Belgian Gaming Commission releases full report barring gambleboxes in video games

Back in 2017, at the height of mainstream outrage over lockbox shenanigans, Belgium became one of the very first countries to take the problem seriously (instead of just passing the buck). The Belgian committee assigned to investigate concluded in November that “the mixing of money and addiction is gambling” and pledged to ban them. At the end of April of this year, the country effectively did just that. Its Gaming Commission spent several months investigating multiple games, ultimately finding that OverwatchFIFA 18, and Counter Strike: Global Offensive are operating in violation of its laws specifically because of their lockbox mechanics.

At the time, we had only a few scattered quotes from a translated press release, but this week the Commission has released its entire report (and there’s even a version in English). Its goal is clear: to examine “whether the use of loot boxes in video games constitutes a gambling operation in the sense of the Belgian Gaming and Betting Act. ”

The Commission describes how lootboxes generally work to “lure” players into betting money by tricking players with social behavior monitoring, the illusion of skill, celebrity items, personal currency, easy payment methods, confusing data policies, confusing purchase differentiation, obfuscation of rewards and odds, and “the fusion of fiction and reality.”

The report points out that the EU (like the US) boasts a self-regulatory body for the games industry, PEGI – you’ve probably heard a million voice-overs in videos say things like “PEGI 18.” But PEGI doesn’t “systematically check whether the games allow betting, winning or losing actual money” or consider gambling banned in the real world a problem, as long as it’s merely simulated. The Commission finds PEGI unsatisfactory to the extent that it fails to “protect minors and vulnerable players.” Ultimately, the authors conclude,

“The investigation clearly shows that the purchase of loot boxes by players in the examined video games is highly problematic, both in terms of the purchase as well as in terms of the techniques used to allow players to bet using loot boxes. The self-regulating classification system of video games does not offer the protection envisioned by the Gaming and Betting Act. In fact, there is no single systematic protection of consumers, minors or gambling addicts from gambling. More and more people, including young people, are confronted with gambling without realising it. Because they experience wins and losses in connection with monetary wagers, they are, as it were, raised to consider gambling to be normal and are less capable of resisting the dangers of gambling. The disguised character of games of chance is extra problematic in the case of children. If there is no adequate intervention, then games of chance in video games will increasingly cause harm to players, families and society. The paid loot boxes in the examined games Overwatch, FIFA 18 and Counter-Strike: Global Offensive fit the description of a game of chance because all of the constitutive elements of gambling are present (game, wager, chance, win/loss). The loot box system in Star Wars Battlefront 2 prior to the official release of the game also fits this definition, but this is no longer the case today.”

Source: Belgian Gaming Commission. With thanks to BrotherMaynard!
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Your Honor
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Your Honor

I am confused by some people defending the gamble box system in the comments below.

Regardless of what you think gambling or not it’s undeniable that gamble boxes are a terrible way to distribute content whether cosmetic or not to customers. It is incredibly anti-consumer and has to go away for the sake of video game industry as a whole. If it takes them to be labeled as a gambling mechanic to go away, so be it.

What argument can anyone put forward that is pro gamble boxes in any situation.

ainzooalgown
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ainzooalgown

There can be no argument for allowing gambling to continue but imagine the outrage as all the previously ultra rare items appear in stores for several hundred dollars to compensate for their low drop chance.
People will just scream P2W even if these are cosmetics.

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Alex Malone

Another step in the right direction.

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Dobablo

Lockboxes are an important life-lesson for children. They help to teach them that…
(1) Sometimes we don’t get what we want.
(2) In the event of (1), apply large doses of credit cards.

Skoryy
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Skoryy

Watching the fallout from SESTA/FOSTA and, yeah, I’m still having bad feelings about even more internet regulation. But the lootbox debate is part of a larger one I’m seeing where the gaming market is polarizing in all bad ways between the haves and have nots and that deserves an article unto itself. I gotta write that up at some point.

Until then, I’ll just leave this here. Remember, THINK ABOUT THE CHILDREN: http://www.casinoseurope.com/belgium/

Loyheta
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Loyheta

This is a pretty bad problem. I have a nephew that asks for PSN and XBox money for his birthday and christmas every year. I just found out he has been spending it on gamble boxes in Overwatch and other games. I also know a friend whose kid is addicted to these. He is always wanting one more lootbox because he didn’t get the skin he wanted. He doesn’t save up money for new games or for going to a theme park or anything else kids his age want.. he just asks for overwatch boxes.

