Loot boxes and gambling in children

What is the fuss about?

As the BBC and many other outlets reported this week, the UK Government does not plan to regulate loot-boxes or other gambling mechanics within video games designed for children. In my view, this is a major mistake. In this article, I’ll explain what loot boxes are, why I consider them to be so dangerous and what I advise you to do to support and educate your pupils.

What are loot boxes?

Loot boxes are in-game, consumable virtual items that can be redeemed to provide a randomised selection of further virtual items. Put simply, a player of a video game gets a box that contains a load of random stuff they can use within that game.

The key word there is random. Players do not know what they are getting. They get loot boxes either through buying them with real world money or through regular gameplay – often repeating boring repetitive tasks in a process known as grinding.

What has our Government said about this?

The UK Government has taken a hands-off approach to addressing this practice. They have requested that the video game industry regulate themselves in this matter, which, in my opinion, is unlikely to have an effect. For example, one video game publisher EA made £1.15 billion (yes, billion) from loot boxes sold in its Ultimate Team mode which features in the popular FIFA series of football games. In one year.

Loot boxes are immensely profitable for video game companies, which might cause some governments to hesitate when it comes to implementing any sort of regulation. But not all governments feel this way; the governments of the Netherlands and Belgium took action years way back in 2018, and governments in China, Japan, South Korea, Australia and a number of European countries have all intervened to take action on this issue. In fact, a report by the Norwegian Consumer Council in 2022 that was backed by 18 other EU countries commented on:

– “The allegedly exploitative nature of FIFA Ultimate Team which encourages players to obtain packs using FIFA Points or Coins, the former of which can only be purchased using real money.”

– “The aggressive forms of in-game marketing, deceptive design and “dark” patterns which encourage players to spend as much money as they can.”

It went on to recommend that deceptive design practices should be banned, prices for in-game purchases should be listed in real-world currency and that loot boxes should be banned in any games likely to be played by minors. We will not see any of these recommendations implemented any time soon in the UK, meaning it is up to us as educators to step up and educate our children in order to fill the gap left by the missing regulation.

Is this really gambling?

There are two sides to the argument.

The argument that the practice of selling loot-boxes is not gambling is essentially predicated on the principle that if you don’t can’t cash out your prizes for real money, it doesn’t constitute gambling and does not need to be regulated as such.

The argument that this practice is gambling centres around the fact that you can use real money to participate and the spoils of your loot box are entirely down to chance – you might obtain items of a higher value than the purchase price, or you they might be of a lower value, which can trigger problem behaviours that are associated with addiction and gambling.

What are the dangers?

• Loot boxes are immediate. You buy a loot box and the emotional experience is immediate. This is simliar to the brain’s response to the most addictive forms of gambling, such as lottery scratchcards and Fixed Odds Betting Terminals (which the Government had to legislate against back in 2019 due to their highly addictive nature).
• Children are able to purchase loot boxes using in game currencies bought with real money. This is similar to the practise of casinos exchanging money into chips to psychologically distance the act of gambling from the act of spending money.
• The odds of success are rarely published and even when they are, they are frequently obfuscated. Children are not mentally sophisticated enough to understand that they are spending money on events that have little chance of success.
• This is further exacerbated by YouTubers who spend vast amounts on loot boxes, safe in the knowledge that they will make the money back by filming themselves opening the boxes. They frequently edit their videos to only show the most successful boxes, giving viewers the false impression that their chances of winning are much higher than they really are.
• We are embedding gambling behaviour in our children from an extremely young age.

Where do we come in as teachers and educators?

To a great extent, arguing over whether the practice of selling loot boxes technically constitutes gambling or not is irrelevant. The behaviours they can elicit in children are extremely problematic and they demonstrate just another way that law-makers and educators like us are regularly playing catch-up when it comes to the consequences of rapidly-evolving technology driven by the economics of business.

So we must support our children, whether loot boxes are designated as gambling or not. Dealing with the actual problem rather than its definition is something we do as educators this all the time. For example, if a child has significant special educational needs and is awaiting a diagnosis, we don’t wait for the diagnosis (which might take years) before putting support in place. We assess the need of that child and put everything we can in place for them as soon as we possibly can, regardless of the status of the diagnosis process. Once the diagnosis is obtained, we can fine-tune the support we already have in place to give the child the absolute best possible outcome.

