The UK government has decided not to change the law in relation to loot boxes.

In 2020 the government issued a “call for evidence” to understand the impact of loot boxes. This followed a 2019 manifesto commitment made by the government to review the Gambling Act 2005 with a particular focus on tackling issues around loot box mechanics in video games.

The call for evidence examined links to gambling-like behaviour and excessive spending in games, identifying a range of potential harms associated with the purchase of loot boxes (including harms which have been associated with gambling, but also a range of other potential mental health, financial and ‘problem-gaming related’ harms).

However, whilst the call for evidence found an “association” between loot boxes and harms, it was unable to determine whether there is a “causative” link. It also found that games companies and platforms have introduced several protection measures for consumers with regards to loot boxes and in-game spending, which have continued to develop in recent years.

As a result, the government says it wants to see improved protections for children, young people and adults with regards to loot boxes, and to support better longer-term research into the impacts of video games. To achieve this, the government’s view is that:

  • purchases of loot boxes should be unavailable to all children and young people unless and until they are enabled by a parent or guardian;
  • all players, including children, young people and adults, should have access to, and be aware of, spending controls and transparent information to support safe and responsible gaming; and
  • better evidence and research, enabled by improved access to data, should be developed to inform future policy making on loot boxes and video games more broadly.

The government also considered other actions such as improved industry-led protections (championed by games companies and platforms); making changes to the Gambling Act 2005; and strengthening other statutory consumer protections. On those issues, decisions landed as follows:

  • DCMS will convene a technical working group to pursue enhanced industry-led measures to mitigate the risk of harms. The government will also launch a Video Games Research Framework to support better research, enabled by improved access to data, on the positive and negative impacts of video games. It says that an improved evidence base will support policymakers, the games industry, and players on future work to maximise the positive impacts of games, and to reduce the risk of negative impacts, including harms.
  • The government does not intend to amend or extend the scope of gambling regulation to cover loot boxes currently. It says that changing the Gambling Act with regards to loot boxes would have significant implementation challenges and risks of unintended consequences. For example, it would require substantial changes to the gambling tax system, would dramatically increase the scope and costs of running the Gambling Commission, and it could risk capturing other unintended aspects of video games or activities outside of video games with a random reward mechanism.
  • It also believes that the UK’s current consumer and data protection legislation and guidance provides a strong foundation for mitigating the risks of harms associated with loot boxes, including for example the ICO’s Age-Appropriate Code and the CMA’s 2014 Principles for online and app-based games.

What does this mean for games companies?  It will come as a pleasant surprise that there will not be yet more regulation (for now).  It will also be welcome news that the government has acknowledged tech companies have already put measures in place to protect users from harm.  However, it is clear that the government expects games companies to go further and will be keeping an eye on the sector to ensure that its recommendations to ensure adult oversight of purchases and to facilitate spending controls, are indeed acted upon.