Australia's Telco Regulator Is Keeping An Eye On Loot Boxes

Earlier this week we heard from people within the Queensland and Victorian statutory gambling regulators about loot boxes, and whether they constitute gambling. Today we've got a third body to add to the list: the Australian Communications Media Authority (ACMA).

ACMA is the independent federal body that regulates and oversees advertising on the internet, radio, and broadcast TV in Australia. They're also responsible for enforcing the federal Spam Act, running a hotline for Australians to report offensive online material (including child pornography) and the Do Not Call Register database.

ACMA also oversees the Interactive Gambling Act, which is the relevant piece of federal law that affects things like online pokies, poker website, and betting in general. It's why Queensland's gambling regulator recommended people contact ACMA with regards to loot boxes. Most state gaming and gambling legislation was written with horses and pokies in mind, not Tracer skins and virtual crafting parts for Star Wars.

Queensland's Gambling Regulator Doesn't Think Loot Boxes Are Gambling

Yesterday we had comments from a senior analyst at Victoria's gambling commission on loot boxes. Today, Queensland's statutory regulator has their turn - and their take on loot boxes is a fraction different.

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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.

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I contacted ACMA earlier this week, pointing them back to noise being made about loot boxes at home and abroad, and asked them some simple questions. Did they believe loot boxes constituted gambling, either mechanically or under the definition of Australian law?

And was ACMA keeping an eye on loot boxes and their implementation in video games, especially given that an analyst at the VCGLR indicated they had spoken with their "counterparts" in Australia and elsewhere about the topic.

Late last night, I got a reply from ACMA's media team. It was short, but it confirmed two things: loot boxes don't constitute gambling under the Interactive Gambling Act (IGA), but the regulator is keeping an eye on proceedings nonetheless:

In general, online video games, including games that involve ‘loot box’ features, have not been regarded as ‘gambling services’ under the Interactive Gambling Act 2001, because they are not ‘played for money or anything else of value’. That is, the game is not played with the object of winning money or other valuable items.

However, the ACMA is monitoring the use of loot boxes and the use of other similar in-game mechanics that have gambling-like characteristics.

ACMA also referred me to a post about reforms to the IGA Act, which were passed in mid-September. Put simply, the reforms give ACMA "disruption measures to curb illegal offshore gambling activity", clarifications around "click-to-call" in-play betting services and amendments that would "make it clear that it is illegal for gambling companies to provide certain gambling services to Australians" without an Australian gambling license.

None of that refers to loot boxes, of course, but it's a potential red flag for esports.


Comments

    Same again, current legislation does not cover immaterial gains like loot boxes. You're wasting your time asking them any questions, if you believe loot boxes should qualify as gambling, speak to your local MP and raise the issue.

    ...games that involve ‘loot box’ features, have not been regarded as ‘gambling services’ under the Interactive Gambling Act 2001, because they are not ‘played for money or anything else of value’. That is, the game is not played with the object of winning money or other valuable items.

    I believe this is one of the main reasons we've seen many games with microtransactions remove the ability to trade items between players like Destiny did (Obviously it's partly to make it so that you can't "complete the set" of collectable items by just trading with ther players and you'll need to continually work/purchase lootboxes to get it). Once you can trade items you can compare their value against other items and you've established a marketplace where all items have real-world monetary value.

    What needs to happen (in my opinion) is that the term "value" needs to be redefined to include a wider scope where the value isn't necessarily strictly monetary. Let's say one of the items in the game is a golden gun which 1 hit kills any other player, wildly imbalancing the game. Gaining this would directly impact the way I play and obviously have a high value for many people. The problem is, equating this with a monetary value is very tricky.

    I'd love to see how this situation is resolved because while I'm 100% against the BF2 model (pay for a game, microtransactions from 'pay to win' lootcrates which directly impact gameplay fund further development), I'm 100% for the Overwatch model (pay for a game, optional cosmetic microtransactions with zero gameplay impact fund all further development including new characters, maps, etc. for all players).

      Value isn't specifically defined in any of the relevant legislation as far as I can tell. So given that the phrasing used to define gambling is "anything else of value", and not "anything else of monetary value", I would be surprised if the definition only covered monetary value.

      That being said, someone would need to apply to the courts to get them to clarify the definition, and if the court defines 'value' objectively and not subjectively - which is quite likely - they would probably say that cosmetics in a computer game have no value to a layperson (see also: 'no it's the children who are wrong'), and thus have no value generally in relation to gambling legislation.

      Ideally the relevant state governments could just amend their legislation to clarify what these terms mean (or even better, the Federal Government) but err.... yeah, not likely to happen any time soon.

