Loot Boxes

Lord Butler of Brockwell Excerpts

Thursday 13th October 2022 Lords Chamber

[Lord Butler of Brockwell (CB)]

My Lords, I congratulate the noble Lord, Lord Foster, on obtaining this debate and on the doughty work that he does as the chair of Peers for Gambling Reform. I also welcome the Minister to his new brief.

As the noble Lord, Lord Foster, said, we had expected and hoped that the Government’s White Paper on the results of their wider review of gambling legislation would be published before the Summer Recess, but it was delayed by what the Government would no doubt describe as circumstances outside their control. There are a lot of circumstances outside the Government’s control at present; in fact, it is difficult to think of many that are within it. That is all the more reason to get ahead with discussing what we actually have: namely, the Government’s response on loot boxes.

As we know, the definition of loot boxes is

“features in video games which may be accessed through gameplay … virtual currencies, or directly with real-world money.”

As the noble Lord said, the Conservative manifesto for the 2019 general election committed to undertaking a review of the Gambling Act 2005,

“with a particular focus on tackling issues around loot boxes”.

It is worth noting those words because they imply that, at that time, the Government regarded loot boxes as falling within the definition of “gambling” for the purposes of the Gambling Act. However, the view has subsequently been taken, including by the Gambling Commission, that loot boxes do not fall within that definition because they do not give monetary prizes.

The Government have now said in their response to the consultation that they do not propose to amend the Gambling Act, despite the recommendation of the Select Committee, to bring loot boxes within its purview. I do not propose to waste time arguing today whether loot boxes are or are not a form of gambling, but I would say that most people would take the view in ordinary parlance that when someone pays for access to a loot box giving the chance of a greater or lesser prize, they are taking a gamble. If it looks, walks and quacks like a duck, it probably is a duck. The Belgian gaming commission has concluded that loot boxes are a form of gambling. As I say, I see no point in pursuing that issue today. Its significance for practical purposes is that if loot boxes were defined as gambling, they would come under the regulation of the Gambling Commission.

What matters is whether the harm which access to loot boxes can do might be prevented in other ways, particularly in its effect on children. This is a serious issue and, if we are to believe the Government’s words, they take it seriously. I have referred, as did the noble Lord, Lord Foster, to what the Conservatives’ 2019 manifesto said about this. In her foreword to the Government’s response to the call for evidence, the former Secretary of State said:

“We want all players, especially children and vulnerable people, to have the tools and information they need to enjoy games safely”.


Video games are particularly attractive to children. It follows that particular care needs to be taken to protect children. The majority of Google games and iPhone games contain loot boxes; the vast majority of them are also available to children aged 12 and over. The issue is whether existing safeguards are sufficient to protect children, and the evidence is that they are not. A 2021 report commissioned by GambleAware found that the links between loot-box purchasing and problem gambling have been robustly identified in about a dozen studies—the noble Lord, Lord Foster, cited that. It is certainly the case that only a small minority of loot-box purchasers are problem gamblers, but those who are have a serious problem. As with gambling generally, some 5% of loot-box purchasers generate half of loot-box revenue, and a third of that 5% are problem gamblers.

The Government’s objectives deriving from the call for evidence, as in their response to the consultation, go in the right direction but many of us think—as the noble Lord, Lord Foster, said—that they do not go nearly far enough. The Government’s view is that

“purchases of loot boxes should be unavailable to all children and young people unless and until they are enabled by a parent or guardian”.

Good, but note that there is no definition of “children and young people”, so 12 year-olds will still be able to spend money on loot boxes. The Government welcome the fact

“that some platforms already require parental authorisation for spending by under-18s within games.”

Good, but what about those that do not?

The Government’s solution is to

“convene a technical working group to pursue enhanced industry-led measures to mitigate the risk of harms for children, young people and adults from loot boxes in video games”.

They continue:

“We expect the development of industry-led design norms and best practice guidance with regards to loot boxes to be an output of this work”.


As the noble Lord, Lord Foster, has said, the Government appear to have more confidence in the likelihood that the industry will introduce effective safeguards than many of us do. The fact, which cannot be escaped, is that the industry has a conflict of interest. As I have said, the bulk of its revenue comes from a very small number of loot-box purchasers, of whom many will be problem gamblers. We have to face the fact that the industry has a strong financial interest in fostering addiction—but we shall see.

I see one positive aspect of the Government’s response to which the noble Lord, Lord Foster, did not refer. The Government say that if the games companies and platforms do not improve protection for children, young people and adults, the Government will not hesitate to consider legislative options. Those are not very strong words, but the best thing about the Government’s response is that they will

“provide an update on the output of the technical working group and progress made to strengthen industry-led measures, by the first quarter of 2023”.

That is only six months away and it indicates some sense of urgency. We must hold the Government to that.

This Government do not want to be a nanny state. Many of us welcome that, but sometimes children need a nanny if they are not getting adequate protection from other sources when they need it.