Topic: ESRB Says "Loot Boxes" Aren't Gambling

[nickmitch]

Soure: Kotaku

[size=78%]“ESRB does not consider loot boxes to be gambling,” said an ESRB spokesperson in an e-mail to Kotaku. “While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want). We think of it as a similar principle to collectible card games: Sometimes you’ll open a pack and get a brand new holographic card you’ve had your eye on for a while. But other times you’ll end up with a pack of cards you already have.”[/size]

They go on to define gambling, and note the impact the labeling would have:

According to the ESRB’s criteria, “Real Gambling” is any sort of wagering involving real cash, while “Simulated Gambling” means that the “player can gamble without betting or wagering real cash or currency.” The spokesperson added that any game with real gambling will always receive an “Adults Only” rating, which would be poisonous for big publishers, as most big-box retailers will not sell A-O games in their stores.

Some players want this on the boxes, possibly as a way to deter the practice of randomized loot boxes in games, and aren't happy with the ESRB decision.

[Ian Sane]

I would assume that it would be up to the government to determine if something is actually gambling or not.  There are laws about gambling as minors are not allowed to do it.  So if the government determined that a videogame had legitimate gambling then it could ban sales of that game from minors.  If this is truly gambling the ESRB's opinion is largely irrelevant because there would be actual laws that would need to be enforced.

But I figure the government would treat it the same way as similar to collectable card games.

[nickmitch]

I think that's where ESRB's argument comes from.  They're most likely getting their definition from how a governing agency would view gambling, knowing that's heavily regulated.

Personally, I agree with their decision and like the trading card analogy.  Is it kind of a shitty practice in game design today? Sure.  But it's on the players not to by those games or support the practice.

[UncleBob]

So, according to the ESRB, if I make an app where everyone buys a $2 ticket, but everyone gets $1 in return, with one lucky person getting $1,000 - this isn't gambling...

[lolmonade]

So, according to the ESRB, if I make an app where everyone buys a $2 ticket, but everyone gets $1 in return, with one lucky person getting $1,000 - this isn't gambling...

No, because even if "losers" are getting a portion of their buy-in back, it's still a "wager".  Based on that, your scenario would fall under a "gambling" definition as they wrote it.

[lolmonade]

ESRB is probably correct in that lootboxes wouldn't fall under "gambling" by current definition.  That said, I still find them predatory in a way that costume packs, season passes, or other straightforward DLC aren't.


I personally have enough discipline not to buy-into them, but I think they're inherently alluring to younger kids, and they likely target the same groups of people who are prone to gambling addiction.


I also think there's something inherently more predatory when it's lootboxes for digital content rather than blind packs for things like toys, collectible card games, etc.  As a kid, it wouldn't be that common i'd buy a new couple of MtG booster packs because I had to ride my bike to the store once I had the money saved up, and I had something physically to show for it. 


This might be old man yells at cloud material, I might just not have the right perspective for it.  I just see my 5 year old son and realize the kind of business practices he's going to be dealing with, assuming he shows interest in games.

[Khushrenada]

I've never heard of loot boxes before and I miss living in a world where they don't exist. You've ruined my blissful ignorance, nickmitch!

[Shaymin]

I see where the ESRB (and PEGI, and the German board) are coming from, and as someone who's way down the Fire Emblem Heroes rabbit hole it'd be kind of hypocritical for me to complain too hard about random chance in games. Except I don't have to pay a cover charge to go to casinos.

[UncleBob]

So, according to the ESRB, if I make an app where everyone buys a $2 ticket, but everyone gets $1 in return, with one lucky person getting $1,000 - this isn't gambling...

No, because even if "losers" are getting a portion of their buy-in back, it's still a "wager".  Based on that, your scenario would fall under a "gambling" definition as they wrote it.

Well, I haven't read the source article (because Kotaku), but let's change it.

To participate weekly, you must purchase in-app widgets.  Each in-app widget costs $1.  In-app widgets have no real-world value and cannot be exchanged for currency or refunded.

To participate in the weekly drawing, you must obtain an in-game ticket.  An in-game ticket costs two in-app widgets.

Everyone who participates is rewarded with one in-app widget.  One person is awarded $1,000 cash.

Since losers aren't getting their buy-in back, I'm golden.

[ThePerm]

It wouldn't be gambling because in this event there is still something gained after payment. Otherwise they would have to ban gumball machines or capsule toy machines.

