Dutch regulator warns loot box companies

Loot boxes seem to be in the news again this week, with the Dutch Gaming Authority giving the latest negative opinion about the boxes, which are sold to video gamers as a randomised mix of accessories and prizes.

Without naming the development companies involved, the regulator said that four video games contravene Dutch gambling laws and should be licensed. Problem is, there is no provision in the Dutch regulatory structure for such licensing at present… the legislation remains bogged down in the Dutch Senate, along with online gambling legalisation.

The DGA bases its opinion on its contention that loot boxes carry the risk of problem gambling developing, and as Marja Appelman, director of the gambling authority, opined: “If the items in such a loot box can be traded outside the game, we speak of a gambling game for which you need a permit in the Netherlands and have to take measures to protect consumers against themselves”.

Although the four unidentified companies are at present merely suspects in illegal conduct, the DGA has warned them that they have just eight weeks to make the necessary amendments on pain of fines that could be as high as Euro 820,000.

The regulator decided to investigate the issue of loot boxes due to the soaring popularity of the feature in recent times; it singled out 10 games offering loot boxes, finally zeroing in on the four current ‘suspects.’

The DGA researchers concluded: “In terms of design and mechanisms, they are comparable to slot machines and roulette. However, there are no indications that loot boxes are being opened on a large scale by people who have gambling addictions or problems”,

According to the NL Times newspaper reporting on the development, the DGA description of a company that “uses an internet platform that streams videos of games and players” could refer to Twitch, which boasts around 15 million users every day, who watch around 2,000 professional gamers playing in competitions.

The most popular games on Twitch that contain loot boxes currently include Fortnite, League of Legends, Hearthstone, Player Unknown’s Battlegrounds, Overwatch and World of Warcraft.

Dutch broadcaster NOS reported that loot boxes bring in some Euro 24 million a year for video gaming companies and without regulation this will rise to Euro 40 million by 2020; the broadcaster also suggested that the companies warned by the DGA were possibly the developers of Fifa18, Dota2, PugG and Rocket.

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