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Spanish Draft Law For Lootboxes Moves on to Next Step
By Shane Addinall Jul 27, 2022 IndustryThe controversial topic of whether lootboxes present video game players with similar risks as certain gambling products continues. Lawmakers believe the current evidence justifies restricting the feature.The consultation period for public contributions to Spain's draft decree on regulating random reward mechanisms (RRM) in video games expired on 23 July. Spain's Ministry of Consumer Affairs and its Directorate General for the Regulation of Gambling (DGOJ) published draft laws on the matter on the first day of July. All interested parties could contribute and comment until last weekend.
According to information on the draft document, lawmakers believe sufficient scientific evidence proves the risks involved with lootbox mechanics. The interactive video game feature is heavily debated in regulatory and gaming circles around the globe, and some countries prohibit games with this feature altogether.
The following steps in the process include revision from the Spanish General Court, after which the approved proposals take effect and become law.
The Connection Between Loot Boxes and Gambling
The DGOJ explains in their publication the purpose of the regulatory updates. Consumer protection is at the heart of the project focusing specifically on those vulnerable to harm.
Spanish authorities indicate the similarities between RRM and certain gambling mechanics and call for government intervention to safeguard certain age groups and those prone to gambling disorders.
In the draft decree, the writers elaborate on this point:
"The connection between some of these random reward mechanisms in video games, referred to in this law as interactive entertainment software products, and games of chance are evident from several perspectives."
Because the most relevant element of loot boxes includes random outcomes and the video games include visual and sound effects to entice players, experts argue the physiological arousal from the combination merits concerns. Combining these elements causes specific games of chance to enable compulsive gambling. Spanish authorities want to curb the potential of this in interactive video gaming.
Age and Marketing Restrictions
Spain's draft laws on regulating RRM features in video game products include age restrictions on access to games with loot boxes, regulatory protocols on data processing for age verifications, exclusion programs, and certain advertising restrictions.
Once the laws come into effect, game providers need to establish an age gating system supported by documentary proof of identity from the player and loot box buyer, with the possibility of biometric systems to back this up. Purchasing lootboxes on video games will be like signing up for an online gambling account, barring a few details.
Regulations on marketing materials include time limits and the exclusion of specific content in all forms of advertising. Ads for video games that include RRM may not display wording or images to promote the feature and must remind consumers of age restrictions. Other laws mimic those imposed on the alcohol and gambling industry. Providers may only advertise on video media between 1:00 am and 5:00 am.
The new laws specify in-game changes, including clarity on the rewards' costs and the probability of finding specific items in the loot box. Providers must allow for parental controls and offer players self-exclusion options, including session parameters and spend limits.
Sanctions for Crossing the Line
Spain's government grants operators a 12-month transition period from enforcement, and lawmakers expect the regulations to come into effect in 2024. Following the 12 months, offenders face sanctions based on the severity of the infringement. Those who infringe on the laws stand to receive fines of up to €3 million, depending on the offence, and categories range between minor, severe, and very severe.
The regulation of loot boxes in Spain is not an isolated incident in Europe, as academics and lawmakers have become more aware of and concerned about its impact on society. With more serious consequences like compulsive buying and thoughtless consumption for some players, countries like the Netherlands and the UK consider the same steps.
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