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A Dad Supreme

He doesn’t save up money for new games or for going to a theme park or anything else kids his age want.. he just asks for overwatch boxes.

Sounds like an enabler problem to me. Don’t give money. Don’t give cards. Buy the games for him as gifts.

That way you know it’s going to a new game. It doesn’t sound like they aren’t stealing money or turning tricks yet so it’s not to late to stop the enabling behavior.

You wouldn’t buy an alcoholic just one beer, so don’t let them have just one gamblebox. Unless these kids have parttime jobs, they are being enabled by parents and family because they can’t make money appear out of thin air.

If you think this is a pretty bad problem as you say, you should have a talk with his parents and tell them to just buy the games.

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Michael

Yeah the solution is always to never trust your kids…./facepalm

But seriously, the main problem is lack of transparency. You should not be able to buy gift cards that can get you loot boxes. This would go a long way in resolving some of the issues with loot boxes. Basically, when you go to purchase a loot box it should ask for a credit card to verify your age and it should clearly state that what you are purchasing is gambling crates / boxes. This way parent’s dont have to constantly monitor their kids every time they get a gift card.

I mean, the reality is that it won’t just be their parents giving them gift cards.They could get them from friends or class mates just as easily. They can also trade in games to GameStop and get gift cards as well. So if you give them any money at all, they could go buy a gift card themselves and buy loot boxes. It is pretty unreasonable to not expect parents to completely disallow their kid to ever have money because that is an essential lesson in teaching kids responsibility so yeah…

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A Dad Supreme

Yeah the solution is always to never trust your kids…./facepalm
But seriously, the main problem is lack of transparency.

Transparency doesn’t help a kid he described. Not sure how you think it would.

That kid would still get the cards and money, log-in, look at the “odds” and say “Yeah, that’s transparent” and proceed to do the same thing he’s always done, probably laughing at the silliness of a “warning”.

It’s not trusting your kids, it’s a simple issue of the kid having too much of something and not being grown enough to control his urges. Giving someone in that state the means to further their addiction should be criminal. If it was drugs, then it would be.

If your kid had a problem of eating all the chocolate cake each time you brought it home, would you explain why he shouldn’t because he’d get fat, or diabetes and then you think he’s good to go, lol?

Seriously, the minute you out the door, he’s on that cake. So you stop buying chocolate cake so he doesn’t eat it.

That a kid will “still trade” and get them is immaterial. Addicts (and kids) will always find a way to do something.

The point is that the parents (remember those?) aren’t the ones supporting the addiction, unlike as is stated above.

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Arktouros

I love how everyone sees one relatively minor country (Belgium has the population roughly equal to Ohio) passes a law and suddenly it’s the downfall of Lockboxes everywhere. But Hawaii (or roughly 0.43% of the US population) did it too! Haha.

The biggest issue with the report, over all, is their comments on monetary value. For example they state:

Some items therefore have a certain exclusivity and thus a monetary value.

However this opens up a lot of issues by giving virtual items real world monetary value. If I’m playing GW2 and earn a Black Lion Key through game play (either farming gold for gems to buy a key or finding one in game) and get an exclusive Black Lion Chest skin that would be labeled as having monetary value here. Am I going to need a W-2 from ANet for playing on my GW2 account for all the monetary value I’ve generated playing the game? That scenario sounds absurd but, legally, that’s where these kinds of things end up going.

Thankfully, for now, all this nonsense has kept to minor countries and states that are largely irrelevant to the grand scheme of things. People still seem rather ignorant of the greater costs of the route they wanna go.

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Droniac

Two “minor” countries. The Netherlands came to a similar conclusion prior to Belgium. Meanwhile numerous other European governments are conducting investigations of a similar nature. The Dutch Gambling Authority also revealed that it’s been in contact with these countries and is lobbying for a unified European verdict.

