Spain's DGOJ Launches Public Consultation on Loot Boxes Classification

For the longest time, the debate on the gambling-like nature of loot boxes has been going on in different parts of the world as their popularity  amongst video Game developers grows. Given that loot boxes are accompanied by microtransactions in a system that entices players to keep spending on them, there have been calls for the video game mechanic to be reclassified as gambling and Spain is joining the movement.

Spain’s gambling watchdog, the Dirección General de Ordenación del Juego (DGOJ) launched a public consultation on the loot boxes on Friday. In the consultation, the regulator is giving three options for loot boxes; placing them under the current gambling regulations, introducing an entirely new regulatory code to govern them, or banning them completely.   

Additionally, in the questions presented in this public consultation, the DGOJ is inquiring whether gambling regulations should be amended to introduce loot boxes whose prizes cannot be swapped for real money and vice versa, in case the loot boxes are classified as a gambling vertical. In the consultation, the respondents are also being asked whether operators of loot boxes should start applying for licenses like a standard gambling product.

Why Spain’s DGOJ is Holding this Consultation

The public consultation is a direct result of a recommendation by Mikel Arana, the Director-General of the DGOJ that the Spanish government should categorize loot boxes as gambling games. For a lot of safer gambling supporters, this is a welcome move as it will open channels to offering more protection to youngsters by restricting access to transactions that are compulsive and impulsive in video games.

Per DGOJ’s argument, 50% of mobile games accessible today, and 35% of computer games use the loot boxes mechanic. And looking at the country’s Gambling Act, for an item to be considered gambling, it has to constitute three main features; a fee of participation, an element of chance relating to the outcome of the item that’s being offered at a fee, and lastly the prize that the player or participant receives.

Clearly, loot boxes come with all three features and as such, it makes sense that they are considered a gambling item or at least restricted for youngsters to prevent them from coming into contact with harmful and addictive digital content.  The public consultation period will end on 31st March 2021.

The Same Conversation is Trending in Other Countries

The House of Commons, House of Lords the DCMS (Department for Digital, Culture, Media, and Sport), and the RSPH (Royal Society for Public Health) among other public services organizations in the United Kingdom have been heavily criticizing this video game mechanic. Australia’s House of Representatives Standing Committee on Social Policy and Legal Affairs also published a report last year explaining why loot boxes should be classed as gambling.

Some countries like the Netherlands, Japan, and Belgium on the other hand have already tightened regulations on the video game loots, officially outlawing them to protect children. And by the way, Netherlands’ gambling ombudsman, the Kansspelautoriteit (KSA) even slapped EA Sports with a €10 million fine last November for having loot boxes in games like FIFA.

As the public consultation on the matter begins in Spain, only time can tell the direction where the conversation will go in the country. After all, not all regions agree that loot boxes should face tighter regulations. New Zealand for instance has maintained that loot boxes cannot be considered a gambling activity and are therefore safe provided the right controls are in place.