The Swedish Consumer Agency publishes report on loot boxes and other gambling-like features in games

The potential legal implications arising from the use of loot boxes gained attention from the Swedish government this spring. The government commissioned the Swedish Consumer Agency (“SCA”) to investigate the legal implications of loot boxes and other gambling like features in games and whether or not they affect consumer protection, especially with regard to children and adolescents.

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The SCA states that loot boxes or other gambling-like features in games could be regulated under the Swedish Gambling Act (2018) when prizes from in-game features constitute money or money’s worth (a view shared by the Swedish Gambling Agency “SGA”). If the in-game features have a monetary value from being able to be traded for money or money’s worth (for example through a third part website) then there is a real risk that loot boxes or other gambling-like features in games could constitute gambling and therefore would require a licence.

The Swedish courts have yet to decide whether loot boxes and other gambling-like features in games fall under the Swedish Gambling Act or not. If they would be considered to fall under the act the SCA deems the act to provide a wide protection for consumers. Nonetheless, if loot boxes and other gambling-like features in games would be considered to fall outside of the scope of the act the SCA still considers other Swedish consumer regulations to be applicable and to provide relatively extensive protection.

According to the SCA, the report shows that there is not, at this point in time, sufficient research to be able to establish a connection between loot boxes and gambling nor that loot boxes could be harmful to consumers in terms of gambling addiction or financial troubles. The SCA cannot motivate or recommend any further measures to be taken due to the lack of sufficient research. The SCA also points out that new national regulation might not be the most efficient way of regulating loot boxes and other gambling-like features in games because of the difficulties for the authorities to introduce new national regulation and exercise supervision in a very global and fast-changing industry. However, the SCA still encourages the gaming industry to continue its self-regulation.

Despite the lack of sufficient research the SCA deems there to be grounds for further investigation with regard to children and adolescents, which is considered to be a particularly vulnerable group of consumers. For this reason, the SCA believes that further regulation could be justified, if supported by research, in order to protect the wellbeing of children and adolescents. Furthermore, the SCA does not consider the PEGI- labelling to be appropriately designed to prevent children and adolescents from playing games containing loot boxes and other gambling-like features. The SCA therefore emphasizes the importance of the parental responsibility. For example, the SCA encourages measures like informing parents on how to use parental settings and on how to navigate on different platforms.

The report is perhaps the first step in the process of adjusting Swedish consumer regulation to the risks posed by the blurring of lines between gaming and gambling, especially when gambling-like features in games are aimed at children and adolescents.

 

See initial article here:

(https://mediawrites.law/loot-boxes-whats-all-the-fuss-about/)

See full report here:

(https://www.konsumentverket.se/contentassets/83509d8dffff48559d44de6546ecc362/kartlaggning-av-konsumentskyddet-vid-lotteri–eller-kasinoliknande-inslag-i-datorspel-fi-2019-01630-ko.pdf)

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