Loot boxes for adults only under proposed new law

Regulation of computer game “loot boxes” is again back in focus. A private members' bill has been tabled in the Australian Parliament proposing that computer games containing loot boxes be restricted to players over the age of 18.

A loot box is a feature in a computer game where a digital container of random virtual items, such as in-game skins or weapons, can be purchased usually using in-game currency. The in-game currency might be earned by playing the game, but often can be bought using real-world money. Loot boxes are a common feature of today's computer games to encourage spending of in-game currency.

Currently, the use of loot boxes in computer games is unregulated in Australia, as they do not fall within the definition of “wagering” under the Interactive Gambling Act 2001 (Cth). If the Classification (Publications, Films and Computer Games) Amendment (Loot Boxes) Bill 2022 becomes law, it will mean that:

• the minimum classification for games containing loot boxes will be R18+ or RC (refused classification). These classifications require retailers and digital distributors to verify the age of all purchasers; and
• a warning will need to be displayed on game boxes and digital store fronts which states that the game contains loot boxes.

While it is rare for private members’ bills to be passed, there has been growing support to regulate computer game features which simulate gambling.

In 2018 a Senate inquiry report, “Gaming micro-transactions for chance-based items”, recommended a comprehensive review into loot boxes in video games. This was followed in 2020 by the “Protecting the Age of Innocence” report from the House of Representatives Standing Committee on Social Policy and Legal Affairs, which recommended that loot boxes and other simulated gambling elements in games should be subject to age restrictions and warnings.

If the Bill is passed, Australia would join a growing list of countries that have regulated, or are considering the regulation of, loot boxes in computer games. While only a small number of countries (such as Belgium and the Netherlands) have banned loot boxes, many other countries have voiced support for stricter regulation. Following the 2018 Gambling Regulators European Forum, members from the gambling commissions of 15 European nations announced a collaborative effort “to address the risks associated with blurring the lines between gaming and gambling”. Spain has since introduced a draft bill which goes further than Australia’s, as it would also impose spending limits and advertising restrictions on loot boxes in addition to age restrictions and warning requirements.

We will monitor the Bill’s progress and keep you updated. If you’d like to understand the potential impact of the Bill on your business, please contact us.