This situation is very similar. You, as educators, need to be aware that this problem exists and that our children are encountering it every day, whether we are aware of it or not. When they leave our schools at 16, we do not want to be releasing a generation of children into the world who have had no guidance on spending their money in the hope of getting lucky without questioning their chances of success. We do not want them exposed to the instant gratification (or otherwise) of gambling, losing, then immediately gambling again, yet the immediacy of loot box mechanics absolutely encourages this in exactly the same way as Fixed Odds Betting Terminals.

So what do we do?

Show that you are fully aware that this problem exists. Put education and support in place.

Here’s how I suggest you do this:

• Begin by warning children of the pitfalls and consequences of using real money (or converted real money, such as Robux) to pay for in game items. Acknowledge that just because real money has been changed into in-game currency, it is still real money.
• Explain that loot boxes are not always called loot boxes. They might be called loot chests, packs, booster packs, loot crates, lockboxes, chests or something else. They are often purchased using keys, coins or gems.
• Address the prevalence of loot boxes in games. Explain that you are not attacking the games that they love, rather you are teaching them to understand the mechanics of this particular aspect of those games to prevent them from being manipulated.
• Acknowledge that loot boxes are legal in this country, although you might mention that they are banned in some other countries. Acknowledge that there are other things in this country that are still legal but are not good for you.
• Teach children to identify problematic gambling behaviours in themselves, such as rebuying another loot box immediately after opening a disappointing one.
• Recognise that if they have to keep behaviours a secret from their friends or family, it is an indicator that they need help.
• If they ever use their parents’ money to buy loot boxes without them knowing, it is a serious problem.
• Recognise that if they feel upset, depressed, frustrated or angry after making an in-app purchase, they might need help.
• Recognising that if they are grinding only to pay for loot boxes, it is a problem and they need to break away from the game. Teach children if they are spending more than half their time grinding in a game, then the grind is the game. If they are addicted to spending hours completing repetitive tasks in order to receive loot boxes, it is just as bad as being addicted to using real world money.
• Show children the actual odds of getting their desired outcome from a loot box in a way they can understand. For example, the chance of getting a top player (rated 90+) in FIFA is just 3.2% when you buy their Ultimate pack (costing just over £18), falling to almost 0 (0.13%) when purchasing a cheaper pack (Gold pack, roughly £0.80). You would need to purchase 22 Ultimate packs (£351.78) just to get to a 50/50 chance of getting a random top player.
• Explain how YouTubers are able to open hundreds or even thousands of loot boxes if they make enough money from the video showing them opening them. They do not show all of the loot box openings.
• Put children in control of their own gaming habits. Make sure they can recognise a problem as it is happening.
• Make sure they have a safe avenue to get help. Make it clear that there are people at school who can help them if they think they are no longer in control.
• If they think they could stop at any time, try it. If they are unsuccessful, know who to ask for help.

The final word

A lot of what I have written above is my own opinion, but I have tried to back it up with independent sources and research wherever possible. I encourage you to research this issue independently rather than just take my word for it.

We cannot wait for legislation to declare this a problem – there are literally £billions of reasons why this won’t happen while the Government is asking video game companies to set their own limits on this particular money-printing machine.

It’s up to us to put the support in place while we’re waiting for the diagnosis. All of the advice above is absolutely rock-solid advice to give to children regardless of whether or not loot boxes are considered gambling. It’s up to you to implement it.

I’ll leave you with a few numbers to finish.

– 93% of children play video games.

– 40% of those children regularly open loot boxes.

– 12 out of 13 studies on the effects of loot boxes have established unambiguous connections to problem gambling behaviour.

– Around 5% of all loot box purchasers (including adults) spend £70 or more a month specifically on loot boxes. This is responsible for generating half of all loot box industry revenue. There is no evidence that higher loot box spend correlates with higher earnings. This suggests that many of that 5% have a serious gambling problem and that the loot box industry is highly dependent on keeping problem gamblers gambling.

Source: GambleAware.org / Close & Lloyd, 2021 (Universities of Plymouth & Wolverhampton)

James