        It'll be objective. Reasonable man test. Almost no chance of finding value at common law; it'd be akin, as an argument, to illusory consideration.

      I'm finding myself falling against both the Battlefront AND the Overwatch model.

      Right now, the difference between those arguments is this: If you're against BF2 and for Overwatch, your argument is essentially that you don't want people being able to pay to get an advantage over you, so that the game isn't fair and weighted towards people with money.

      There's a very different argument in play, though, which is that the systems which encourage loot-boxes are manipulative, and tap into elements of human psychology that addictive personalities and children in particular do not have adequate defenses against, resulting in exploitation.

      Whether the incentive is looking pretty or having power over other players, the end-result is the same: vulnerable people who can't necessarily afford it exploited by knowingly manipulative systems. Having multiple different incentives simply broadens the market who can be exploited.

      Despite being fine with having paid for the odd MTX myself, I'm against rampant, unchecked, unregulated financial exploitation. I can handle only buying a couple loot boxes as a one-off up-front, "Hey, devs have to eat," for F2P titles, while ignoring them in box-priced titles... but many can't. That's not a mature decision that a child can necessarily make, for example.

      I don't think non-gamer adults give much of a shit if some people can buy advantages in video games over others. That's the fucking essence of our capitalist society. But we do typically try to implement some protections for the psychologically vulnerable - and children - to help prevent them destroying their lives over various addictions.

        I was for cosmetics like Overwatch, but now I am not.

        In the last 20 months, if you factor in all the seasonal loot boxes a hardcore player could buy 50 to 100 loot boxes (most loot box opening steams and vods show 100)... thats between $480 to $1000 dollars in less that 2 years. Thats obscene.

        I don't believe random loot boxes of any kind should be legal in a game that does not offer parental controls to lock access to microtransactions, and that does not give the player the option to buy any cosmetic item as a straight single purchase (I want Legendary DVA skin, that will be X amount). Forcing players into your gambling den, is not ethically or morally right regardless of its cosmetic or not.

        I completely agree with this. Much of the debate with governing bodies in defining gambling and whether or not loot boxes should be included is centred on the question of value of virtual products which is missing the point.
        Whether the goal is a skin which doesn't affect gameplay at all or a buff which is essentially p2w, the systems implemented by developers are designed to tap into players' psychology and addictive tendencies with the goal of encouraging repeat purchases.
        Bright colours, flashy graphics, twinkly sounds etc are all designed as carefully as games in a casino to psychologically reward a player for opening a loot box. It is appalling that this is permitted in games played by children and those with compromised self control, when these precise tactics are highly regulated in casinos and pubs.

    Just go to all the authoritoies as well as your government reps in State and Local and ask them.

    The ACMA and ACCC need to sit down with Justice and create a new micro transaction law. Australians are getting fleeced and exposed to rthings clearly circumventing the intent of the law...literally people are beung robbed by mobile phone and only cause the technoligy moves faster than the law. All in software purchases need to be regulated, must not sell to children, must not simulate gambling and must pay their taxes.

    I was hoping the ACMA would say more, but knowing their last amensment still cant tackle mobile phobe berting sites is ridiculous. (Which is why Victoria mentiined Bet365).

    New InApp / Microtransaction Laws are needed with consumer, criminal and gambling protections

    How does cs:go, with it's marketplace for trading items, not count as gambling then?

    Buy loot box, sell item, have cash winnings. Or not. Seems pretty gambley.

      Absofuckinlutely. The definition needs to be adjusted, in relation to gaming, to "gain", instead of "monetary gain". If you are paying for a possible advantage then you're gambling on that advantage.

        Well It's still covered in the definition, since, as mentioned below, it covers chips.

        That is, the game is not played with the object of winning money or other valuable items.

        Skins, when tradeable, have a very tangible value. While you might not be able to make a case for overwatch or bf2, cs:go might be over the line.

      Like casino chips - the chips themselves aren't currency, but you can cash them out at the end of the day much the same way as you can cash out skins?

      Its messed up.

      Those morons that got caught with the CS:GO lottery chaos, got charged for "promotional" violations under trade and communication laws, they were never arrested for their gambling crimes. And because the US Federal Government FTC was holding them for trial, the state gambling authorities couldn't charge them for some dumb reason... and other countries couldn't extradite them either. They walked off scott free cause the wrong agency arrested them.

    I'm not entirely comfortable with cosmetic items either. I saw my son get a little too obsessed with CS:GO skins. He never gambled (as far as I'm aware) in the gambling sites but he poured too much money into buying skins for my liking. Fortunately he realised of his own accord that he was wasting money and stopped.