Having the entire EU condemn lootboxes in games wouldn’t be a very good thing for these publishers. Particularly EA after their FIFA comments. And that outcome is not unlikely either. The Net Neutrality issue in the EU was forced in a similar way when The Netherlands and Slovenia decided to (fully) enforce it in 2012.

Also, I wouldn’t say that having both the political (Belgium) and legal (The Netherlands) capitals of the EU, not to mention two founding members, condemning lootboxes is “insignificant”.

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Arktouros

The Netherlands rulings are based entirely on the point that the items in boxes can be transferred from one player to another. As EA stated in their own calls they’re in line to cooperate with that point of view and simply not allow trading of items from the lockboxes (which was already the case in many games).

The Belgium finding, by comparison, is overly broad and basically defines even some game mechanics as gambling. I will not be surprised if this eventually gets dialed back to be in line with other countries if it ever gets to the EU level.

To which, this is all Europe. Good luck seeing anything like this happen in North America especially in our good ol’ corporatocracy that is the US of A.

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Schmidt.Capela

The Netherlands ruling indicates that even the lootbox schemes found to be legal are seen as undesirable, which indicates some political will to further regulate them; whether this will result in legislative action is still to be seen, but is perfectly plausible. Particularly so because Belgium is already taking action in tackling that, providing a path for the Netherlands to follow.

As for whether the US will follow, there’s a good chance it won’t matter. If the whole EU decides to ban or regulate lootboxes, it’s quite probable that devs and publishers will figure they lose less money complying with Europe than either pulling out of the European market or trying to implement different monetization schemes for different countries. This is why a lot of products sold in the US comply with EU regulations; if the product is going to be sold in the whole world, it’s often cheaper to comply with all regulations in a single product than to design (and manufacture, and support) different versions for each market.

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Droniac

That’s not entirely correct.

The Dutch Gambling Authority did state that only lootbox systems that allowed for trading items with real economic value are illegal. However, they also made the same points the Belgians have now made and strongly urged other companies to change their lootbox implementations as well. Therefore it is likely that if the games industry refuses to self-regulate, particularly with regards to stimulating addiction in minors, other European government agencies will step in and start regulating for them. One such government agency in Germany is already investigating lootboxes and liable to come to a similar conclusion.

The Belgian definition of when lootboxes constitute gambling can be considered to be too broad. However, Guild Wars 2 is a very poor example, because it almost certainly violates the Dutch gambling laws as well. You can buy gold with real money in-game and use that to buy those Black Lion Chest items. It’s a prime example of tradeable lootbox items with real economic value.

kjempff
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kjempff

Some good things are happening in that beurocratic EU mess sometimes. Like requiring Ireland to tax Apple 13billion € (because it is basically a 0% tax haven arrangement, and as such illegal within the EU).
And so could lootbox regislation happen, but lets see what the actual result is after the lobbyists have been working, after all there is big money in this f2p/lockbox shit.

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Schmidt.Capela

You took that quote out of context. It’s from a paragraph discussing the prizes inside CS:GO lootboxes, which indeed have a monetary value, both in Steam’s Community Market and in outside trading sites:

The items that a box might contain are listed next to the box. Colour coding (comparable to that used in Overwatch) is used for displaying the in-game value. Some items therefore have a certain exclusivity and thus a monetary value. The value of the items in the loot boxes can always be checked via the marketplace where each item is separately sold. The purchase of a loot box can therefore be especially lucrative in that case. Additionally, weapons can be exchanged or be resold for real money through a third-party website. These websites are always linked to Steam (the Internet platform on which C-S: GO is played).

That is the only game where the report found that the prizes have a monetary value, BTW. In the rest of the report it reinforces how gambling doesn’t require the prizes to have a monetary value; what needs to have a monetary value is the wager, which is to say, the acquisition of the lootbox.

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Arktouros

In the rest of the report it reinforces how gambling doesn’t require the prizes to have a monetary value; what needs to have a monetary value is the wager, which is to say, the acquisition of the lootbox.

Honestly I wanted to avoid that topic because most of section 5.13 is actually one of the most stupid things I’ve read in a long time. Like actually more stupid than the Hawaii legislation which I didn’t think was possible.

