House of Lords calls for loot boxes to be immediately reclassified as gambling

The House of Lords has urged the UK government to immediately "bring loot boxes within the remit of gambling legislation and regulation."

A new report by the House's Select Committee on the Social and Economic Impact of the Gambling Industry makes 66 recommendations as to how the government can better protect consumers from gambling-related harm.

Loot boxes are among the seven highlighted as key recommendations that should be acted upon immediately.

"The liberalisation of gambling by the Gambling Act 2005, the universal adoption of smartphones, and the exploitation of soft-touch regulation by gambling operators has created a perfect storm of addictive 24/7 gambling," the committee wrote.

"The committee expects the government and the regulator to make changes now. Many of the report's recommendations do not need legislation, and all of them are urgent if consumers are to be protected and lives saved."

A committee for the Department of Digital, Culture, Media and Sport conducted an extensive enquiry into addictive and immersive technologies last year, and concluded that paid loot boxes should be regulated under the UK's gambling laws.

Nine months later, the government's response has been to propose a call for evidence that loot boxes constitute gambling, which will be considered around a wider review of the Gambling Act.

The House of Lords committee's report includes a chapter dedicated to loot boxes, in which it stated: "While we welcome the government's intention to consider the relationship between gambling and video gaming, we believe that this issue requires more urgent attention.

"We agree that it is vital that any legislative changes are based on evidence; the evidence we have heard has stressed the urgency of taking action, and has not drawn attention to any unintended consequences."

Addressing the upcoming call for evidence, the committee pointed to academic research which already "proves that there is a connection, though not necessarily a casual link, between loot box spending and problem gambling."

The committee added: "We echo the conclusions of the Children's Commissioner's report, that if a product looks like gambling and feels like gambling, it should be regulated as gambling."

Last year, the Children's Commissioner not only recommended regulation over loot boxes, but also a ban on sales on any non-cosmetic in-game items.

Back in January, the NHS' mental health director also called for a ban on loot boxes.

This section of the committee's report concludes: "We recommend that Ministers should make regulations under section 6(6) of the Gambling Act 2005 specifying that loot boxes and any other similar games are games of chance, without waiting for the government's wider review of the Gambling Act."

UK trade body UKIE has released a statement, emphasising that the UK games industry "has been working hard to address the concerns raised" by the report. This includes the launch of its own Get Smart About PLAY campaign earlier this year, which aims to raise awareness of the family controls available to limit or stop spending in-games.

It also points to the commitment made by Nintendo, Sony and Microsoft to ensure loot box drop rates are publicly disclosed, and the new 'paid random item' descriptor added to PEGI's age rating system.

“The majority of people in the UK play video games in one form or another, so we take these concerns seriously,” said UKIE CEO Dr Jo Twist. "We've worked hard to increase the use of family controls on consoles which can turn off or limit spending and we will be working closely with the DCMS during its review of the Gambling Act later this year."