Should Loot Boxes Be Considered Gambling?

Loot Boxes Online Gambling Question

Esports betting exists in a variety of forms. The best-known example includes traditional betting offered through online bookmakers.

For example, you may wager on one team winning a match in a moneyline bet.

However, this sports betting style isn’t the only way that you can gamble on esports.

“Loot boxes” also see players risk money to win something of value. They’re quite popular among players of all ranges, including young teens.

The latter aspect has caused outrage and resulted in a $5 million lawsuit against Apple. I’ll explain more on the lawsuit, but I’ll first cover more on loot boxes.

What Is a Loot Box?

Skins betting has been around for years. It sees players buy and sell in-game items that they earn, such as weapon upgrades and player appearances (a.k.a. “skins”).

The skins industry once featured a thriving economy that involved many third-party platforms.

Players can still use third parties to buy and sell skins for real money.

However, skins betting has faded away somewhat in recent years. Opponents of this activity claim that it amounts to underage gambling.

Loot boxes have helped revive the struggling skins gambling industry. They offer random weapons, items, or skins to gamers for a price.

Overwatch Loot Boxes Pricing

For example, an Overwatch player might spend $5 to receive five loot boxes. The person then has five chances to get rare items.

Oftentimes, these boxes will deliver common gear that can easily be found in the game.

The best “loot,” meanwhile, doesn’t come about very often. You often need to purchase numerous boxes or get extremely lucky before landing the rarest items.

How Do Loot Boxes Compare to Traditional Esports Betting?

Esports have experienced a popularity surge in recent years. Not surprisingly, online bookmakers now offer lines on plenty of esports events and leagues.

Some betting sites even dedicate their entire business towards competitive gaming (a.k.a. esportsbooks).

In any case, these esports gambling sites feature the same traditional betting that bookmakers have offered for years.

Here are examples of regular esports bets:

  • Moneyline – Straight-up bets that attach odds to the favorite and underdog.
  • Totals – Bet over or under a given point/round total.
  • Outright – Choose the winner of a tournament.
  • Prop bet – Wager on an outcome that’s not necessarily tied to the match’s final score.
  • Future – Bet on an outcome that’ll be decided at a distant point in the future.
  • Live wager – A bet that pops up in the middle of a match (rather than beforehand).

You can see that several types of esports wagers exist. But they all have three main things in common:

  • You’re risking money to win money.
  • You must be of age (18 or 21, depending upon the jurisdiction) to legally gamble.
  • You wager on professional gamers or teams.

The loot box economy differs in all of these regards. First, it doesn’t see you bet in hopes of winning money. Instead, you spend cash for a chance at rare weapons, skins, or other items.

In most cases, your “payouts” are commonplace items that don’t amount to much. You essentially lose by getting a skin/weapon that’s overly available.

Bastion Common Skin

Second, players under 18 or 21 years old aren’t barred from buying loot boxes. Anybody can purchase these boxes as long as they have a valid payment method.

Please Note:
Not all skins and loot boxes work the same. Some games allow the trading or selling of these skins/cosmetic items to other players – so they can sell the items that they collect via third-party skins sites. They can also purchase anything they don’t have from the same outlets.

Loot boxes don’t involve wagering on a professional teams’ or players’ performances. They instead involve buying random chances at earning hard-to-find items that rely completely on RNG.

The only common element that loot boxes and esports betting share is that they’re both a gamble. You’re risking money in each case to gain something of value.

Why Is Apple Getting Sued for Loot Boxes?

Apple doesn’t seem to be a likely company to get caught up in something like loot boxes.

After all, it’s one of the world’s largest smartphone makers and not directly involved in the video game business.

However, Apple is now facing a $5 million class-action lawsuit related to the loot box phenomenon.

Apple Court Loot Cart And Chest

Filed in the U.S. District Court in San Jose, this suit claims that the App Store has promoted purchases that are aimed at children.

The plaintiffs’ court papers detail how Apple makes a significant amount of money through in-app purchases, such as loot boxes.

It also discusses how many App Store games feature some type of loot box.

The Loot Box Issue Goes Beyond Apple and the US

The loot box gambling dilemma isn’t unique to Apple nor the US. Instead, it has arised in other parts of the globe as well.

Gaming regulators in UK and Belgium have both asked that their respective governments update laws to cover loot boxes. They want laws written to include this feature under illegal gambling.

Belgium’s government responded by examining the issue. Officials ultimately decided that these boxes do indeed constitute unlawful gambling.

They took particular offense to how loot in games like CSGO and Overwatch involve the hallmarks of gambling.

CSGO Container Open Rare

Regulators highlighted how gamers can risk money, take a chance, and win or lose.

Last year, the UK’s Digital, Culture, Media, and Sport Committee wrote a report that recommended banning in-game loot. It noted how these boxes particularly target children.

“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm,” said Committee Chair Damian Collins MP.

Will Loot Boxes Ultimately Be Abolished?

Proponents of loot boxes face a tough task in defending their position across the world. After all, these boxes feature the main aspects of any good bet.

  • Risking something of value (money)
  • Random chance (the box could contain anything)
  • Trying to win something of value (in-game items)

Loot may not fit the typical definition of esports gambling. However, it’s close enough to where government regulators are looking into the matter.

Apple is just one entity on the chopping block regarding this case. It’s facing a $5 million lawsuit for promoting loot boxes via in-app purchases.

Third-party skins exchanges may not face direct legal repercussions. After all, they tend to operate in anonymity or at least in jurisdictions where they can float the law.

Skins Exchange Site

However, these exchanges will no doubt be impacted by more countries coming down on gaming loot. Fewer exchanges will exist if the industry takes a downturn.

The main issue is the fact that many teenagers and even those under the age of 13 are buying loot boxes. Given that the contents are a complete mystery, these players are gambling in one sense or another.

Loot has largely evaded betting regulation up until now. After all, buying boxes doesn’t directly equate to esports gambling.

But the loot box economy is firmly on the legal radar now.

Gambling jurisdictions, governments, and angry customers (i.e. the lawsuit against Apple) are doing their best to end this unregulated industry.

Conclusion

A loot box seems like a harmless way to inject more fun into video games. Players can purchase several boxes for $5 and take a chance at earning unique skins and weapons.

However, this concept isn’t anything new. Skins betting has been around for a decade and is now declining as a result of public outrage.

Nobody likes an activity that gives teens or children anything even remotely close to gambling.

Loot boxes provide underage gamers with an opportunity to gamble in a unique way.

Apple could potentially have to pay out $5 million through a class action lawsuit involving loot boxes. The exchanges that allow the buying or selling of loot might also suffer if this industry continues to be targeted.

Rex Hoffman / Author

Rex Hoffman is a passionate sports writer, with over five years of experience covering sports journalism in line with the Vegas betting landscape. His favorite subjects include football, basketball, and baseball. As a Las Vegas resident, he enjoys finding an edge against the local sportsbooks and aims to share his extensive knowledge with both beginners and experienced bettors. Rex also dabbles in horse racing wagering and enjoys typical casino fare like blackjack and poker in his spare time.