esports regulation

Spain’s DGOJ launches consultation on loot box ban

| By Daniel O'Boyle
Spanish gambling regulator the Dirección General de Ordenación del Juego (DGOJ) has opened a consultation asking whether loot boxes should require new regulation, be regulated as gambling products or prohibited entirely.

Tthe DGOJ pointed out that loot boxes have “quickly become a very relevant business model” in both paid and free-to-play games.

It said around half of mobile games and 35% of computer games contain the mechanic. Loot boxes are ‘blind-boxed’ items that players purchase for a fee, for the chance to obtain valuable in-game items.

It also said that loot boxes share many features with gambling products, including “near misses” and “ losses disguised as wins”.

It added that some countries such as Belgium have already opted to consider loot boxes gambling products, while others including Great Britain are looking further into the matter.

The regulator also explained that under Spain’s Gambling Act, gambling involves payment for participation, chance in determining the result and a prize transferred to the winner.

The DGOJ therefore said loot boxes could clearly be considered gambling. This depended on whether the purchase of the box was an action distinct from purchase of the game, if the prize depended on chance and if the prize could be exchanged – inside of outside of the game – for money.

“This legal definition, known and assimilated by all entities with activity related to gambling and betting, is also applicable to loot boxes,” the DGOJ said.

“It is irrelevant if that reward is a cosmetic improvement in the video game or competitive advantage for the player who obtains it.”

The DGOJ asked a series of questions to determine how best to regulate the feature. The first of these questions was whether loot boxes should be considered under the remit of the country’s gambling legislation or whether a new regulatory model should be designed.

It later asked whether, if loot boxes are considered gambling products, they should be considered legal products or prohibited entirely.

If a new framework is needed, the DGOJ then requested information on what this should entail and whether a specific consumer protection framework should be devised. 

If loot boxes are considered to be regulated under gambling laws, the DGOJ then asked whether regulations need to be updated or can be applied in their existing form. In particular, it asked whether definitions should be expanded to include loot boxes that produce prizes that cannot be exchanged for money.

In addition, it requested views on whether loot box operators would need to apply for gambling licences and who exactly would be considered a licence-holder.

The consultation lasts until 31 March, with the regulator accepting submissions by email.

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