First they do this whole bit establishing how items in these boxes have value even “merely aesthetic.” Not only do they have value, but some items are more valuable than others because of scarcity (they’re rare). Then, and this is where they fuck up with the mental sumersault, because players don’t get those valuable items from the boxes then they’re going at a loss.

Why is that a fuck up? Because it ignores the inherent value they already established the items have from the items they did get from the box. They paid $X and got $X from the box. It wasn’t a loss and nothing gained, it was something gained for something paid. You just didn’t get $X+$10 from your $X.

It then, because it’s not done just contradicting itself, goes on to equate buying items in a cash shop over those who don’t as winning because they now have an advantage over other players. Yea, they dropped a P2W argument down on the cosmetic skins LOL

In essence, they measured disappointment and labeled that a loss. It’s the height of ridiculousness. Oh I went to go see this new movie, and I gambled my entrance fee but I was disappointed in the movie I got boo hoo this should be illegal.

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Schmidt.Capela

In essence, they measured disappointment and labeled that a loss.

Yep.

It’s the height of ridiculousness.

Nope, because what they want to avoid isn’t the possibility of a monetary payout, but the exploitation of the addiction mechanisms behind gambling, which are based on the disappointment of the loss and the elation of the win for a random event.

Oh I went to go see this new movie, and I gambled my entrance fee but I was disappointed in the movie I got boo hoo this should be illegal.

Nope. In this case you have the payment (wager) element and perhaps the loss element, but you don’t have the chance element (in that what the cinema provides you has no element of chance) nor the game element.

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Brother Maynard

Why is that a fuck up? Because it ignores the inherent value they already established the items have from the items they did get from the box. They paid $X and got $X from the box. It wasn’t a loss and nothing gained, it was something gained for something paid.

You completely ignored or forgot one of the big points made in the report (and in the Belgian Gaming and Betting Act):

In this case you play against the operator (EA, Activision, etc.) and their win counts just as much as your win/loss in establishing whether you’re playing a game of chance. When they get your five dollars spent on a lockbox and you get useless junk in return, it is considered a win (for the game operator) under the Belgian gambling legislation.

Whenever players place a bet (pay five dollars for a lockbox) and lose it by not getting anything or just pointless trash, then of course there is a loss for them. It stands to reason. The value of the items has no relevance in establishing whether it’s gambling – a bet takes place and players lose it = one of the conditions for it being gambling has just been met.

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Michael

Lol, you took something completely out of context and used it for the basis of your entire argument. Bravo!

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Jack Pipsam

People said that about Australia, yet we spooked Valve into changing their entire global refund policy.

Your Honor
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Your Honor

This report shits so hard on every disgusting practice large publishers were pulling. I really hope the gamble boxes will go away.

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Castagere Shaikura

It won’t happen here though. EA and all the other giant game companies will send their lobbyist to DC with bottomless wallets to buy off politicians.

Your Honor
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Your Honor

I am in EU though.

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J

I look forwarded to the continued downfall of lootboxes and gambling in online games. Two dominoes have now fallen. Their research and facts can now spread and be used to come up with legislation in other countries.

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Brother Maynard

The report is well worth a read (including endnotes – they contain some very illuminating explanations). But for all the tl;dr folks or those with no time to go through the 18 pages, a couple of interesting bit are copied below.

Also – remember the original article two weeks ago and the claim of the game studios that the gaming commission “has not been in contact” with them? (it was in one of the linked articles, gameindustry.biz, I think). Well, guess what (from the report):

– Overwatch: “The developer did not respond to the request for more information about this.”
– EA: “questions put to EA were not met with a response”
(no info on CS:GO, but presumably a similar result came from Valve)

Techniques used to lure players into betting money:

– (Social) behaviour monitoring
– The illusion of the game of skill
– The fusion of fiction and reality
– The use of celebrities or cult items
– The introduction of a personal currency system (paid or unpaid)
– The approachable payment methods
– A vast and unfathomable data policy
– Differentiation in loot boxes without this necessarily having added value
– The hiding of a random number generator or at least the lack of transparency thereof

But there’s no monetary value…?

A wager (bet) of any type is sufficient to qualify as betting for these games. Use of money is not necessary. Just because virtual currency is used in a game does not mean that there is no wager. It must be possible to attribute a value to this wager, however.