I can't carry my Shenmue 2 file to Shenmue 3.Sigh..

[UncleBob]

I mean, the losers in my first idea are getting *something* after payment as well.  $1.

Hell, if I go to a Poker tournament, I might get a gift bag or a shirt or something.  Even buying a lottery ticket, you get *something* (a scratched off lottery ticket).

I'm just not sure I agree with "a guarantee of getting something means it's not gambling".   (But, likewise, I don't know if I really consider poker full-on gambling, as there's a lot of skill involved).

[lolmonade]

So, according to the ESRB, if I make an app where everyone buys a $2 ticket, but everyone gets $1 in return, with one lucky person getting $1,000 - this isn't gambling...

No, because even if "losers" are getting a portion of their buy-in back, it's still a "wager".  Based on that, your scenario would fall under a "gambling" definition as they wrote it.

Well, I haven't read the source article (because Kotaku), but let's change it.

To participate weekly, you must purchase in-app widgets.  Each in-app widget costs $1.  In-app widgets have no real-world value and cannot be exchanged for currency or refunded.

To participate in the weekly drawing, you must obtain an in-game ticket.  An in-game ticket costs two in-app widgets.

Everyone who participates is rewarded with one in-app widget.  One person is awarded $1,000 cash.

Since losers aren't getting their buy-in back, I'm golden.

So, a real world example comparison I can think of is online blackjack/poker, which was banned several years ago.  Several sites would have you pay, say, $25.  But that would translate to $100 worth of virtual chips for a tournament.  Those virtual chips are then used as the wagering tool, with only the top few people earning a pot.


If we're honest with ourselves though, while we're arguing your hypothetical, we both know the Government can modify and legislate what they decide to define as gambling.

[oohhboy]

What you are describing UncleBob is actual gambling. No one would be fooled by you getting back a dollar to by past gambling laws as it is no more than a thinly cover for the fact your ticket only cost a dollar. It would be gambling also if you convert it to funny money to get funny money back to cash out, no different from getting chips at the casino but with a weird exchange rate.

It isn't gambling if you are buying a blind bag of candy or CCG. The ultimate goal is not to hit the jackpot for a rare card to sell but for personal use that isn't money related, not that you couldn't sell it. It's not a wager as you're not putting cash in to get cash out. You are buying something that you don't know what is inside.

[lolmonade]

What you are describing UncleBob is actual gambling. No one would be fooled by you getting back a dollar to by past gambling laws as it is no more than a thinly cover for the fact your ticket only cost a dollar. It would be gambling also if you convert it to funny money to get funny money back to cash out, no different from getting chips at the casino but with a weird exchange rate.

It isn't gambling if you are buying a blind bag of candy or CCG. The ultimate goal is not to hit the jackpot for a rare card to sell but for personal use that isn't money related, not that you couldn't sell it. It's not a wager as you're not putting cash in to get cash out. You are buying something that you don't know what is inside.

Yeah, you touched on all the points I was attempting to make. 




I get why anti-lootbox advocates are trying to use gambling as the angle to get companies to self-regulate, but that seems to be a road that'll either lead to a dead end, or to government regulation that'd have a little too far overreach or unintended consequences.


That said...it WAS the thread of government intervention that forced the industry to self-regulate on ESRB ratings, maybe that's what the industry needs in order to self-police predatory practices like this.

[nickmitch]

UB, I think the point you're missing is that for loot boxes you're paying money for a set of digital doodads.  The digital doodads all have some value, even if it's not the specific doodad you wanted, you still walk away with some kind of doodad.

The scenarios you're describing are just regular gambling with extra steps, like oohhboy explained.  The exchange in each of your scenarios is "money" for "money" and a chance at more "money".  The gambling part is the chance at more "money".  The fact that you spend real-life currency and get a chance at real-life currency makes it real gambling.

[Ian Sane]

I don't know if this is a thing in other countries but in Canada contests require the winner to answer a skill testing question.  It's usually a math problem that requires a little bit of knowledge of order of operations so like (1+3) x 7.  The idea is that if the winner has to demonstrate some sort of skill to win that the contest is not considered gambling.  You see this with stuff like McDonald's Monopoly game where you can win prizes from buying certain menu items.

So that would bring up an interesting potential loophole to something like this if it ever was considered gambling.  All the developer would have to do is introduce some element of gameplay skill to obtain the lootbox.  So maybe it ends up being a combination of real world money and a QTE that the game just happens to give you an unlimited amount of attempts to complete.

