The UK Gambling Commission is Clueless About Video Games

By Rich Stanton on at

The UK Gambling Commission's yearly survey of young people and their perspectives on gambling has been published and, as was leaked to the BBC, this year it is taking on the thorny issue of video games for the first time. The report is not concerned with loot boxes, but on another boogeyman: skin-betting. The full report is available here and, after reading it, I'm concerned that the UK has a regulator dealing with video games that isn't fit for the job.

I don't blame the Gambling Commission. Video games is a medium that attracts knee-jerk reactions from all sides, including its most passionate defenders, and the loot boxes farrago inspired by Star Wars: Battlefront II is a current example. I'm no great fan of Battlefront, and I think the microtransactions ruin it, but I also feel it has been described in hyperbolic and inaccurate terms. The most outrageous example was Hawaii's state representative Chris Lee, who described Battlefront II as a "Star Wars-themed online casino designed to lure kids into spending money."

Following Lee, fellow Hawaii state representative Sean Quinlan stands up and, after a decent comparison to mobile games, argues that what we are seeing with Battlefront II is equivalent to the mascot Joe Camel, used to advertise cigarettes to children. He also says the game is "marketed squarely at children" (in America, the ESRB rated the game T for Teen).

Battlefront II is not, by any stretch of the imagination, an online casino. I am equally sure that no part of it is about 'luring kids'. The cigarettes comparison is laughable. But then, I've actually played the game. The senators seem to be getting their information second-hand, I'm certainly curious about their sources, and if I was an EA lawyer watching this display I'd be laughing my head off. How can you regulate an industry when you don't even know what it is?

The problem is that the people in positions of power often (in 2017!) still don't play video games. They have an odd, old idea of what they are, and take what they've been told on faith. This can combine, badly, with the worst excesses of moral panic online – where players are quick to describe something they don't like, such as Battlefront II's loot boxes, as 'gambling'.

Let me give you an example that's closer to home. In recent months the Labour MP Daniel Zeichner has tabled three parliamentary questions which explicitly conflate "illegal gambling, in-game gambling, and loot boxes within computer games". Obviously one would presume Mr Zeichner is informed, but it turns out that he was 'helped' to prepare his questions by a redditor, Artfunkel, who told reddit that "the goal here is to see the UK's existing gambling regulations applied to loot boxes".

So a British MP is asking parliament to consider a change in the law because one of his constituents, who has strong feelings about loot boxes, has basically coached the question. Obviously Mr Artfunkel is entitled to his opinion and good luck to him, but it looks to me like Mr Zeichner hasn't questioned what he's been told, doesn't know anything first-hand, and is just parroting talking points of the 'no loot boxes' fringe.

Loot boxes are not currently defined as gambling in the UK, except on the Isle of Man for some reason (Zeichner asked another question about this). But the UK Gambling Act 2005 includes clear provisions about games of chance, under which category loot boxes could be considered gambling:

6 (1) In this Act “gaming” means playing a game of chance for a prize.

[...]

(4) For the purposes of this Act a person plays a game of chance for a prize—

(a) if he plays a game of chance and thereby acquires a chance of winning a prize, and

(b) whether or not he risks losing anything at the game.

(5) In this Act “prize” in relation to gaming (except in the context of a gaming machine)—

(a) means money or money's worth, and

(b) includes both a prize provided by a person organising gaming and winnings of money staked.

The difficulty is that this law was written in 2005 and, as this shows, you often have to kind of twist it to fit exactly what video games have become – and often it does not. It has however been used successfully to prosecute youtuber Craig Douglas and his partner Dylan Rigby, who targeted children with their FIFA gambling scheme, which is nevertheless a situation much less nuanced than anything to do with in-game purchases.

That's the conflation again. A lot of stuff is being lumped together here, and some of that makes sense but much doesn't – and I'm not sure if the Gambling Commission is capable of drawing the distinctions required. It seems especially interested in the practice of skin betting, and understandably so, but to the exclusion of almost anything else. There have been big skin betting scandals, there are a lot of dodgy skin betting sites, and it absolutely should be an area of focus. But it's not the whole story by a long, long shot.

We need to distinguish between games like CS: GO, where thirdparty websites can use bots to 'securely' trade weapons back-and-forth to line up with a gambling hub, and games like Battlefront II – which, for all its sins, just wants to sell you a loot box with some game cards in it. There's an enormous difference there, but how many times have you seen them conflated?

