Call to regulate video game loot boxes under gambling law and ban their sale to children among measures needed to protect players, say MPs. Lack of honesty and transparency reported among representatives of some games and social media companies
in giving evidence.
The wide-ranging report calls upon games companies to accept responsibility for addictive gaming disorders, protect their players from potential harms due to excessive play-time and spending, and along with social media companies introduce more
effective age verification tools for users.
The immersive and addictive technologies inquiry investigated how games companies operate across a range of social media platforms and other technologies, generating vast amounts of user data and operating business models that maximise player
engagement in a lucrative and growing global industry.
Sale of loot boxes to children should be banned Government should regulate loot boxes under the Gambling Act Games industry must face up to responsibilities to protect players from potential harms Industry levy to support independent research on
long-term effects of gaming Serious concern at lack of effective system to keep children off age-restricted platforms and games
MPs on the Committee have previously called for a new Online Harms regulator to hold social media platforms accountable for content or activity that harms individual users. They say the new regulator should also be empowered to gather data and
take action regarding addictive games design from companies and behaviour from consumers. E-sports, competitive games played to an online audience, should adopt and enforce the same duty of care practices enshrined in physical sports. Finally,
the MPs say social media platforms must have clear procedures to take down misleading deep-fake videos 203 an obligation they want to be enforced by a new Online Harms regulator.
In a first for Parliament, representatives of major games including Fortnite maker Epic Games and social media platforms Snapchat and Instagram gave evidence on the design of their games and platforms.
DCMS Committee Chair Damian Collins MP said:
Social media platforms and online games makers are locked in a relentless battle to capture ever more of people's attention, time and money. Their business models are built on this, but it's time for them to be more responsible in dealing with
the harms these technologies can cause for some users.
Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws
caught up. We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.
Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products.
Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It's time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify
Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults.
Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of
the Speaker of the US House of Representatives, Nancy Pelosi.
Regulate 'loot boxes' under the Gambling Act:
Loot box mechanics were found to be integral to major games companies' revenues, with further evidence that they facilitated profits from problem gamblers. The Report found current gambling legislation that excludes loot boxes because they do not
meet the regulatory definition failed to adequately reflect people's real-world experiences of spending in games. Loot boxes that can be bought with real-world money and do not reveal their contents in advance should be considered games of chance
played for money's worth and regulated by the Gambling Act.
Evidence from gamers highlighted the loot box mechanics in Electronic Arts's FIFA series with one gamer disclosing spending of up to £1000 a year.
The Report calls for loot boxes that contain the element of chance not to be sold to children playing games and instead be earned through in-game credits. In the absence of research on potential harms caused by exposing children to gambling, it
calls for the precautionary principle to apply. In addition, better labelling should ensure that games containing loot boxes carry parental advisories or descriptors outlining that they feature gambling content.
The Government should bring forward regulations under section 6 of the Gambling Act 2005 in the next parliamentary session to specify that loot boxes are a game of chance. If it determines not to regulate loot boxes under the Act at this time,
the Government should produce a paper clearly stating the reasons why it does not consider loot boxes paid for with real-world currency to be a game of chance played for money's worth.
UK Government should advise PEGI to apply the existing 'gambling' content labelling, and corresponding age limits, to games containing loot boxes that can be purchased for real-world money and do not reveal their contents before purchase.
Safeguarding younger players:
With three-quarters of those aged 5 to 15 playing online games, MPs express serious concern at the lack of an effective system to keep children off age-restricted platforms and games. Evidence received highlighted challenges with age verification
and suggested that some companies are not enforcing age restrictions effectively.
Legislation may be needed to protect children from playing games that are not appropriate for their age. The Report identifies inconsistencies in age-ratings stemming from the games industry's self-regulation around the distribution of games. For
example, online games are not subject to a legally enforceable age-rating system and voluntary ratings are used instead. Games companies should not assume that the responsibility to enforce age-ratings applies exclusively to the main delivery
platforms: all companies and platforms that are making games available online should uphold the highest standards of enforcing age-ratings.
The Swiss Lottery and Betting Board has published its first censorship list of foreign gambling websites to be blocked by the country's ISPs.