[oohhboy]

I get why anti-lootbox advocates are trying to use gambling as the angle to get companies to self-regulate, but that seems to be a road that'll either lead to a dead end, or to government regulation that'd have a little too far overreach or unintended consequences.


That said...it WAS the thread of government intervention that forced the industry to self-regulate on ESRB ratings, maybe that's what the industry needs in order to self-police predatory practices like this.

Don't ever use "Government is overreaching" argument, it is inherently done in bad faith as it's use is based on it's built in mechanism to goal shift because the line drawn is arbitrary as it there is no rational behind it. If the government is doing bad things call it the government is doing bad things not that it is "Overreaching" which is a fig leaf for such actions.

While it is true there are people treating the boxes like gambling the damage it might do is limited by how it works. More people gamble, more rare items become available which makes them cheaper. It is a deflationary cycle where eventually it gets to the point the potential payout is so low that even the ardent gambler quits. Also there is the "I am done losing" factor. This naturally doesn't stop crazy people ie; people who dump a weeks wages into Lottery tickets.

This is why developers always produce "Limited" editions of boxes to re-float the market. New "Shiny" things. Another far more sneaky thing they can do however is manipulate the odds to control supply and with electronic markets this is trivial compared to traditional CCG. If there is to be any regulation on this matter it is here. The odds should be available to maintain transparency. Two rare drops in a row even of the same item must be possible no matter how unlikely to maintain fairness.

Another weakness all though I am unsure if there is already a law or not is whether there is any control on the developers as to how you produce the items and who they give them to. They could in theory print a bunch of rare items and past them on for someone else to sell. This is seen with people making "Fake games" to game the Steam card system.

Both aspects above at least for Steam market isn't/shouldn't an issue as it is valve that issues the items so once the developer sets the odds it is out of their hands. This is yourself regulation part, however I believe this simply came about due to Steam having to comply with so many laws in so many countries that it is far better for them to pre-emptively deal with the problem instead of getting caught out.

This is not to say there isn't a gambling aspect to this as you are purchasing something based on chance but that in itself doesn't make it gambling any more than people consider the stock market the same.

I don't know if this is a thing in other countries but in Canada contests require the winner to answer a skill testing question.  It's usually a math problem that requires a little bit of knowledge of order of operations so like (1+3) x 7.  The idea is that if the winner has to demonstrate some sort of skill to win that the contest is not considered gambling.  You see this with stuff like McDonald's Monopoly game where you can win prizes from buying certain menu items.

So that would bring up an interesting potential loophole to something like this if it ever was considered gambling.  All the developer would have to do is introduce some element of gameplay skill to obtain the lootbox.  So maybe it ends up being a combination of real world money and a QTE that the game just happens to give you an unlimited amount of attempts to complete.

This is already a thing for example PUBG gives you points to buy crates rewarded based on gameplay satisfying your "Skill" base portion. This is not the developer selling tickets, it is players in the market place. They don't get a cut unless it requires a key.

McDonald can do what it does because it is only offering the tickets as a bonus to the food and it runs it on a limited basis so it is a promotional event rather than a primary means of business. The prizes and the odds are known. McD cannot withhold unclaimed prizes as all prizes must be given away via lucky draw.

[lolmonade]

I get why anti-lootbox advocates are trying to use gambling as the angle to get companies to self-regulate, but that seems to be a road that'll either lead to a dead end, or to government regulation that'd have a little too far overreach or unintended consequences.


That said...it WAS the thread of government intervention that forced the industry to self-regulate on ESRB ratings, maybe that's what the industry needs in order to self-police predatory practices like this.

Don't ever use "Government is overreaching" argument, it is inherently done in bad faith as it's use is based on it's built in mechanism to goal shift because the line drawn is arbitrary as it there is no rational behind it. If the government is doing bad things call it the government is doing bad things not that it is "Overreaching" which is a fig leaf for such actions.

I'm trying to tread lightly here, given the trouble people can get talking any politics here.  That said, I don't care what your political leaning is - to imply that the Government, especially the quality of people in current federal government, would have a reasoned and well thought set of consumer protections I find dubious. 

And if I were a Republican congressman, I'd agree that the phrase "government overreach" is often done in bad faith.  That said, I'm just a dude that works at an AG company in IL who likes video games, and your assumption that I make mention of it at all as some sort of argumentative maneuvering rather than a legitimate concern is a bit insulting.

