Spain’s DGOJ Launches Public Consultation on Loot Boxes

The Spanish gambling regulator DGOJ is asking about the public’s opinion regarding the regulation of loot boxes in video games and whether they should be banned.

DGOJ Claims Loot Boxes Are Akin to Gambling Devices

Spanish gambling regulator Dirección General de Ordenación del Juego (DGOJ) has launched a public consultation related to loot boxes. The authority is asking whether the virtual items should be regulated under the current gambling law, under a new separate regulation or they should be prohibited entirely.

This step comes after DGOJ Director-General Mikel Arana advised the government to reclassify loot boxes as games of chance in November last year. Тhe Spanish government is making efforts to review its digital laws with regards to protecting minors by “limiting compulsive and impulsive transactions”.

Loot boxes are features in video games which can be accessed through game-play or can be purchased for a fee. When a player purchases a loot box, they find out what is inside only after they have paid. The randomized nature of these items resemble gambling devices and should be subjected to scrutiny, regulation proponents say. The main concern is that they constitute predatory practices towards minors.

The Design of the Regulation

The DGOJ said that half of mobile games and 35% of computer games contain the mechanic. The regulator added that under Spain’s Gambling Act, gambling involves three elements – participation fee, chance in relation to the result and a prize for the player. And since loot boxes feature all three elements, they are clearly to be considered a form of gambling, the DGOJ adds.

The survey contains a series of questions related to the best way of regulating the in-game containers. The first question is whether the existing gambling law should cover loot boxes or they should fall under an entirely new law. Also, respondents are asked if loot boxes should be banned in case they are considered gambling products.

In case loot boxes should be included under the existing gambling law, the DGOJ asks if the regulation has to be updated to include loot boxes that produce prizes that cannot be exchanged for money. Also, respondents might share their opinion whether loot boxes operators should apply for a license. The public consultation is open until March 31.

Loot boxes are sparking controversy in other countries as well. Last year, the UK House of Lords Gambling Committee urged for changes in the regulation of loot boxes. In December, the House of Commons published a report on the concerns related to encouraging children to gamble.

In November, the Dutch court allowed the Dutch Gaming Authority (DGA) to impose an administrative order on Electronic Arts. The operator had to pay up to €5 million penalty for loot boxes in the FIFA football game.