance division, replied. And under Victorian law as far as he's concerned, loot boxes are a form of gambling:

My name is Jarrod Wolfe and I am the Strategic Analyst for the Compliance Division at VCGLR. I have received your correspondence in regards to gambling functionality (loot boxes) being incorporated into games.

Your research and suppositions on the matter are correct; what occurs with "loot boxes" does constitute gambling by the definition of the Victorian Legislation. Unfortunately where the complexity arises is in jurisdiction and our powers to investigate.

Legislation has not moved as quick as the technology; at both State and Federal level we are not necessarily equipped to determine the legality of these practices in lieu of the fact the entities responsible are overseas.

The correspondence was forwarded to Kotaku and has been posted in the main Battlefront 2 and gaming sub-reddits.

Wolfe went on to say that the VCGLR has been "engaging with interstate and international counterparts" to work on policy changes that would "modernise and inform both federal and state based legislation". They're also particularly concerned with the proliferation of gambling-based mechanics being targeted at minors, which Wolfe said was "not just morally reprehensible, but is also legally questionable".

The real kicker, as Wolfe wrote in a second email, is one of jurisdiction.

Gambling isn’t necessarily “Unauthorised gambling” so there are a lot of variables at play. For perhaps a real world example think of overseas betting agencies. Such as Bet 365 – Australians can and do use this service; yet it is clearly administered and run from the UK.

This isn’t illegal. However, if that company set up “shop” in Victoria or started specifically advertising and offering gambling products to Victorians. Then we could investigate and it could be considered a breach of legislation and we would pursue, overseas or not. One of the downfalls is that using overseas based products, Victorian residents do not have us to investigate any complaints or issues they have.

The VCGLR analyst noted that the regulator could potentially work with other Australian bodies to keep a closer eye on gambling elements in video games.

For instance, the Classification Board could get involved. "If these companies want to include significant elements of gambling in their products then perhaps we should work with 'The Australian Classification Board' to ensure than any product that does that and monetises it gets an immediate R rating," Wolfe proposed.

"I could imagine that this would send ripples through the industry and it would support the objectives of the Gambling Legislation to ensure minors are not encouraged to participate in gambling."

I've contacted EA and Blizzard for a comment on today's developments, and I'll update this post if a statement or response is issued.

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Comments

    So, does this mean that lucky dip show bags from The Royal Easter Shows held around Australia are also classified as Gambling?

    I mean, they’re targeting show bags directly to children, which is worse than targeting in-game Loot Boxes to adults!

    (Ps. This is all in jest)

      You're actually right, I guess the difference is in scale and satisfaction. While there may be different stuff in showbags the "value" difference is probably minimal. The lootbox thing is a bit harder since it's ephemeral but if you believe in the value of non-existent items then some of them are far more valuable than others.

      So the difference in real terms is a kid will buy one or two showbags but not 10, 50 or a 100 chasing some super rare items. Oh and Battlefront is only rated M so it's available to kids too and marketed at them (though not little kids).

      As @skrybe said, you're probably right. Anything that has a random unknown reward is gambling, the risk is whether the reward is valued at more than what you pay.

      That's where those showbags would get away with it - buying the contents individually would generally be more expensive than what you pay, even if you don't use most of them.

      You'd be surprised at what could be considered gambling. M:tG and other CCG's would also be gambling for example. They're lootboxes from the last generation, aimed at getting players/collectors from buying more and more in the hope of getting the rare one they're chasing. The win, in other words.

      This isn't an easy one to answer, with even the novelty situations potentially being less novel than we realise. Again, CCG's seem fun, but plenty spent far too much for little to no reward. Sound familiar?

      This is why we cant have nice stuff :(

        Exactly, the CCGs were a prime example. A couple others that people scoff at are the share market and the money market. Everyone says "no it's not gambling it's investment" but the reality is you're putting money on something that may "win" or "lose". I know a bloke who lost something like half a million speculating on the money market. He might as well have bought a truckload of scratchy tickets. He's have got a better return.

          Yeah, stock and money markets are an easy comparison as well. For the most part, they aren't available to minors though, which is one of the main issues with this (if not THE main issue).

          But bitcoins are, and they're volatile enough you can lose thousands in an hour. Just wish I'd listened to my gut back in January and bought 100 of em...

            Good point about the "not available to minors" issue. I think that ultimately is the biggest issue. Impulse control and evaluating consequences is not a strong point for kids (and lots of adults to be honest). So putting in something that makes them spend potentially large amounts of money is definitely dodgy.

            On a related note, I think a lot of the mobile games need a closer look too. While it's not so much gambling, it's easy to rack up ridiculous bills on their microtransactions.

    While what you say is "in jest", you're comparing apples to oranges.

    The RES bags aren't gambling in any sense of the word as you know what's in the bag before you buy it. There is no "gamble" of getting something worthwhile.
    You've seen the product, you've deemed it worthy of your hard earned cash and you get what you paid for... hence... not a gamble and therefor not gambling.

    Imagine how well Loot boxes would work if you could see what you were buying first... If you didn't like it, you'd just roll a new set of Loot without having to pay.

    Good lord. I am playing the game and enjoying it. I do not feel i have to pay for loot boxes and i suck at games. Will i get everything, no, will it take me ages to max out certain things, yes. Do i care, No. I am enjoying running around some of Star Wars coolest places making PEW PEW noises and smashing people with a light saber. People need to chill the f out.

    It is not mandatory to buy any item in a game, ever. If people so wish to spend hard earned money on a virtual item that provides absolutely no value more power to them. I personally think is beyond stupidity.

      And are you younger or older than 18? The argument isn't about gambling itself; it's about targeting minors.

    My battle ostrich!!!!

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