To say "government is doing bad things" oversimplifies the nature of the actions being taken.  Why on earth should people limit themselves from using descriptive words to mention HOW a government is doing "bad things"?

[UncleBob]

If we're honest with ourselves though, while we're arguing your hypothetical, we both know the Government can modify and legislate what they decide to define as gambling.

Aye, I live in a state with video poker machines at every corner gas station.

My point isn't to redefine what is/isn't gambling, but to point out that this particular ESRB Ruling makes no sense whatsoever.  The determination shouldn't be if you get *something* back (even if it's something you don't want).  As I'm sure we can all agree, if I to a raffle where one lucky winner gets $1m and everyone else gets a ziploc baggie of dog turds, it's absolutely gambling.

I guarantee that if the ESRB sticks with this ruling and companies continue down this path, we will absolutely see an attempt at regulation here.

As folks have come up with talking about trading cards, lottery tickets, poker, McDonald's, casinos, etc. - each of these things have pretty clear odds and many have third-party (if not government) oversight into the execution of these programs.

Right now, I could sell a game with 'loot boxes' where I claim there's a Golden Armor of Awesomess, which is the sweetest armor in the game.  I could say the only way to get it is in Loot Boxes, I could say it's in One out of every 1,000 boxes, but I could really tinker with the odds so it's in one out of every 10,000 boxes and absolutely no one would know.

There has been a few lawsuits over the years claiming that trading cards are gambling, but I haven't been able to find anything aside from mentions of them being dismissed - Nothing about what grounds they were dismissed on or anything.  It'd be interesting to see this in court with digital goods.  At least with trading cards, you have somehing you own.  With digital goods, you have a license that is as good as the company says it is. :/

[oohhboy]

It is almost always used in that context due to where it comes from to the point it has become dogmatic propaganda. So it is a safe assumption that it is going to be used in bad faith.

My apologises for netting you like that, its nothing personal. It is still a phrase you shouldn't use all the same. There are other issues with the phrase even without the current assumed context but that is beyond what should be discussed here.

New news has PEGI correctly deferring decision to the gambling commission since it is a matter outside the scope of a ratings board. I don't think it will be classified as gambling as not having a wager discounts the notion not to mention the other differences. Then there are also the collateral damage to consider which would kill entire portions of the market.

In the end loot boxes and the blow back is the extension of the hate on micro-transactions. Its another form of MT but now you don't even know the value of what you are getting.

When horse armour came out gamers instantly knew they were going to get nickel and dime from there on hence the continuous push back for most games. Proper expansion packs are a rarity these days oppose to getting sold parts piecemeal so you don't know the total cost of a game even if you do like and buy the content.

Some say "If you don't like it don't buy" it but that just dismisses the problem of not getting a complete product they are expected to pay more to complete it. It is even more outrageous when you have day 1 DLC.

If you want to see a recent example how not to do DLC or MT see Deus Ex Mankind divided where not only was it incomplete it was so blatantly stupid you have to ask what the executives were bloody smoking. They could have mitigated this by releasing the ending for free blaming it on internal corporate issue for coming up with such a dumb idea. In any case if someone wanted to kill Deus Ex for another decade this might have done.

There is no rational reason for this so I have to assume an irrational one. It could be an internal power play with the sabotage being both the collateral damage and the means. It was a guaranteed hit and something I would have brought it I didn't hear about the hack job do to it.

Again UB you cannot apply you example but replacing it with dog turd instead of a dollar as you are explicitly placing a wager in exchange for a chance of more money especially so with known payouts. Another aspect is the complete reliance on luck despite the fig leaf of "Skill" of adding 1+1.

If you get a rare card you can use it to play a game. You can sell it of course but you don't know how much you are going to get and your intentions for you purchase cannot be separated from personal use or you gambling for a rare card.

Another difference is any "Payout" does not come from the originating company. There is no "Pot" what so ever. Even if keys are being sold that money will not come back to the people who paid for it.

So no. Loot boxes is not gambling. However this does not discount the negative and exploitive aspects driven by irrational human behaviour.

[Ian Sane]

Government regulation, or the threat of it, will come if loot boxes have a wide enough impact that there becomes some level of pressure on the government to act, particularly if children end up being seen as common victims.  I don't think adults losing their money on videogames will attract much attention politically but children maxing out their parents' credit card is the sort of thing that gets attention.  Whenever I hear any sort of mainstream attention on predatory videogame practices it usually involves kids.  It seems more insidious that way - con men using your children to steal your money!

