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In The Gamble Network, Jolyon Jenkins investigates a controversial gaming phenomenon – the loot box.

Loot boxes are a feature of video games in which you can pay to open random packs or crates of virtual items, hoping to uncover something rare and desirable. The items won can be cosmetic player upgrades known as "skins", new weapons or sometimes even dance moves. Each box is a lucky dip – the player doesn’t know if they are going to get something valuable or worthless. Essentially, it’s a gamble.

Sometimes, the virtual items can be traded for cash, either on the manufacturer’s own platform or through third party sites. (For example, FIFA’s own currency, FIFA coins, are meant to be earned playing the game. In fact, you can buy and sell them from unofficial sites.) In some cases, children have lost large sums of money.

But there is also evidence that, even where the virtual items can’t be “cashed out”, the experience of buying loot boxes has led to addictive behaviour and problem gambling.

Are loot boxes feeding gambling habits?

The experience of buying loot boxes has led to addictive behaviour and problem gambling.

Many argue that the loot box phenomenon is getting kids hooked on the rush of gambling.

Wesley Yin-Poole, deputy editor of Eurogamer Magazine, explains how “opening loot boxes is a thrill.” If you lose, or if you win, you want to go back and have another go. “I am getting very similar sensations from opening loot boxes to winning in gambling,” he says. “When I get something that is really coveted, is really rare, that I know will make me look brilliant in the game or give me an advantage, I get the same rush as I would as if I won on the horses.”

Dr David Zendle, a lecturer at York St John University and an expert in loot boxes, believes problem gambling may be caused by exposure to these prize crates: “You get used to the excitement and the arousal of buying loot boxes, and then you go out and see a slot machine and you are needing that same excitement, so you use the slot machine and eventually problem gambling develops.”

It doesn’t help that young people, many of whom are already familiar with the thrill of opening loot boxes through gaming, are being directly targeted by online gambling companies that are using the prize crate model.

There is a proliferation of illegal sites facilitating gambling with skins and cryptocurrency, as well as the chance to buy loot boxes containing virtual or even physical prizes – like electronic goods and expensive trainers. Many are paying prominent YouTubers to stream videos of themselves opening these crates and winning big, though the odds of success are in reality negligible. These social media stars frequently do not advertise the fact they are being sponsored by the gambling companies. In the case of Tom Cassell and CSGO Lotto, the millionaire YouTuber broadcasting his “wins” was actually a co-owner of the gambling site. Something he never told his UK fans.

Notably, many of the YouTube fans subscribing to these videos are pre-teen and most of the gambling sites being promoted have no age verification process.

A study has shown that 55,000 children in the UK are problem gamblers and it seems loot boxes are contributing to the crisis. Yet the UK Gambling Commission doesn’t consider loot boxes to be covered by gambling law. The Gambling Act tells us that gambling means playing the game of chance for a prize, with a prize defined as being money or money’s worth. They argue that because these virtual items have no monetary value, they don’t fit the technical definition of gambling.

However, we know that FIFA coins, for example, can be turned back into real money on secondary websites. Plus, although many of these virtual items have no monetary value, they are extremely valuable to the people that buy them.

“Whether or not it fits these legal definitions of gambling that were set up many years ago is frankly, to some extent, neither here nor there,” says David Zendle. The question we should be asking is, is it harmful? If it is then something needs to be done.

Are things starting to change?

Think about setting up passwords and credit limits on consoles, to prevent children overspending.

Some gambling regulators are beginning to see the issue differently. The Belgian government have declared that loot boxes in games are a form of gambling and are therefore covered by its gambling law. Electronic Arts – who make FIFA – have now stopped selling loot boxes in Belgium.

How can we stop children from falling victim?

Until the regulators in the UK catch up, and clamp down on the practice of loot boxes, there are practical steps a parent or guardian can take to protect a young person. In some instances, it’s possible to arrange gift cards as a safer way to grant a child credit in a game. Or set up passwords and credit limits on consoles, to prevent overspending.

Increased awareness and understanding may also help to dampen the lure of loot boxes. It may help to promote the stats that many games manufacturers neglect to – that the odds of winning may be less than 1%. We can also reiterate that it is better to walk away out of pocket than to keep on spending.