    Yes, cosmetic items don't effect the game like the BF2 loot boxes do but they prey on the same desires and use the same mechanisms to do it. Personally I'd like to see the random nature of loot boxes banned. By all means sell items but let the buyer know what they are purchasing.

      Yeah I agree. The problem with lootboxes is the predatory psychological tricks they use to try and get people to keep buying them. Whether or not the contents are cosmetic is irrelevant as far as I'm concerned.

      Good for him... and here here ban all random microtransactions.
      But I fear for my nephew that when he grows up he will learn lessons on gambling... before primary school teaches him basic Algebra.

    Oh look. ACMA says no value. Wish I'd thought of that earlier this week.

    So instead, consumers are paying money for items of "no value"
    I think thats a problem too. No matter the direction you look at it, its not good, any which way.

    EA made 800 million dollars on microtransaction on a single FIFA title.
    Thats 800 million dollars for NOTHING OF VALUE. (and I bet they didn't pay taxes on that)
    Overwatch hardcore players have spent over $1000 dollars on cosmetics that have ZERO VALUE.
    Battlefront II added microtransactions, that made 2 governments publicly villify them and declare them gambling aimed at chilren... PRICELESS!

    The reasons gambling laws exist is not to police gambling (Seriously QLD you were way off), its to stop people being victimised by shonky fraudulant scam artists and snake oil salesman promising you untold riches, and manipulating the person or the game in a way that turns into nothing but and empty wallet and shonky goods that have ZERO VALUE.

    Their needs to be an inquiry into microtransactions, either by the authorities of our country / states or the senate, new laws need to be drafter to end this. Mobile phones are robbing people daily and now AAA games industry is doing the same.

    * All electronic software that sells microtransactions to Australian citizens, must comply with new laws and require permit to operate in Australia.
    * All products must clearly label that in-app purchases are in their product (big seal and logo)
    * Any microtransaction can NOT contain a random element, such as a random prize or loot box mechanic, and must clearly state exactly what the player purchases in full detail (cosmetic, game content, extra stories etc)
    * Any product containing random mechanics similar to any form of real money gambling (such as poker machines), are subject to the fullest extent of the legalised gambling authorities of the state and ACMA
    * Microtransactions can not effect a games performance, and the game must not impede or penalise a player who does not purchase microtransactions (including road blocks, unfair matchmaking, increase difficulty or lengthy progression systems).
    * Must not contain in-game advertising that pressures players into buying micro-transactions or advertise other games that do.
    * Must include information if the game will ship with microtransactions, and what they will constitute, the day of the games is available for sale (including pre-orders). To allow parents to make an informed decision.
    * Must contain parental controls with clearly defined set-up instructions, to allow the switching on/off of microtransactions with password locks.
    * Must present themselves, financial records and game codes to authorities for audit and compliance investigations.
    * Must display purchases in Australian dollars and all purchases are to be held in an escrow account for 30-60 days by Federal Agency (so they ain't scamming users or refusing to pay their fair share of taxes).
    * Must abide by all statutes of Australian Consumer, Media, Advertising, and Competition laws in Australia, regardless of the country of origin.
    * Heavy fines for failure to comply equal to the fines for individuals and companies under unlicensed gambling. (up to 1.1 million dollars per day for serious offences)
    * The power of the authority to review, classify and ban any product they don't believe will comply with the Federal law, including if a game adds micro-transaction to a game post-launch that greatly differ from initial design / release.

    Thats what I think, a new Software Micro-transations Law. The loop hole needs to be closed, any and all software needs to be consumer friendly, and anti-gambling to protect everyone.
    (They also need to start paying their god damn taxes *stares at Apple and EA*)

    It all boils down to the definition of value. Someone needs to explain it in a way those old codgers can understand. Maybe some analogy involving golf balls with inbuilt homing technology.

      Thats easy. After paying your green fees you walk up to the tee and the Club tells you that they supply the balls and gives you a ball. Then tells you can get a better clubs and ball in a box if you pay extra. The ball may just be cosmetic a different colour, flashing lights, gold plated... or at some clubs it could be the next great thing in technology that is easier to hit and is swarn by many to take 3 strokes off your game. If there is only a 1% chance to get that Uber golf ball how many boxes of golf balls do you buy until you think its gambling or unfair or explotative... what if the club matches you against someone who has an Ubergolfball, do you think its fair that player has this advantage over you when you are clearly a better golfer. What if the next week the Club tells you to leave you golf clubs behind cause now you have to random draw your clubs too and they hand you a pair of grandfather sticks when they match you with someone with a fullset of golf clubs from a pro golfer.

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