Australian gambling analyst says loot boxes 'constitute gambling' by legal definition (Updated)

Update: While the VCGLR has not yet ruled on whether loot boxes constitute "unauthorized gambling" as defined by Victorian law, it confirmed that it is "aware of the issue of 'loot boxes'" and in the process of assessing their legal status and the potential dangers they pose.

"This is a complex issue and the VCGLR is committed to working with other agencies and jurisdictions to address the risks involved," a spokesperson said in an email. "The VCGLR has not made a determination that 'loot boxes' are an unauthorized form of gambling under Victorian legislation."

Original story:

The backlash against loot boxes has now reached all the way to Australia: Responding to an inquiry from a redditor named -Caesar, a strategic analyst for the Compliance Division of the Victorian Commission for Gambling and Liquor Regulation said that "what occurs with 'loot boxes' does constitute gambling by the definition of the Victorian Legislation." 

"We are currently engaging with interstate and international counterparts to progress wider policy changes and to modernize and inform both Federal and State-based legislation," the analyst, Jarrod Wolfe, wrote. "We take on board responses from the community, such as your concerns, to ensure that our actions are reflective of the risks these products pose as well as the community’s expectation. Watching recent Reddit activity certainly indicates the majority of the gaming community is at odds with decisions made by certain companies." 

Wolfe said his focus is on "the more predatory aspects related to 'pay to win'" games, while things like skins and virtual currencies are somewhat more secondary. But he made no bones about where he stands on the matter: "The normalization of gambling vernacular and mechanics targeted at vulnerable persons (minors) is not just morally reprehensible, but is also legally questionable." 

He also emphasized the inherent difficulties in regulating loot boxes in games, and acknowledged that "enforcement is probably not an option." He believes that the most effective path to change is through cooperation with other agencies that can bring different kinds of pressure to bear on publishers.   

"For instance; if these companies want to include significant elements of gambling in their products then perhaps we should work with the Australian Classification Board to ensure than any product that does that and monetizes it gets an immediate R rating," he wrote. "I could imagine that this would send ripples through the industry and it would support the objectives of the Gambling Legislation to ensure minors are not encouraged to participate in gambling." 

The response isn't an official position adopted by the government of Australia or Victoria, but the lack of ambiguity clearly illustrates which way the wind is blowing. All that's up for discussion is what to actually do about it. Every nation has its own laws, and Australia certainly hasn't been reluctant about going its own way in the past, but with similar noises coming out of Europe and North America, it certainly looks like trouble could be brewing. 

Wolfe also leveled an unmistakable and rather sinister-sounding warning to anyone in the business hoping that this will all blow over: "It is perhaps unfortunate for these companies that gamers have infiltrated most areas of government; be assured that knowledgeable and interested parties are undertaking a large body of work in relation to issues you noted. And if an avenue of investigation or enforcement is found, then we will most definitely pursue it."

I've reached out to the VCGLR and Electronic Arts for more information, and I'll update if I receive a reply. 

Thanks, Kotaku

Andy Chalk

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.