The National Council on Problem Gambling (NCPG), the leading national organization for people and their families who are affected by problem gambling and gambling addiction, participated in a workshop about loot boxes held by the Federal Trade Commission on August 7, 2019.
The FTC workshop, entitled Inside the Game: Unlocking the consumer issues surrounding loot boxes, featured three panels. NCPG Executive Director Keith Whyte testified on Panel 3: A Level Playing Field – What’s Fair Game? along with Common Sense Media, Consumer Reports, and Entertainment Software Rating Board, moderated by staff members from the FTC Division of Advertising Practices.
“The FTC workshop on loot boxes brought together a diverse array of stakeholders in order to better understand the intersectional ecosystem of this technology,” said Keith Whyte, Executive Director of NCPG. “Whether or not loot boxes meet criteria for gambling, consumer protection measures clearly need to be put in place. Research shows that loot boxes resemble gambling and can quickly become pathways of problem gambling.”
In his address, Whyte discussed the similarities between loot boxes and slot machines. Research demonstrates that the structural characteristics and features of loot boxes, and how they are deployed in game play, are strongly associated with gambling addiction. Similarities between loot boxes and slot machines include random distribution of prizes, variable but unknown value of the prizes, near-miss features, visual and sound cues associated with participation and reward, and a purchase flow that maintains tempo of play. Additionally, research has shown that children, young men, and active-duty military and veterans are particularly risk-tolerant or risk-taking, and thus more likely to experience negative consequences from loot boxes.
At the workshop, Whyte offered multiple solutions to combat the potentially adverse impacts of loot boxes using a multi-layered approach involving players, parents and communities, as well as game developers. Whyte continued: “NCPG suggests the four following solutions to address loot box gambling addiction: 1. Better inform consumers about the costs and risks; 2. Prevent gambling-related problems; 3. Facilitate treatment-seeking and support recovery; and, 4. Increase the base of evidence. These approaches will foster greater transparency, accountability, and understanding about the connection between loot boxes and problem gambling in order to protect the consumer.”
Strong regulation is important, but it cannot be effective at reducing harm unless accompanied by equally robust prevention, education, treatment, recovery and research services. A portion of gaming company loot box revenue must be set aside in a public health trust fund or other independent vehicle for such programs. If such measures are not adopted by the video game industry we suggest regulation by FTC is required. In addition, we call on state, tribal and local gambling regulators to review loot boxes and determine if they meet the criteria for gambling and thus should be subject to regulation in their particular jurisdiction.
Learn more about the FTC loot box workshop and the NCPG perspective on loot boxes.