Loot boxes are packs of in-game items players can buy using real money, but the contents of a pack are randomised and not known until after purchase, leading to fears that it could act as a gateway to gambling for young people.
Speaking to the Digital, Culture, Media and Sport (DCMS) Committee looking into addictive technologies, Margot James suggested that more research is needed to link loot boxes to gambling.
“I would contest the assumption that loot boxes are gambling and I don’t think that all the evidence that I’ve read from your committee’s hearings would support that assumption either,” the minister told MPs.
“Loot boxes are a means of people purchasing items, skins as they’re called, to enhance their gaming experience, not through an expectation of an additional financial reward and importantly they can’t be traded offline for money, so I think there are big differences and I don’t think really it is true to say that loot boxes are gambling.”
Ms James said her department is not complacent about the issue and that it would take seriously any evidence suggesting that loot boxes are gambling.
“My concern would be that, if research showed them to be a gateway to gambling, then I think that we would be very concerned and we would want to see action being taken.
“I think there is some evidence emerging that loot boxes can be a problem but I don’t think we can yet say they are gambling.”
Ms James’s comments come despite the Gambling Commission voicing concerns over blurred lines between gambling and video games.
It estimates there are 55,000 children and young people aged 11 to 16 with a wider gambling problem, of whom 450,000 are gambling regularly.
The NHS recently announced a new service for 13 to 25-year-olds based at the UK’s only dedicated gambling addiction centre, the National Problem Gambling Clinic in London, with up to 14 more gambling addiction clinics, initially focusing on adults, expected to open in the coming months.
The wider debate has centred on whether video games should be considered addictive and whether developers should take more responsibility for its younger users.
Fortnite maker Epic Games, Electronic Arts, and Candy Crush owner King have already provided evidence to the committee but have skirted around questions about the potentially addictive nature of their games, despite the World Health Organisation’s (WHO) decision to recognise video game addiction as a disease.
Information Commissioner Elizabeth Denham also spoke to the committee about its proposed standards to keep internet companies in check over child safety.
“We feel that that industry, e-gaming, has some maturation to do in understanding what their obligations are in data protection law – so that industry is quite concerned about our code because it feels that it will undermine or impact the business model,” Ms Denham said.
She also said the Information Commissioner’s Office (ICO) is investigating the popular app TikTok over its usage of user data.