The censorship follows a change to the law on online gambling intended to preserve a monopoly for Swiss gambling providers.
Over 60 foreign websites external link have been blocked to Swiss gamblers. Last June, 73% of voters approved the censorship law. The law came into effect in January but blocking of foreign gambling websites only started in August.
Swiss gamblers can bet online only with Swiss casinos and lotteries that pay tax in the country.
Foreign service providers that voluntarily withdraw from the Swiss market with appropriate measures will not be blocked.
Grand Theft Auto Online's newest scenario is the Diamond Casino and Resort in Los Santos. And of course the games features a rather one-sided form of gambling where only the house can win.
Players can buy game money which can be used to gamble at the tables of the Diamond Casino. There's no mechanism to cash in any winnings for real money, but presumably it can be used elsewhere in the game. But just like the real world, players
can certainly lose and may be tempted to spend more real money in a forlorn hope of winning their losses back.
Given that loot boxes are causing so much controversy around the world, then this latest venture is surely asking for trouble. Forbes comments:
And in the sense that gambling is the sort of thing that can lead to problematic behavior, it's not hard to imagine how these new mechanics could start causing people with addictive personalities some issues.
Reddit has published a list of 50 countries where online gambling has been banned, and it is speculating that these could lead to the game being blocked in those countries. And indeed there have already been reports of the game being blocked in
several countries, but these reports seem in need of confirmation.
Swiss gamblers will be able to bet online only with an approved monopoly of casinos and lotteries.
The provision of the new Swiss gambling law which restricts online gambling to a few authorised Swiss-based casinos comes into effect on July 1.
Last June 73% of voters approved the overhaul of the country's gambling law despite claims by opponents of government censorship.
A list of unauthorised gambling providers will be published on the websites of the Federal Gaming Commission external link and the Lotteries and Betting Commission external link . Those on the blacklist will be automatically blocked by Swiss ISPs
by means of DNS blocks.
Swiss gamblers signed up with foreign casinos will have to contact them directly for any money due as Swiss regulators have no jurisdiction over them. Or perhaps they will continue to use foreign websites using VPNs or encrypted DNS courtesy of
Age verification for online gambling is set to evolve into full identity verification from 7th May 2019. The other big change is that all verification will have to be completed prior to any bets being placed. Previously age verification was
required only when people tried to withdraw their winnings. There were many complaints that gambling companies would then inflict onerous validation requirements to try and avoid paying out.
I would hazard a guess that the new implementation will quash an awful lot of the TV end media adverts that try and get new members with a small joiners bonus. Now it will be a lot more hassle to join, and maybe there will be less interest in
trying out new websites just to get a free introductory bet.
The Gambling Commission (UKGC) has released a new set of rules, ensuring that operators implement a new wave of identity checks to make gambling safer and fairer.
Following an open consultation, and to further guard against the risk of children gambling, new rules mean operators must verify customer identity and age before they can either deposit funds into an account or gamble with the licensee, with
either their own money or a free bet or bonus.
Furthermore, the UKGC has clamped down on free-to-play games, stressing that customer must now be age verified to access such versions gambling games on licensees' websites, emphasising that there is no legitimate reason why they should be
available to children.
Changes are also designed to aid with the detection of criminal activity, whilst operators are reminded that they cannot demand that ID be submitted as a condition of cashing out, if they could have asked for that information earlier.
Finally, an increase in identifying self-excluded players was stressed, because effective verification by operators will mean that a customer will not be verified, and therefore unable to gamble, until they provide correct details. These details
will then be checked against both the operator's own self-exclusion database and the verified data held by Gamstop.
Set to come into force on Tuesday 7 May, further new rules come as a result of a number of complaints to contact centre staff, regarding licensees not allowing a customer to withdraw funds until they submit certain forms of ID.
The new rules require remote licensees to:
Verify, as a minimum, the name, address and date of birth of a customer before allowing them to gamble
Ask for any additional verification information promptly
Inform customers, before they can deposit funds, of the types of identity documents or other information that might be required, the circumstances in which the information might be required, and how it should be supplied to the licensee
Take reasonable steps to ensure that information on their customers' identities remains accurate.