Loot boxes have become standard practice across many video game titles. While they’ve come under scrutiny as being deceptive business practices or promoters of gambling, it was mostly the community making big claims, at least in the US. Now that the FTC Loot Box Investigation is underway, the United States Federal Trade Commission (FTC) has made their stance on loot boxes completely clear, and that stance is, “yes.”

That was the answer given by FTC chairman Joe Simons when Senator Maggie Hassan (D-N.H.) requested the organization investigate and report on loot boxes. The subject was brought up during a Senate Commerce, Science, and Transportation subcommittee hearing.

What exactly does that “yes” mean?

That’s the burning question since the FTC has not made any further statements regarding how or what they intend to do in such an investigation. One thing that announcement did was light a fire under the games developers to solve the issue before government entities do it for them.

Senator Maggie Hassan Presented the Issue

Senator Maggie Hassan (D-N.H.) utilized a UK Gambling Commission report during the hearing which indicated that 31 percent of minors ages 11-16 had opened loot boxes. Not addressed were the games played or whether the loot boxes were purchased with money or in-game currency.

Hassan had previously raised the issue with the Entertainment Software Rating Board (ESRB) regarding the issue of loot boxes. The ESRB agreed to add the “in-game purchases” label on physical copies and online storefronts for games including microtransactions.

The Federal Trade Commission has not been convinced that in-game loot boxes constitute gambling. However, with the recent scrutiny of loot boxes by trade organizations around the world – it seems the FTC may have to finally take a stance.

Entertainment Software Association (ESA) Viewpoint

Gaming companies need to figure out how they want to approach the loot box situation before others who are not in their industry decide for them. These companies are represented by a lobbying organization called the Entertainment Software Association (ESA) who will most likely negotiate with the government.

After the news broke of a loot box investigation, a representative with the ESA stated:

“Contrary to assertions, loot boxes are not gambling. They have no real-world value, players always receive something that enhances their experience, and they are entirely optional to purchase. They can enhance the experience for those who choose to use them – but have no impact on those who do not.”

Different Stances

The ESA has a firm approach that they do not view the loot boxes as gambling. However, that does not change the fact that loot boxes are under fire. Belgium has completely outlawed loot boxes under their anti-gambling laws and looks to prosecute publishers who still use them.

While Belgium is currently the only country to ban loot boxes outright – they are prohibited from some gaming titles in the Netherlands. Likewise, China and Japan have opted to put regulations on them. Regardless of the stance held by individuals – it is clear something needs to get done.

If it is considered gambling, the whole loot box debacle could potentially get even stranger in the United States. As more states begin to legalize and regulate gambling, what would that even mean if the FTC’s investigation determined they were games of chance?

Who will be getting it done is the million-dollar question. We will have to see if it is the gaming developers, FTC, or some other government entity that sets the standard. I for one am generally interested to see where this whole debate goes.