The House of Lords Select Committee on the Social and Economic Impact of the Gambling Industry has declared there is sufficient evidence that loot boxes are games of chance, and suggested urgent action to bring them under the Gambling Act 2005.
According to their report, smartphones and soft-touch regulation by gambling operators "created a perfect storm of addictive 24/7 gambling", which has practically been left unchecked for quite a while.
Moreover, the Committee said they were "shocked" by the behaviour of some operators who knowingly targeted vulnerable individuals, while ignoring the alarming number of gambling addicts and hundreds of suicides linked to gambling every year.
It's important to note that the report doesn't establish a clear-cut causal link between loot boxes and gambling addiction later in life. Then again, conducting a study that would definitively prove or disprove this would take too much time to be considered practical for the current initiative.
There's also a matter of operators consciously forgoing any academic and/or scientific effort to determine the effects of loot boxes, and then defending them by arguing lack of academic evidence. Needless to say, reaching for such tactics when lives are on the line is not something many academics would condone.
Thankfully, the Committee is determined to err on the side of caution and their report advises immediate action to start regulating loot boxes in accordance with the Gambling Act. Conveniently enough, most of their recommendations don't require legislation, which means it would not take very long to implement them.
"Urgent action by the Government is required. Lax regulation of the gambling industry must be replaced by a more robust and focussed regime which prioritises the welfare of gamblers ahead of industry profits", they wrote.
The Committee's key recommendations are as follows:
- The gambling industry offers a variety of products to consumers, including some which can be highly addictive. The Gambling Commission should create a system for testing all new games against a series of harm indicators, including their addictiveness and whether they will appeal to children. A game which scores too highly on the harm indicators must not be approved.
- The equalisation of speed of play and spin, so that no game can be played quicker online than in a casino, bookmaker or bingo hall.
- The Gambling Commission must explain the minimum steps which operators should take when considering customer affordability, and make clear that it is for the operator to take the steps which will enable them to identify customers who are betting more than they can afford.
- The creation of a statutory independent Gambling Ombudsman Service, modelled on the Financial Ombudsman Service, to settle disputes between gambling operators and gamblers. The Government must act immediately to bring loot boxes within the remit of gambling legislation and regulation.
- Gambling operators should no longer be allowed to advertise on the shirts of sports teams or any other visible part of their kit. There should also be no gambling advertising in or near any sports grounds or sports venues.
- Problem gambling is a common mental health disorder, and the NHS has the same duty to treat it as to treat any other disorder. Last year the NHS promised to open 15 new clinics. It should do this before 2023 and establish a comparable number within the following few years.