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.

They're called the Office of Liquor and Gaming Regulation, and as far they're concerned, they weren't really placed to say whether loot boxes constituted gambling.

"Regrettably, as a regulator of legalised gambling in Queensland, I am not in a position to definitively advise whether 'loot boxes' or similar video game features would constitute 'gambling'," the regulator's Robert Grimmond replied.

"However, I can confirm that video gaming which provides for 'loot boxes' would not fall within the meaning of a gaming machine as defined under the Gaming Machine Act."

The key difference under the Gaming Machine Act - originally passed in 1991 - is whether loot boxes would qualify as a "gaming machine".

In Grimmond's view, and under the legislation, loot boxes would have to allow for users to bet in-game or real world money and receive winnings from that bet.

"In view of the above, I do not consider that 'loot boxes' at the cost of real currency would constitute gambling. As such, the OLGR would have no legislative authority to regulate or ban these products."

Grimmond recommended chasing up the Australian Communications Media Authority (ACMA), which has powers to oversee and ban certain "interactive gambling services" advertised or provided in Australia. I've contacted ACMA for a reply, and I'm still awaiting responses from other developers on the matter.

One developer did get back to me: EA. Curiously, EA referred me onto the Entertainment Software Association. I asked them for their response on the recent news about legislators airing concerns about loot boxes, the response from the VCGLR, and Battlefront 2 being called a "Star Wars themed online casino".

The ESA's reply was this:

Loot boxes are a voluntary feature in certain video games that provide players with another way to obtain virtual items that can be used to enhance their in-game experiences. They are not gambling.

Depending on the game design, some loot boxes are earned and others can be purchased. In some games, they have elements that help a player progress through the video game. In others, they are optional features and are not required to progress or succeed in the game. In both cases, the gamer makes the decision.

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Comments

    If anything the Queenslander echoes his Victorian counterpart, saying the current legislation doesn't cover the issues being raised. Under current definitions, money has to be exchanged for the chance to win more money. The argument to change legislation is that the items being won in these loot boxes have inherent monetary value through rarity tiers.

      Right. It's not gambling as defined by legislation. It's a lucky dip. If you could exchange your winnings for cash or otherwise trade them, it might be gambling.

      Hawaii's doing the right thing by proposing NEW legislation.

      Yeah it sounds like he has a different definition and a narrower remit than the Victorian one.

      That said the ESA's response feels kind of scummy to me, @alexwalker it might pay to have a line in there mentioning that the ESA is an industry association that is specifically on the side of publishers. Context of the article might let people misread them as being another regulation body, I needed to google them to make sure they were who I thought after the article =P

      As long as those item's can't be traded for cash (i.e. Overwatch loot boxes/items), it probably isn't a problem under existing legislaton.

      Ask the same question using Counterstrike items and skins that can be traded via auction (and therefore has an easily referenced market value), and it might be different?.

    LOL, 'the gamer makes the decision' - it's all the gamer's fault! Doesn't matter how manipulative or predatory EA and other Loot Merchants are, just shove all the blame on the gamer. "I might have given him a taster, supplied the drugs and put the needle in his hand your Honour, but he was the one who injected!"

    Hold on. I'm having trouble parsing these quotes.

    1. He's not able to definitively comment whether loot boxes are gambling.
    2. Loot boxes aren't gaming machines.
    3. In light of the above (which above?), loot boxes aren't gambling.

    Is there more to this statement?

    I can't tell if my dog is an animal.
    My cat is an animal.
    In light of the above, my dog isn't an animal.

      It sounds more like "I don't know if loot boxes are gambling, but they don't fall under my jurisdiction, so I'm not making a call.

      So

      I don't know if that dog is hungry
      It's not my dog
      I'm not feeding that dog

      I am not in a position to definitively advise
      In view of the above, I do not consider that

      Isn't my jurisdiction but if I had to make a call about the current law what I think is.....

      The original email had a a clarification of the legislation to which "above" referred to.

    to be fair it's just hit 1980 in Queensland

      I'd say 1993, because pokies were legalised in Qld in '92. Which would fit better with this mentality.

      This, I never knew why Queenslanders got so much shit after moving here from NZ. I get it now.

