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Tuesday, 6 April 2021

New University Study Links Video Game Loot Boxes To Problem Gambling

Video Game Loot Boxes

A new study from the universities of Wolverhampton and Plymouth have found a link between problem gambling and video game loot boxes.

Commissioned by gambling charity GambleAware, researchers from the two universities reviewed existing studies to assess the links between loot boxes in video games and gambling behaviour. The researchers reportedly found a “clear” link between them, claiming that loot boxes are “structurally and psychologically akin to gambling”.

Researchers found that 12 out of the 13 studies they analysed found “unambiguous” connections between loot boxes and problem gambling, and they found that many video games with loot boxes often use “psychological nudges” to encourage players to purchase loot boxes. These include using the fear of missing out (FOMO), offering free loot boxes and then charging for subsequent boxes, the obfuscation of costs, and more.

What’s more, the universities’ study also found that of the 93% of children in the UK who play video games, around 40% have opened loot boxes. The researchers also found that 5% of loot box purchasers spend around £70 per month, generating more than half of the industry revenue from loot boxes. According to the report, one-third of these purchases fall into the problem gambler category.

Of the study’s brief screening of 14,000 UK gamers, the researchers found that young males with lower education are more likely to engage with loot boxes. The researchers also found that the digital assets in loot boxes sometimes have a real-world or psychological value, suggesting that they could be regulated under current gambling legislation by the Gambling Commission.

With the study’s findings in mind, the report’s researchers made several suggestions on policies that could be implemented to prevent gambling harm associated with loot boxes. The study’s suggestions include clearer definitions of loot boxes, game labelling and enforceable age ratings, the full disclosure of odds presented in an easily understood manner, spending limits, and showing the price of loot boxes in real currency rather than with in-game currency.

Dr James Close, the Senior Research Fellow at the University of Plymouth, said in a statement: “Our work has established that engagement with loot boxes is associated with problem gambling behaviours, with players encouraged to purchase through psychological techniques such as ‘fear of missing out’. We have also demonstrated that at-risk individuals, such as problem gamblers, gamers, and young people, make disproportionate contributions to loot box revenues. We have made a number of policy suggestions to better manage these risks to vulnerable people, although broader consumer protections may also be required.”

Zoe Osmond, the CEO of GambleAware, added: “This research is part of GambleAware’s continued commitment to protect children, adolescents and young people from gambling harms. The research has revealed that a high number of children who play video games also purchase loot boxes and we are increasingly concerned that gambling is now part of everyday life for children and young people.

“GambleAware funded this research to highlight concerns around loot boxes and problem gambling, ahead of the upcoming Gambling Act review. It is now for politicians to review this research, as well as the evidence of other organisations, and decide what legislative and regulatory changes are needed to address these concerns.”

The report’s release comes as the UK Government is carrying out its review of the Gambling Act 2005, a review which could lead to several changes within the gambling industry. The minimum age for the National Lottery is set to increase later this year and it’s thought that the review could lead to a ban on gambling sports sponsorships.

UKGC Outlines New Three-Year Strategy

Also this week, the UK Gambling Commission has published its 2021/22 Business Plan and has outlined its new three-year strategy that it will focus on in the coming years as part of its goal to “make gambling fairer and safer”.

According to the UK Gambling Commission website, the new strategy will focus on five key areas; protecting children and vulnerable people from being harmed by gambling, a fairer market with more informed customers, keeping crime out of gambling, optimising returns to good causes from the National Lottery, and improving gambling regulation.

To follow the five key areas noted above, the Commission is looking at improving conduct and competence, continuing to evolve its License Conditions and Codes of Practice, build a stronger evidence base, and focus more on preventative and regulatory action. It is also looking to making license holders’ complaints procedures easier to access and understand.

What’s more, the Commission, which fined operator In Touch Games last month, has vowed to work with the Department of Digital, Culture, Media and Sport (DCMS) to ensure it has the resources to regulate the industry effectively, to ensure that employees are continually developed, and that technology is harnessed to improve the UKGC’s systems and processes.

In a statement, Gambling Commission Chair Bill Moyes said: “Our new three-year strategy maintains the ambition of our previous strategy and goes further in considering how best we can use our current resources. We launch the new Strategy and our Business Plan, which details our milestones during what is going to be a hugely important year for compliance and consumer protection as the country starts to move out of lockdown after a challenging 12 months.

“Covid-19 has meant a shift in gambling habits and is exactly why the new strategy focuses on protecting consumers from harm, holding operators to account, creating a fairer market for all, and protecting the National Lottery. Additionally, the launch of the Gambling Act review was a pivotal moment earlier this year and whilst our work continues, we are aware that we must continue to adjust and challenge ourselves depending on the outcomes of the Review.”

He added: “Over the next three years, we will see the gambling industry change further, especially as the pace of innovation accelerates. As the regulator, we must keep pace with that change, be ready to adapt, and ensure that the millions of people who gamble in Great Britain can do so safely.”

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