Loot-boxes and Gambling: The Legalities



Yes and no. No one can agree whether buying digital lootboxes constitutes a form of gambling and should be treated and possibly prosecuted as such.

What is a lootbox?- A lootbox are in-game items that you purchase (with real money) in video games, usually games that involve multiplayer, where it contains x amount of random digital objects, which range from cosmetic skins all the way to in-game abilities, and consequently an edge over those with not as much disposable income. Sometimes these objects are assorted in the order of rarity in which you get one ‘rare’ item guaranteed.

The purchases of lootboxes and other digital items- are collectively referred to as microtransactions- and they add up to quite a fistful of dollars.

The most egregious examples of lootboxes would be the recent game Star Wars: Battlefront 2, where the lootboxes contain items that give you an absurd edge in multiplayer games. Another game that is known to have lootboxes is the popular Overwatch, though the contents of said boxes are only purely cosmetic. Lootboxes could, with some technicality and a pinch of chutzpah, also be applied to online card games like Hearthstone or Gwent, with their booster packs as well their analogue equivalents for (children’s) card games such as Magic, Pokemon and Yu-Gi-Oh.

Whilst in itself, a product, the psychology of the lootbox, and the act of opening one is very similar to the behavioural patterns often associated with pokies and slot machines- the brief, high-pitched sounds and bright sounds that are often played as you open these, induces a certain stimuli in the brain that induces you to keep repeating it, and the ever-advanced innovation to keep the cycle going- or to put it less politely- chase the next high. There are plenty of unboxing videos out there on YT. There are enough stories (salt ought to be taken) of aggrieved parents wondering what happened the next time they checked their bank balances, because their children sneakily ‘borrowed’ their credit card.

Legality (Australian context)- in the context of Australia, Gambling laws vary from state to state. Queensland’s gambling regulator- the Office of Liquor and Gambling Regulations, have stated that loot-boxes don’t constitute as a gaming machine under their Gaming Machine Act 1991 (a hefty 566-page document) Victoria, or rather the Victoria Commission for Gambling and Liquor Regulation (VCGLR), on the other hand, seems to have a different mind- that whilst lootboxes constitute gambling, under the context of adding gambling functionality to non-gambling games- the VCGLR can’t actually prosecute the game developers, since they are a non-Victoria based entity but however the Victorian laws could be enforced if say, the game decided to market a specific lootbox deal towards Victorian-based players.

The Western Australian counterpart, the Department of Racing, Gaming, Liquor, has their equivalent regulation the Gaming and Wager Commission Act 1987/88- in the form of the Gaming. Examining the relevant clause- under Division 5- section 84, which covers on our government’s definition of what constitutes a gaming machine-

a) constructed, adapted for used for playing a game of chance by means of that gaming machine

b) a player pays (except where he has an opportunity to play without payment as the result of having previously played successfully)

      i) by inserting money or money's worth in the form of a token, ii) by in some other way

c) by the chances inherent in the action of the machine, determines the outcome of the game.

Considering this, my hunch is that lootboxes don’t particularly constitute gambling under the eyes of the law, using the QLD’s Gaming Machine Act 1991 and the regulator’s opinion.

But then again, I’m not a lawyer here.


Wordy legal-ese are aside, I do find the timing of the debate about lootboxes a little late and much of the language is couched in moralistic terms (which brings back memories of the early 2000s about violent movies and games). Lootboxes and pay to win have been quietly operating in the background for quite some time but are now in the spotlight.

That said lootboxes, and the way its pushed out, is in itself predatory. But in the end it comes down to players making the decision whether they want to buy or not buy. That’s where the law stands as far as it goes- the law doesn’t quite cover whether that the buyer in question is vulnerable to this subtle psychological manipulation- such as children and young adults (and you could say the same about the lonely and elderly when it comes down to slot machines and roulette).

To be able to stamp out lootboxes as part of the gaming experience would require new legislation, as the state of Hawaii in the United States, worded precisely against the sale of lootboxes to minors, as well prohibiting the mechanisms that encourage gambling. Further abroad- re-interpretations of the law could apply, as per the case in Belgium, where if you are paying real money with no clear idea of what you are getting, it could therefore be ruled as… gambling.

Say hypothetically lootboxes are in the gunsights, what about the analogue counterparts- you’d have to target them as well, as laws, by nature indiscriminatory and context-free. To use a familiar example- Magic: The Gathering has a format called Draft, and a format called Sealed, which are reliant on blind boosters to create gameplay. The gavel comes down and you’ve just wiped out two of the ways people can enjoy Magic.

The key takeaway point is that laws can never quite (and never will) match the speed in which technology evolves, as well as the social adaptation to the technological evolution; along with the fact that humans sometimes enjoy rolling dice or punting on horses; and that services that cater to this need are going to keep expanding, innovating and skirt the boundaries of any legislation.

In the end it’s all about self-control and being conscious and alert on how you spend that money, and keeping the impulse in check. Or a lesson for the young, with some reflection, to learn the value of saving money and delayed gratification after having wasted it on digital items.


*this read is not intended as a detailed and exhaustive analysis on the topic. For that it is worth checking on other sources on the mysterious thing that is called the internet.

Clayton Lin