    Loot boxes are a voluntary feature

    Only in the sense that anything in a video game is voluntary. Playing certain modern games without interacting with loot boxes certainly feels like only accessing a portion of the game, rather than the "full" experience.

      Pokies are a voluntary feature of every RSL.

        Exactly what I thought. Isn't the issue that gambling creates a scenario that vulnerable people have their active choice of participation reduced?

          I mean, if you follow that line of thought you could legitimately make a case that casinos were restaurants with the 'voluntary feature' of gambling. Where on earth does this counter-logic end where corporate interests are concerned?

        They also have permits, legal compliance and pay lots of state revenue.... do you think EA is doing any of that.

        Seriously government should get on this do you think microtransactions are paying their fair share of taxes.

          Yeah, that was my point.

          EA has fully exploited the psychology of gambling machines (see similarity of music and flashing lights on every loot box opening), so loot boxes are equivalent to pokies and should be treated as such.

    ESA's "participation is voluntary therefore it isn't gambling" defence is a bit weird. I don't remember ever being legally forced to sit down at a blackjack table.

      Crown casino driving around in black vans abducting people and throwing against the roulette table saying Red or Black, Red or Black.

      I'd say their argument there is more that it's not the main part or function of the game, it's an optional sideline. Whereas for something like blackjack the entire game is gambling.

      I still think loot boxes are gambling, but I can see what they're trying to base their argument on.

        Maybe. But we all know the way it was originally implemented into BF2 was so that any reasonable person would want to buy an accelerated experience.

    Thats bullshit.

    7 years ago I couldnt compete in a World of Warcraft Arena competition (esports) cause Queensland said it was equal to online gaming which they classed with online poker , therefore was online gambling by definition unless Blizzard was willing to submit for a permit.

    What changed so much that now there is literally poker machine wheels spinning on a kids computer game that takes real money to spin.

      And you still cant because those competitions have real world prize values and blizzard, like ZOS (elder scrolls online) dont want to have to deal with the regulation that australia has around this, and so we are excluded from those comps. Yes, it sux. Australian law is difficult to deal with so we get excluded. again. I do blame our laws/politicians for this.

      EA is bad for the way they did this, but they are not the only loot crates around. Not all loot crates are bad and there should not be a blanket ban on them

    We need NATIONAL regulations on stuff like gambling. Get rid of state specific laws and have one national law that applies to everyone. If we don't, we're going to end up in situations where one state considers something in a video game gambling while another doesn't which may or may not affect how it can be sold in that specific state and it'll just get incredibly messy.

      We do... its the Australian Communications and Media Authority. They are the regulator of the online gambling laws.

    Queensland is in a state election at this moment polls on Saturday, caretaker provisions are in place so as aan agency they probably cant make big statements... has someone tried to ask the pollies what they think that Computer Games and Mobile Phone games turning into illegal gambling machines for teens?

    So he looked at it for 5 minutes. Said nope doesn't match our antiquated legislation and decided to move on. Instead of looking deeper into the problem and maybe seeing that the legislation needs to be modernised.

      The question posed to him was are loot boxes gambling under the current definition

      He's a regulator not a legislator. It's his job to enforce the current laws, not make new ones. That's a politicians job.

    ...under the legislation, loot boxes would have to allow for users to bet in-game or real world money and receive winnings from that bet

    This indicates to me that it is more likely gambling than anything. Depends on your definition of "winnings" though. If it has to be monetary winnings, then no it isn't gambling. If your winnings can be material (or digital) items with inherent value then yes, it's gambling. You pay for a loot box with real money, and whilst you're guaranteed to get "a" reward, it's complete chance as to how rare or valuable that reward is.

    I'd equate this to things like the Home Lottery where you can win various different items of different value, those are all considered gambling (at least in SA where I am).

    It's always interesting seeing the discussions that come up in relation to this. Especially the comparisons to existing "Lucky dip" mechanisms like Gacha machines or booster packs for TCGs. It almost feels like the interactivity argument for the difference in ratings between games and movies.

    There are differences between booster packs and loot boxes that contribute to the feeling that they are more akin to gambling mechanisms and one is that they are less physical. It's the same reason people hate microtransactions but had no problems with arcade machines eating quarters. Because you aren't paying physical money or seeing a growing amount of physical items you're less likely to realise when enough is enough.

