Are Video Game Loot Boxes Just Like Non-UK Licensed Casinos?

Non-UK Casinos have become a popular destination for UK gamblers looking for an escape from the country’s regulated gambling sector. After increasing pressure from social groups and the government, the UK Gambling Commission have taken an active role in policing the betting industry, which has tightened the screw on UK gaming providers. However, one area that has escaped their scrutiny is that of the growing video gaming scene, which is arguably offering the same games of chance as the original casino scene.

Just as we saw a boom in online casinos, so too, we have witnessed big growth in the UK gaming sector. The payments model has also changed, from a one-time purchase of a physical cartridge or DVD, to a multi-purchase online model where users can buy in-game items, or secret boxes containing rewards. There is a concern that these types of activities simply allow them to operate as a non-Licensed casino offering games of chance.

In this article we will explore the similarities between video game rewards and non-UK licensed casinos not on GamStop.

What are Loot Boxes?

In-game purchases have become a standard feature of modern video games and that has brought increased opportunities for gamers to spend their money throughout the gaming experience. Players can now purchase upgrades, such as costumes, vehicles, and larger weapons to use in their favourite games. The items can be purchased outright, but users are also able to buy secret crates, which hold unknown rewards. The crates are usually cheaper than buying some the items outright, but there is an element of chance involved.

Video games such as Fortnite have been booming in popularity with younger gamers and Fortnite “skins” are an example of these in-game upgrades. The problem with this type of payment model is that players are usually teenagers, or younger, and there is an element of peer pressure in having the latest upgrades when playing online with friends.

Buying multiple reward crates can be costly, but they also have the same psychological urges as casinos, where those who are on a losing run might try to purchase more crates in the hope of hitting the jackpot. The pricing of these items is also not in dollars or pounds, but in virtual currencies like V Bucks, so there is no “anchoring” of purchases to the real world.

How is Loot Box Gambling Like Playing at Casinos not on GamStop?

The purchase of reward boxes has a similar reward mechanism as those used in non-GamStop casinos and the same psychological tools are used by programmers and game development companies to entice buyers. Buying loot boxes with secret rewards is very similar to having a spin on a casino reel as users are hoping to get lucky with a big item. The loot boxes can even have value in third-party marketplaces, such as the Steam community, where gamers go to trade their loot. Again, this can amplify the psychological desires to win.

A recent development in April of 2021 was Belgium and the Netherlands deciding that these in-game loot boxes were too close to gambling, and they are now illegal in both countries. The decision by these two countries could put pressure on others to follow suit and ban, or restrict the use of loot boxes.

E-Sports Gambling and In-Game Items Currencies

The world of E-sports has been another gaming scene which has shown explosive growth and the games have become a staple at online sportsbooks. Some sites, such as CSGO BetsYOLO have allowed UK gamblers to exploit a loophole in the GamStop rules by betting on events using tradeable items, rather than a real currency.

Punters are still making bets on the outcome of a match, but they are doing so with an in-game payment method, which is another means to gamble on the outcome, without sticking to the UK rules.

Cryptocurrencies are another payment option that are becoming common for in-game purchases and the Decentraland blockchain project is setting up an online casino within their virtual role player world, which was sponsored by the Atari game development company. There is no gaming authority in the virtual world and also no third-party resolution or self-exclusion, so it is yet another area that is evading the view of regulators.

Gambling in the UK vs Non-GamStop Casinos

Online casinos not on GamStop are really offering the same opportunity as gaming sites with their in-game purchases. Players can bet on the outcome of e-sports, or on the chance of a big win in a loot reward crate, so these purchases are very similar to using cash for gambling.

According to non-gamstop-casinos.com, British gamblers have been more attracted to Non-UK casinos recently because they offer a lighter regulatory environment than the UK scene. The GamStop program is a non-profit organisation that works with the UKGC and offers bettors a lengthy self-exclusion scheme if they have shown signs of problem gambling. Alongside these rules, UK punters have seen restrictions on bet sizing and many in-play rules, such as spin timers. These measures can help to reduce the psychological effects for problem gamblers, but they also punish those who are more comfortable with their gambling habits.

Non-GamStop sites are simply casinos and sports betting sites which are not required to follow the UKGC regulations because they are located overseas. Some may view them as a loophole to avoid GamStop rules, but the video gaming industry is an environment which is light on regulation and the use of loot boxes is really exploiting the same psychologies in players. This was not the intended consequence when creating the in-game rewards, but players have to know the risks and avoid these games if they have experience with problem gambling and are using GamStop.

Conclusion

Video games are seen as a more harmless hobby than using sportsbooks or casinos, but there are growing similarities between both environments. Loot box reward systems are operating with their own in-game currencies, and these have the potential to cause problems for those who have experienced gambling issues. The UKGC brought in the new rules to protect players, and their families from the fallout of gambling addiction and it is a worry that video game players are even younger.

Belgium and the Netherlands have seen the problem and they have moved to clamp down on the loot box movement and it’s likely that we will see other countries follow suit.

It could be argued that the video gaming industry is now acting like an unregulated casino and users should be careful when playing these games. Gamblers who have signed up for the GamStop service should be aware of the similarities in both models and should not use it as another loophole to avoid the exclusion rules.