GamCare: Lootboxes & Skins Betting Might Cause Gambling Harm to Youngsters

As the internet continues to be part and parcel of everyday life, especially for youngsters, access to online gaming and gambling platform is easier than ever before. In the UK, the legal age for gambling is at least 18 years and above. Industry regulation demands that operators make sure that operators are old enough to engage in gambling legally. But with evolving technology in the video gaming world, it is becoming increasingly difficult for the UK Gambling Commission to keep tabs on emerging types of gaming. 

Looking at loot boxes and skin betting, for instance, the popularity of these gambling-style activities among youngsters is getting out of hand. Many families and professionals working with the younger generation are already showing concern about the financial harm these two gambling-style forms of gaming are causing to youngsters. However, based on the present-day UK Gambling Act 2005, loot boxes and skin betting do not fall under the jurisdiction of the industry regulator, the UK Gambling Commission. 

How Loot Boxes and Skins Work
Loot boxes are in-game ‘mystery items’ that players can buy with real money to collect randomized rewards that usually include ‘skins’. On top of that, depending on the game, players can also trade valuable or rare skins on third-party websites in exchange for real money. In severe cases, children end up hundreds of pounds to try and ‘chase losses’ as a gambler would, hoping to unlock a valuable item. Such emerging forms of gambling-like products are part of why the Gambling Act 2005 is undergoing a review.

In a bid to try and address the teething problem, GamCare, UK’s independent charity organization for problem gambling support and sensitization, held a workshop attended by more than 60 reps from different industries. Representatives who participated in the seminar included heads from the financial sector (e.g., banks, electronic money institutions, and building societies), the debt advice sector, and of course, gambling support organizations. In addition, persons who have suffered from gambling harm from a young age were also present in the GamCare workshop. 

During the workshop, the Gambling Related Financial Harm Project Steering Group (GRFHPSG) came up with recommendations that all sectors could actively follow to drive down gambling-related financial harms for youngsters. The GRFHPSG is composed of organizations like the Betting and Gaming Council, NatWest, PayPlan, and Santander. The said recommendations are as follows:

              1.    Introducing Gambling Blocks to All Bank Cards for Under-18s
Providers of financial services should step up and make sure that every single financial product whose target market is consumers under 18 years old comes with a compulsory gambling block. These providers should also take it upon themselves to keep raising the awareness of the importance of gambling blocks among the students and the younger generation. Youngsters are at a higher risk of developing gambling-related problems, and such measures would prevent financial service providers from being part of the avenues that exacerbate the issue.

              2.    Gambling and Financial Education
Firms that provide financial services and charities offering financial education could also be part of the mission to sensitize youngsters about the harms of gambling as part of their youth programs. The financial education charities and financial services firms could additionally team up with gambling education charity groups who will inform and assist in developing the educational content.

              3.    Placing Limits of Gambling Spend for Young Adults
Gambling businesses could also introduce tighter controls and checks that will monitor players under 25 years old to guarantee that younger players only spend within their means. A blanket limit of gambling expenditure for all players under 25 years old, for instance, is an effective way of protecting the youth from financial harm caused by gambling. Flutter has already rolled out such a program for under-25s on its platforms to try and curb gambling-related financial harm for its younger patrons.

              4.    Preventing Credit Card Gambling
As part of the youngsters’ protection strategy, banks could also consider introducing measures to prevent younger customers like students from gambling with their overdraft facility. Further, the Department of Education could also join forces with firms that offer financial services to students to implement measures that will prevent the youth from gambling with funds from grants and student loans.
             
              5.    Separation of Gambling Within Games
To prevent blurred lines, gaming companies could start separating gambling-like mechanics such as loot boxes within games enjoyed by youngsters. For instance, game developers could review the suitable merchant category coding (MCC) for the in-game transactions. That way, banks will be able to stop the said gambling-like transactions as part of their policy to block gambling transactions voluntarily.

The Time to Protect Under-18s is Now
According to a 2019 survey commissioned by the UK Gambling Commission, youngsters under 18 years old are more susceptible to gambling than smoke or consume recreational drugs. Further, more data from the UKGC indicates that 37% of youngsters aged between 11 and 16 years old in England and Scotland have participated in gambling within the last 12 months. 

Even though loot boxes and skin gambling aren’t technically classified as gambling under UK regulation, their popularity among under-18s is on the rise. However, in the majority of cases, adults aren’t aware of loot boxes and skin gambling and the financial harm they may cause. Unlike traditional gambling, adults aren’t well-equipped to identify the warning signs, and there’s scares information about the potential harm these emerging gambling-style activities can cause.