    Also akin to the more predatory forms of microtransactions it's about the tradeoff between money and time. You can spend time grinding loot boxes but if the effort bar is too high then that paid option starts to look really good and you're more likely to justify the money spent as condensed time and effort rather than a gamble. It's the same with gambling. You can go out, earn money at work but if that effort bar is too high then that option to instantly win a bunch of cash sure starts to look good.

    Compare that to booster packs though where your only option is to buy packs. There is no option that consumes time instead of money so there's not that same subversive psychology that spending money is the easier option. At the end of the day though, anything where you spend money on a game of chance, whether it's the pokies, loot boxes, booster packs or even playing the stock market it's the definition of gambling.

    Lucky dips aren't gambling. You pay $2 for $2 worth of random stuff. If the lucky dip was promoting that 1/100 could win a PS4 for the entry price of $2.......then yes, that is gambling.

    But in that sense I guess you could call any ticket raffle gambling.

      $2 lucky dips hardly ever contain $2 worth of random stuff though. Why? Because the vendor wouldn’t make a profit.

      Gambling or not, EA put loot boxes in to fleece people who had already paid for the game. They didn’t put them in to enhance the experience or make a better game. The wanted bigger profits through a lucky dip system.

        Depends on your definition of worth. They buy at wholesale rates and then sell at retail for $2, it just happens to be random.

      The lucky dip example is flawed... cause the laws state most games of chances for chance on items if monetary value... its why the footy club needs permits to run meat rafflesfor a non profit. (though many dont)

      Its usually the value and nature of the competition gets a looking over to values associated with it... also when was the last time someone spenyt a $1000 dollars on a luck dip. (Est. Hardcore overwatch expenditure since release)

      Federal government needs to put a bill forward for a Microtransaction in Mobile Phone and Computer Software law and closevall these loop holes.

      That's why any raffle with a prize above a certain threshold has to be properly licensed.

      So then I imagine a store which entire business model is to sell only lucky dips and have marketing throughout telling you what amazing products might be inside. All of a sudden I hate lucky dips too.

    Typical bureaucrat! May as well be a robot lol

      Has to be they might have a change of government next week.

    Hahaha Queensland. The Florida of Australia.

    Again, there is the legal definition of gambling, and gambling under laymen terms. All current legislation do not classify lootboxes in almost all their variants as gambling. That doesn't mean they aren't, however in order to regulate them will require new legislation. Thus far China and Japan are the only countries to my knowledge that have introduced legislation specifically targeting lootboxes, and while not exactly classifying them as gambling, they recognise the real dangers they pose.

    As a Queenslander, I'm surprised none of the political parties picked up on this. With a state election looming (literally today), it would be wise to consider flagging changes to the Gambling Machine Act 1991 (Qld). EA has opened a can of worms which will affect the entire video game industry.

    well Battlefront 2 may not be equal to a slot machine but this is: https://www.reddit.com/r/gaming/comments/7eqocj/this_is_what_progression_looks_like_in_need_for/

    it seems you actually play a slotmachine in need for speed payback for car upgrades, and like battlefront 2 EA is kind enough to allow people to dump a load of money on them for a couple of nfs bucks(aka speed points) which you can spend on loot superior to that which you earn through "honest"(lets face it, there is no way you can feel honest playing these games) gameplay, just to twist the knife in you.

    Legislators need to be careful here.

    If they ban loot boxes then developers simply re-skin the boxes to something else.

    If they ban something more broad, then the only thing i can think of is banning the use of money to buy anything that has random chance... Which is way to broad.

    I think the focus here should be on the ability for players to turn the prizes of loot boxes back into money.

    On top of the gambling concerns there is also another form of exploitation here: sunk cost fallacy:
    I don't think it's reasonable for games or other products to charge $70+ and then ask for an undefined amount more money to unlock content. Downloadable or unlock-able content at a fixed price is fine but it's the undefined price for more content in product that you already paid some money for that is the big exploitation in my opinion. The original game should either be free, removing the initial sunk cost until the customer has seen the rules within the game, or define and cap their IAP prices for additional content so customers can make informed decisions.

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