Value can be defined as the degree of usability. Specifically, items that the player finds useful or nice and for which he pays money.

But players don’t win anything.

The type and scope of the win is also irrelevant for the requirement of the transaction. Something that is described as a “bonus”, “gift” or “reward” by the parties can also be qualified as a “win”.

The win therefore does not necessarily need to be of the monetary kind. The impossibility for a player to convert the game currency back into money does not
rule out application of the Gaming and Betting Act.

Surely, online games are games of skill…?

To avoid the earlier discussion with games of skill […] a broad interpretation of the chance requirements was adopted in the Belgian Gaming and Betting Act. It is therefore sufficient for chance to be a secondary element in the course of the game, the indication of the winner or the determination of the size of the winnings.

Chance must therefore be understood as the occurrence of an indeterministic event, situation or outcome, so when the chance of a specific event, situation or outcome is not equal to one. Specifically, chance may be present when opening loot boxes.

What about RNG?

Based on the in-depth data recording and analysis, which frequently goes beyond the individual (the region is also recorded and analysed), it is possible to obtain a purely behaviour-related RNG.

This means that the content of the loot box can be manipulated depending on behaviour, results, wallet, cursor use, payments, nationality, Playstation use, hours, quantities, etc. In this case, we are dealing with a subjective RNG.

Use of personal data is not considered a wager in this investigation. However, it must be noted that the developed data management can be very problematic with a real risk of large-scale manipulation of players.

Anything about Disney?

In conclusion, we noticed that not only the game manufacturer and game platform but also the companies that grant licences such as the international football federation FIFA and Disney must urgently be confronted with the part they play in the operation of illegal gambling and the need to protect minors and vulnerable players.

BGC’s recommendations for distributors and game developers:

– Clear indication of the chances of winning for the various item values.
– Permit complete control of the random number generators used for the loot boxes by the Gaming Commission’s Technical Assessments team.
– Provision of the data of players and payments.
– Introduction of a financial ceiling for the monetary amount that can be spent on loot boxes.
– The presence of paid loot boxes may not impede or disadvantage a normal game without paid loot boxes.
– A game symbol ‘gambling’ is needed (e.g.: “contains gambling”).

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Cosmic Cleric

Just wanted to thank you for a very informative, well written, post.

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Schmidt.Capela

Wait, if I understood it correctly the “Anything about Disney” part, Belgium wants to hold not just devs and publishers responsible for the lootboxes, but also the IP licensors. In other words, Disney itself could suffer punishment in Belgium if any game using a Disney-controlled IP sells lootboxes to Belgium players.

So that is why the Belgium Gambling Commission said back then that they would be contacting FIFA itself.

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Brother Maynard

Their recommendations section is split by target groups. One of them are ‘granters of licences’ and the recommendation reads:

With regard to the granters of licenses such as the international football association FIFA and Disney:
– Take into consideration quality standards if the licence is granted to a game developer (no illegal gambling, no promotion of match fixing, etc.).

We’ll see if the gaming commission will also turn towards licensors – I’d say they’ll take it one step at a time, starting with the more pressing issue of game developers pushing gambling in their products.

But yes, it would seem that in the long run – when the game devs situation will have improved – they will also engage with the big licence holders involved in these schemes.

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Wilhelm Arcturus

Sure, if you call them “gambleboxes” they sound bad.

Meanwhile, care to explain the Loterie Nationale you run Belgium?

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Brother Maynard

Meanwhile, care to explain the Loterie Nationale you run Belgium?

Why? Can’t search for the publicly available documents?

Statute, rules, functioning of the lottery, contract with the state – it’s not rocket science…

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Schmidt.Capela

Licensed gambling. As opposed to unlicensed gambling when lootboxes are added to games without first obtaining a gambling license.

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Nosy Gamer

If you don’t give the state its cut, they come after you.

Loyheta
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Loyheta

Are you talking about a national lottery? Something that requires you to be an adult?? Did you miss the vast majority of what this article was about? It’s about preventing children from growing up thinking gambling is harmless because it is in video games. It is also about how there is no video game regulation system that will prevent them from being in games and prevent children from buying them. They are saying how PEGI and ERSB are useless trash that won’t do anything meaningful about lootboxes.