To ask Her Majesty’s Government what plans they have to regulate loot boxes as a form of online gambling.
I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as chairman of Peers for Gambling Reform.
My Lords, the Government’s response to the call for evidence on loot boxes is being developed alongside our review of the Gambling Act. We received over 30,000 responses to our call for evidence and will publish the Government’s response in the coming months. It will consider a range of issues, including in relation to gambling. The gambling White Paper will be published in the coming weeks.
I thank the Minister for that reply. He will be aware that, two years ago, the Government responded to a DCMS Committee report saying that the Gambling Act review would have
“a particular focus on tackling issues around loot boxes.”
The link between loot boxes and problem gambling has now been verified by many empirical studies. Given that 60,000 children are considered to be problem gamblers, will the Minister confirm that the much-delayed White Paper will make specific proposals, going beyond the steps recently taken by the games industry, to protect young people from the harm caused by loot boxes and other gambling-like products?
My Lords, I cannot anticipate the much-anticipated White Paper, but we have certainly looked at the potential for harm to children and other vulnerable people through gambling. We looked at the issue of loot boxes separately because it is a technical and distinct area. We are very glad to have had 30,000 responses to our call for evidence. These have been considered alongside 50 submissions from academics and businesses and an independent evidence assessment of academic literature. So, we are looking at this in the detail that it deserves.
My Lords, bearing in mind that loot boxes may be a first step in children developing a gambling addiction in later life, how can the Government justify an 18-month delay before responding to the consultation, which was completed in November 2020?
My Lords, as I outlined, this is a technical area and we have had a lot of submissions to look at, including academic literature on this changing and emerging area. But this has not stopped us taking action in the meantime: we have banned gambling on credit cards, tightened restrictions on VIP schemes and updated the gambling advertising codes to ban adverts that have a strong appeal to children—for example, those featuring sportsmen such as Premiership footballers.
My Lords, loot boxes are a form of online gambling. There is no harm in regulating them, but we have to remember that underage persons are certainly not allowed to participate in gambling. In Kenya, I was a trader in books and stationery and was a leading importer of gambling newspapers and magazines from the UK. Many sensible persons would approach me and say that I should tell my fellow traders that they should not sell these gambling newspapers to children, as a token of good service to society.
My Lords, the Government are committed to ensuring that the UK is one of the safest places in the world to be online, and that includes gaming and gambling. The Information Commissioner’s Office has published the children’s code, which sets out how online services which are likely to be accessed by children should protect them online.
My Lords, there are two main ways of controlling the use of loot boxes—banning or regulation—so what assessment have the Government made of the effectiveness of Belgium’s ban on the use of loot boxes and the Chinese approach of reducing the number of loot boxes that can be opened on a daily basis?
As part of our review, we are of course looking at examples from around the world to see what other jurisdictions have done and will set out our responses in due course.
My Lords, as I do not gamble, can somebody please tell me what a loot box is and how it works?
My noble friend asks a good question and one which I had to ask in preparing for this. In brief, a loot box is a prize which can be won in an online game. It could be a superpower for your character, or it could be a new player for your virtual football team. They take many forms, but they are prizes which have no monetary value; their worth is to be played in the game.
My Lords, following on from that, periodically there are news stories about children racking up bills on their parents’ credit cards to try to win these in-game upgrades. Although Microsoft and Sony have taken steps to make it harder for this to happen via their online stores, there is certainly a case for exploring additional statutory safeguards, so will the Minister look at including provisions in the Online Safety Bill to cover the marketing of and the processes attached to the purchase of loot boxes?
The noble Baroness is right that parental controls are an important tool for parents and guardians to supervise and manage how their children interact with video games. The industry has taken some action to develop parental controls, and some companies have also committed to disclose information on the relative probability of obtaining virtual items. Gaming platforms will be in the scope of the regulatory framework of the Online Safety Bill if they host user-generated content or facilitate online interaction.
My Lords, I recently spoke to a member of the gaming industry, who described loot boxes as a thoroughly nasty, money-making scheme based on the dopamine hit of playing and levelling up in a game. You pay for them. Surely that alone should be enough to justify their being banned.
My Lords, that is why we are looking at the issue of loot boxes to see what action should be taken. As I have said, some games companies and platforms have taken steps in the meantime to improve protections for their consumers since we published the call for evidence. We will set out our response in due course.