French gambling regulator rules that loot boxes in video games are not a form of gambling

By Shabana Arif, Thursday, 5 July 2018 11:42 GMT

French gambling regulator rules that loot boxes don’t qualify as a form of gambling.

As the ongoing loot box controversy continues, France has weighed in on the subject with its gambling regulatory body, the ARJEL, stating that although microtransactions in games “are undermining public policy goals for gambling,” legally, they are not a form of gambling.

The ARJEL released a 2017-2018 activity report on loot boxes in games that was broken down by Sebastian Schwiddessen of Baker Associates, via PC Gamer.

Despite not legally falling under gambling, the ARJEL remains critical of loot box practices, saying they rely on making players feel like they’ve “barely missed” the item they wanted, thereby incentivising them to come back for more, in much the same way as slot machines do.

Schwiddessen points out that due to France being a “key market,” its decision on the loot box debate would have a greater impact than that of the Belgian and Dutch regulatory bodies, both of whom have ruled that loot boxes constitute gambling.

The Belgian Gaming Commission has even gone so far as to threaten prosecution of companies that don’t change or remove their loot boxes to fall in line with the country’s gaming legislation.

Loot Boxes

The larger issue the ARJEL is focusing on is one of off-platform trading of in-game items, which isn’t something generally allowed or approved of by devs and publishers. The ARJEL has stated that “a certain number of investigations are in progress” with regards to the authorised selling of items from loot boxes.

Loot boxes could be considered gambling if they generated items with real-world monetary value, but the regulatory body has specified that “it would still be necessary…that [the game operator] participates in this monetisation” in order to qualify.

France joins the UK in ruling that loot boxes don’t constitute gambling, while Australia has joined the Netherlands and Belgium in stating that they are a form of gambling.

After the trouble with Star Wars Battlefront 2, EA announced that Battlefield 5 won’t feature loot boxes, while Nintendo boss, Reggie Fils-Aimé recently commented that loot boxes aren’t so bad.

“What we believe at Nintendo is that a gameplay mechanic that offers the consumer something to buy that they’re not sure what’s inside can be interesting as long as that’s not the only way you can get those items,” he said.

“And that’s where some developers have made some mistakes. For us, its one of many mechanics we can use to drive on-going engagement in the game.”

Meanwhile, in South Korea, three big publishers have been fined over loot boxes.

In the US, the State of Hawii has started investigating legislation that might prevent the inclusion of loot boxes in games, or at least prevent the games from being sold to minors.

The issue is a tricky one to say the least, that is garnering more attention as it goes on.

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