If Battlefront II's loot crates are a problem, then presumably we can also say goodbye to Hearthstone card packs, every F2P mobile game under the sun, and a list of games as long as your arm. It seems to me that this is both an extreme position and quite unlikely to happen. A much more fruitful angle of approach would be to look at regulating the type of microtransaction, how it's incorporated into the game, the odds involved, and what players are guaranteed for their money.

But then, I play video games.

I'd further argue that attempting to define loot boxes as gambling is unhelpful to anyone who wants to see an improvement in the video games industry. The video game and gambling industries are distinct, and obviously the former currently faces the problem of importing exploitative techniques from the latter. When talking about exploitation in games, my focus in the past has been much more on children and coercive F2P techniques – Selling Candy to Babies – and I would further note, in the context of conflation, that the Battlefront II argument boils down to angry adults saying 'what about the children?' It's an attempt to make the 'loot boxes = gambling' argument morally unassailable, and that kind of annoys me because there are genuine problems in childrens' games which are ignored, and they're nothing to do with Battlefront II.

Coming back to the Gambling Commission, this is its first attempt at getting a handle on the scale of the video game industry and exactly what problems it faces. Gaming doesn't even get its own section, but scroll to the end of section 5 to see this:

That penultimate paragraph is a shocker. The Gambling Commission covers itself with the excuse that this was about respondents' "comprehension of the activity" and fair enough, but it also conflates a problem area (skin betting) with the whole sector and other distinct aspects of it. Tonnes of games contain loot systems, for example, that would come under this definition – but have no IAPs. And the 'cash conversion' aspect means that many problematic games wiggle free.

Thing is, the results are kind of terrifying even with a pinch of salt:

Overall, based on the description provided within the questionnaire, 45% of 11-16 year olds were aware that it is possible to bet with in-game items when playing computer games or app-based games. Almost six in ten boys (59%) knew about this activity compared to less than a third of girls (31%).

The survey found that 11% of 11-16 year olds claimed to have personally ever bet [sic] with in-game items. The activity was more prevalent among boys (20%) than girls (3%). Older respondents were more likely to have bet with in-game items: only 3% of 11 year olds had done so compared to 14% of 14-16 year olds. The incidence of betting with in-game items was higher than average among young people who had spent their own money on gambling in the past week (24%) and those who had played online gambling-style games (30%).

Of the 11% of 11-16 year olds who had ever bet with in-game items, more than a third (36%) had done so in the past seven days, 23% within the past month, and 41% more than one month ago.

The problem is that the bad guys are a million miles ahead of this plodding survey, and I do not consider it acceptable that the head of the Gambling Commission, when Eurogamer asked about self-regulation, replies: "In truth, we are not computer games [experts], to say how well they can be trusted or not."

How far ahead the industry is in this regard, and how the regulators lag behind. The whole loot boxes thing is, in my opinion, a distraction from much more insidious elements of modern gaming that do not involve what we would traditionally define as gambling. In an effort to make regulators aware of the problem, perhaps, we're framing it in terms that another generation can easily understand.

I don't blame the Gambling Commission for any of this: it already regulates an enormous and much more ethically dubious industry in gambling, and it feels almost like gaming has landed in its lap. With that in mind, perhaps the UK should look back to the future. The Gambling Act 2005 abolished the Gaming Commission and folded its duties into the Gambling Commission (Section 21). As the head of the Gambling Commission freely admits, they're not experts, and that's why it is barking up all the wrong trees – while MPs are misled by well-meaning timewasters.

To be clear, I am not a lawyer. But if the UK government tried to define loot boxes as gambling, it would face an industry challenge. And because the terms are clear and there's no way you can win money back, or a prize that can be exchanged for money, the chances are it would lose – to such an extent that any sensible legislator, outside of Cambridge perhaps, would never take the fight.

This is not the fight we should be looking for.

No-one likes overbearing microtransactions, constant loot boxes, or the subtle encroachment of aspects of the gambling industry into our beautiful hobby. These things absolutely should be fought against. But the way to do it is with accuracy and precision, not by conflating fundamentally different things. Call loot boxes 'gambling' all you want, but they're just a symptom of our industry's real problems. Players should start thinking about how the video games industry manipulates behaviour and encourages purchases in a wider sense, and yes part of that is loot boxes, and perhaps down the road the government can get something useful done. Look at how Japan regulated its gacha problem, and how South Korea innovates with legislation focusing on minors.

Every single year matters. Every survey that engages with the topic from a position of ignorance, or every MP that asks a surface-level question without understanding the issues, moves us further away from effective regulation of gaming's darker elements – not closer. As long as video games remain the preserve of the Gambling Commission, I'm not holding my breath. The UK's children and the game-playing public deserve a much better and more informed regulator than this.