In-game advertising of gambling has seen a rise in the gaming industry, leading to regulatory scrutiny over their impact on younger demographics. While in-game ads have been a cause of annoyance for players, the inclusion of gambling-related ads, hailed as promoting underage gambling, has flagged punitive measures from regulators globally.
From the advent of simple games like ‘Pong’ on Atari to the mind-bogglingly realistic graphics of today’s AAA titles, the gaming industry has witnessed exponential evolution. Along with this journey of evolution, sprang up ancillary mechanisms designed to rake in more capital from this booming industry. Among these, a rather controversial trend that has been on the rise is in-game advertising of gambling.
While in-game ads themselves have long been a cause of mild annoyance for many players, the proliferation of gambling-related ads has led to regulators taking a more serious look at their impact, particularly on younger demographics. Gaming giants like Electronic Arts (EA) have come under scrutiny in recent years for features that authorities deem as promoting gambling among underage gamers.
Take the example of FIFA Ultimate Team (FIFA UT), one of the most popular franchises produced by EA. In this mode, players can buy packs containing random cards representing footballers. The idea is to develop and manage a virtual football team using these cards. However, the thrill of uncertainty that surrounds the opening of these packs, not knowing which cards you might get, has led to allegations that such mechanisms represent a form of gambling, thus exposing young players to gambling-like situations.
In 2020, a lawsuit was filed against EA in California, accusing it of running an “illegal and unlicensed gambling system through their loot boxes.” Subsequently, the publisher faced similar legal challenges in Canada and Europe. This has prompted regulatory bodies across the globe to reassess the potential dangers posed by gambling-related elements within games.
The UK regulator, Gambling Commission, has been keenly following the developments in the gaming sector. Its 2020 report titled ‘Young People and Gambling’ highlighted the close links between gaming and gambling and the exposure of young people to gambling via in-game purchases. The prevalence was worrying, with 44% of surveyed respondents aged 11-16 reported as having paid for loot boxes.
Meanwhile, Belgium has outlawed loot boxes entirely, classifying them as a form of gambling. The decision was taken after an investigation into games like FIFA 18, Counter-Strike: Global Offensive, and Overwatch. Subsequently, EA removed its paid loot boxes from its Belgian version of FIFA.
This development laid down a workable blueprint for other countries to tackle this issue. The French gambling authority, ARJEL, has called for a unified European strategy to address in-game gambling advertising. German authorities have also begun cracking down on unauthorized internet gambling and illegal advertising, for which loot boxes have been under observation.
Simultaneously, age-ratings agency PEGI (Pan European Game Information) indicated its intention to introduce clearer labels for games, indicating in-game purchases and potentially misleading loot boxes. This move, aimed at providing parents with more information to make informed decisions about their children’s exposure to such games.
Taking the discussion into the realms of public policy, U.S. Senator Josh Hawley introduced “The Protecting Children from Abusive Games Act,” aimed to ban manipulative design features in video games marketed towards children. This bill indirectly addresses the issue of in-games gambling advertisements.
Amidst these measures, the gaming industry is also making an effort to self-regulate. For instance, Microsoft, Sony, and Nintendo announced in 2019 that new games on their platforms would require to disclose odds for loot boxes.
As the world moves towards stricter regulation, the question of how far regulatory intervention should extend remains a contentious issue. While consumer protection, particularly that of minors, needs to be a priority, there is a growing debate about where the responsibility of regulators ends and parental control begins.
The line between interactive entertainment and in-game gambling thus remains thin and blurry. The confluence of gaming and gambling does not seem to be receding any time soon. Thus, the role of regulators remains crucial in maneuvering this complex landscape, taking steps to ensure consumer rights are protected, particularly those of the younger playing demographics, while also ensuring creativity and innovation in the gaming industry aren’t stifled.
Concerns surrounding in-game gambling advertising will continue to occupy headlines as regulators worldwide reckon with the multifaceted dimensions of an ever-evolving industry. The stakes are high, and the need for thoughtful and forward-looking regulation is imperative.
Sources:
1. The Guardian: Electronic Arts faces legal threat over loot boxes in Belgium.
2. BBC News: Loot boxes: I blew my university savings gaming on Fifa.
3. The Conversation: The problem with video game loot boxes.
4. Gambling Commission: Young People and Gambling 2020.
5. GamesIndustry.biz: Belgian Gaming Commission classifies loot boxes as gambling.
6. Lexology: Recent French Regulatory Developments in Online Gaming.
7. PEGI: Clearer game information and improved minor protection to be introduced by self-regulation.
8. The Guardian: US senator proposes ban on ‘manipulative’ video game design.
9. GamesIndustry.biz: Console giants commit to disclose loot box odds.
10. The Verge: EA removes FIFA 19 loot boxes in Belgium amid legal threats.
