As it was reported yesterday by Swedish TV channel SVT, the Swedish government will now officially investigate loot boxes. The investigation will be carried out by consumer protection authority and not by the gambling regulator. However, the consumer protection authority will now contact the national public health department, the gambling regulator and the media council for its views on the matter.
The report is due on 1st October, 2019 the latest and is supposed to help lawmakers to come to an informed decision in relation to a potential amendment of national laws. The investigation is therefore more of general nature, similar to the ongoing investigations in, for instance, the USA and Australia. While no specific publishers or games are investigated, the report states that the consumer protection authority will now look into loot boxes and other lottery or casino-like elements in video games which are currently available.
Minister of Civil Affairs, Ardalan Shekarabi, who was interviewed in the report, also mentions the existence of secondary markets (e.g. skin gambling websites) and states: “[…] then we are very close to what is normally regulated by the legislation for paid gambling”. Like the most gambling legislations, the Swedish gambling legislation requires (broken down) the existence of a stake, a prize and a game of chance in order to meet the requirements of gambling. The prize requirement is typically the center of discussion in relation to loot boxes. Almost all gambling legislations require that the prize has an objective, real world monetary value (one exception to this rule would be Belgium which applies a subjective standard where it is sufficient that the prize has value for the player only). Since almost no video game allows “cashing out” virtual items generated by loot boxes, it can be argued that loot-box-generated items have no real world monetary value and therefore do not constitute regulated gambling. However, this argument gets a “dent” once the items can be traded either within the game or on secondary markets. The possibility to trade items arguably gives rise to supply and demand and therefore an objective monetary real-world value. Mainly for this reason, the NL gambling regulator decided that the loot box mechanisms included in a number of video games constituted gambling. Secondary markets, on the other hand, bring up the subsequent question on whether the acts of an unlicensed and illegal secondary market which has no connection to the operator of the video game and illegally exploits the game mechanic by violating the terms and conditions must be attributed to the game operator which then becomes an operator of illegal gambling. This question is subject to a legal debate in several jurisdictions and is most likely what Ardalan Shekarabi is referring to when stating: “then we are very close to what is normally regulated by the legislation for paid gambling”