The ESRB started because games like Night Trap and Mortal Kombat attracted enough negative mainstream attention that the government took notice.  I don't think this is delving too much into politics but we know that politicians tend to pay the most attention to issues that they think will earn them votes.  Today no one is getting elected by being against loot boxes or free-to-play or microtransactions, mostly because the average voter wouldn't know what the hell those things even are.  Right now we're all annoyed at how our hobby is being exploited but in order for things to change it needs to be a more visual issue.  Sadly that probably means things will get worse until it becomes a mainstream problem and then the government may step in or (I would prefer) appear like they may step in and thus the industry regulates itself to prevent that, like how they did with the ESRB.

[UncleBob]

Again UB you cannot apply you example but replacing it with dog turd instead of a dollar as you are explicitly placing a wager in exchange for a chance of more money especially so with known payouts.

So, replace the million dollar prize with a super powerful Pokemon card.  Or a Honus Wagner trading card.  Or the Hope Diamond.  Or a small island off the coast of Maine.  Correct me if I'm wrong, but you're saying that it's not gambling if the prize isn't money?

[TOPHATANT123]

I believe the main issue is that in some games you can pour loads of money into something and still potentially not get what you want, if it's only using in game currency I don't see the problem, but once you introduce the ability to pay with real money it starts to get messed up. You've seen the YouTube video titled "OPENING 100 PACKS, SUPER RARES!?!" You've seen the news articles about children who spend thousands on their parents credit card buying packs. If there is no limit like on some of Nintendo's games like Pokemon Rumble World, then these kind of things will keep happening. It's addictive and at least they should have to disclose odds. Any game where the business model is whaling, where you can spend a limitless amount of money on it, there should be a tag on the download screen or box that explains it like violence or sexual themes, and it should be a factor in considering a game's rating.

[oohhboy]

So, replace the million dollar prize with a super powerful Pokemon card.  Or a Honus Wagner trading card.  Or the Hope Diamond.  Or a small island off the coast of Maine.  Correct me if I'm wrong, but you're saying that it's not gambling if the prize isn't money?

No but the prize can be a factor so is having a pot, wager, intent, chance, odds, who is paying, is someone taking the bet?

Here is a not gambling example.

On the Oprah show she gave away cars at one point. Now everyone could have brought a ticket in the hopes to be given a car but you cannot separate these people from those who are actually there for the show and see the give away as being a bonus. It is a blind bag attached to the show with what is inside worth more than the ticket price.

Another would be a friend saying "I bet you can't jump over this fence". Even though it has the word "Bet" in it isn't gambling as there is no prize. It still wouldn't be if he did offer one as it would be a display of physical prowess not chance ie; sport/competition. However if a third party makes a bet and someone takes that bet it becomes gambling ie; Horse racing, football office pools.

Loot boxes and CCG isn't gambling even though it does have aspects of it (Mostly chance) with some treating it as gambling and it is exploitive. If loot boxes is declared gambling a big chunk of the game industry would be ruled illegal.

Pokemon, paid Loot boxes, Hearthstone, keys to open boxes, unrelated blind bags. To continue existing some games would have to move to a P2W model where players can buy the card they want direct form the company. Or they would have to go completely F2P. Physical card games would likely go away.

Treasure hunting might become illegal as part of the collateral damage as it would expand the definition of gambling. McD monopoly could be gone as well as Oprah style give away. Steam market. Investments/stock market.

Given blind bags and CCG are not ruled as gambling in any country of importance that I know of and loot boxes are the same but virtual I do not expect them to rule it as such.

[ThePerm]

What I would classify as gambling is the ability to lose something.

If you spent$1 and got $0 you gambled
If you spent $1 and got something valued as $1 you didn't gamble. This is more like a purchase.
If you spent $1 and got $2 you gambled, but it wasn't lossy.

A claw machine is more gambling than a capsule machine. But not totally gambling because skill is involved.
Claw machines have an issue where the claw is randomly strong or not strong, but if you want a prize you can still knock the stuffed animals down.

A capsule machine gives you an item every time. You usually have a good idea what type of item you get.

Stacker or Stack Up IS gambling. In stacker there is the possibility you can line up the stack, but the game will cheat you depending on how many times people have played.

I won a gameboy advance and a DS at stacker. So, I have won, but it is rigged.