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Just as the growth of fantasy sports, sweepstakes and online
poker were curtailed by the reach of gambling laws, the latest
trends in the $138 billion video gaming industry are attracting an
increasing level of unsolicited attention from gambling regulators
across the globe. Much of this attention is focused on "loot
boxes".
"A loot box is like an in-game lottery ticket: for a small
fee, involving real money, a player can purchase an assortment of
items that promise to enhance the game experience."
For example, one popular game gives its 40 million players two
options for obtaining a loot box of game enhancements, such as a
new "Skin" or "Victory Pose". First, players
can obtain a loot box at no cost by reaching the next game level.
Alternatively, at any point, players can purchase a loot box for
about a dollar. In one version of this game, the possibility of a
loot box containing the most desired enhancements is only slightly
better than the odds of being dealt a blackjack from a deck of
cards.
It is in this context that gambling regulators from sixteen
different jurisdictions issued a Joint Declaration reflecting
their common concerns related to the "blurring of lines"
between these video gaming trends and gambling. Each signatory
committed to analyzing such trends, including loot boxes, within
the purview of their respective legal authority to ensure consumer
protection, prevention of problem gambling and the safety of
underage persons.
Despite the Joint Declaration, a determination of which side of
the blurred line a particular video game falls is far from uniform.
Generally, gambling is defined as exchanging consideration for the
chance to win a prize. However, the meaning of these three
prerequisites (consideration, chance, and prize) varies so greatly
across jurisdictions that this general definition is just the
beginning of the legal analysis being performed by the joint
declaration signatories and many other gaming regulators across the
globe.
Whether the video gaming industry can avoid the regulatory
barriers and oversight that befell previously emerging games will
be determined on a jurisdiction by jurisdiction basis.
Disclaimer:This Alert has been
prepared and published for informational purposes only and is not
offered, nor should be construed, as legal advice. For more
information, please see the firm's
full disclaimer.
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