German Authorities Considering Loot Box Ban

Loot boxes might soon become illegal in Germany.

Loot boxes have been one of the key debate points in the last several months. A loot box is an in-game virtual item which can be used during gameplay, but it may also be exchanged or even sold. Due to its monetary value, certain websites have started organising loot box gambling, where players wager loot boxes instead of actual cash.

As there is an exchange, and an item can be won or lost, many feel that this is a form of gambling, but others agree, as no actual cash is in involved. Moreover, certain game developers limit the scope of how can loot boxes be exchanged and don’t allow third parties to organise loot box gambling. Concerns have been raised regarding the effect that loot boxes have on children. Opinions are divided, and the UK Gambling Commission recently ruled that loot boxes aren’t a form of gambling.

A Study by Hamburg University                                                  

On the other hand Belgian authorities have concluded that loot box gambling is a form of gambling and that it should be restricted. Loot boxes also became a discussion topic in Germany. As it is a federation, the German gambling landscape is rather complicated, and there have been quite a few misunderstandings and complex situations in the past. In 2015, even the European Commission became interested in German gambling laws.

The issue of loot boxes was reviewed by the Youth Protection Commission, a body which has the goal to protect the best interest of minors and it appears that they are aligned with the Belgian authorities in the opinion that loot boxes may constitute gambling.

The University of Hamburg conducted a study and one of the conclusions was that loot boxes can lead to normalisation of gambling activities amongst minors and problem gamblers, something which the YPC are a concerned about. The study also points out that the video gaming industry, in that respect, is very similar to the gambling industry and thus children should be protected from its advances.

Although loot boxes have entered the regulators’ ‘radar’ few years ago, the release of SW Battlefront II really sparked the interested and the publisher of the game, EA, were condemned by many.

A Decision Expected in March

The fact that players get familiarised with the content and the actual value of a loot box only after they purchase it has led a lot of individuals and organisations to conclude that it is, in fact, a form of gambling. Since you can invest real money without previously knowing what you’re getting, it can be likened to gambling, albeit many would disagree.

The Chairman of the YPC said that the organisations is currently considering a loot box ban. If the ban goes through, then video game publishers will have to disable some of the game features, and effectively prevent players from being able to purchase and subsequently gamble with loot boxes.

The decision of the Commission will be reached and published in March, this year. The key argument for the ban is the protection of children’s rights, i.e. the lack of thereof. In the United States, a member of the Washington State Senate submitted a bill that is supposed to authorise legislators to be able to reach a separate decision in each particular case.