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21Gambling results in either a win or a loss, but loot-boxes always provide some sort of reward, even if it is not the reward the user hoped to receive. 20 There are two problems with trying to regulate loot box mechanisms into the pre-existing framework for gambling: users are guaranteed to receive at least 1 item and all items offered have no tangible value. The problem with regulating loot boxes strictly stems from the fact that it is hard to fit within the traditional common law understanding of gambling, 19 and there is a concern for inviting overregulation of videogames. In China, for example, legislation has been passed requiring the mandatory disclosure of loot box odds.
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17 International responses have been similar.
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16 In Washington the state legislature introduced a bill directing the Washington Gaming Commission to investigate the matter. 15 2 of the bills attempt to ban the sale of these games to customers under the age of 21 while the other 2 seek to establish labeling and disclosure requirements for these games. 13 These responses have been effectuated through varying methods such as attempts to regulate directly through legislation or referrals to domestic gaming commissions 14 For example, in the U.S., the Hawaii legislature introduced four bills to address the proper sale and labeling requirements of games involving loot box mechanisms. Proposed government responses have focused on two avenues for regulation: banning the sale of games with loot boxes to minors and increasing transparency through labeling and disclosure of odds within games with loot-box mechanics. Only a few countries have attempted to regulate in this sphere. There is currently a legal vacuum in the context of regulating loot boxes 12. 10 It is argued by some that all of these elements are met by loot boxes and therefore loot boxes should be regulated as gambling 11 If any one of the three elements is not present then the activity is not considered gambling. 9 For an activity to be regulated as gambling there must be 3 elements present: chance, consideration and prize. 8 The main aspect of gambling is buying a chance in order to win a prize. 7 For example, in both the gambling and loot box contexts, low win probabilities for highly desirable rewards encourage players to purchase an indeterminate number of loot boxes to obtain these rewards. Their concern is that loot boxes and gambling share many of the same addictive features. Some scholars have likened the purchase of loot boxes in video games to gambling. 5 The allure of using loot box mechanisms stems from the fact that they seem to generate a large amount of revenue from a small user base that has described themselves as addicted to loot boxes, spending thousands of dollars on them hoping to acquire rare items. In its first month, the game brought in $92 million. 4 One of EA’s popular Battle Royale games, Apex Legends is a free-to-play game that makes money off of in-game microtransactions that include loot boxes. 3 Electronic Art’s developer of several games that contain loot box mechanisms, made $2.6 billion in live services (including loot boxes) in 2018. 2 It is projected that loot boxes will bring in 50 billion dollars in 2022. 1 In 2017 loot boxes brought in a record 30 billion dollars worldwide. These “boxes” contain random items which can range from cosmetic items that alter the appearance of characters in the game, to new weapons and tools or even access to new characters. Loot boxes are virtual items users can purchase within video games for real money. There has been debate among legal scholars as to whether loot boxes can be considered a form of gambling and whether they should or how they should be regulated.