German gambling authority probes loot box laws

The Federal Gambling Authority of Germany has instigated a legal review of loot boxes and in-game video purchases.

Glücksspielbehörde (GGL), the regulatory body, has stated its approval of current practices which aim to control and monitor loot boxes, with the protection of children and vulnerable youngsters in mind. As part of the review, loot box reward mechanisms will be probed to uncover if they constitute gambling.

The study commenced with a workshop on 28 February with key input from Professor Martin Maties of the University of Augsburg and esports expert Dr Lennart Brüggemann.

“The aim of the event was to advance the assessment of loot boxes under gambling law and to shed light on all legal arguments in this border area between gaming and gambling,” the GGL said.

What is a loot box?

A loot box can be anything related to a paid element to open a randomized package inside a video game such as EAFC or Counter Strike.

They generally take the shape of a box or a chest and come with a price tag before an animation or progression wheel fills up to reveal the contents. The links to the two stories above are examples of how money can be made by publishers using the mechanic.

Ambiguity on loot boxes

Much of the discussion relates to the legal scrutiny around loot boxes and gambling legislation, and a grey area between gaming and betting that is potentially occupied.

The outcome of dialogue around expert-led workshops, including the one mentioned above, is said to become an influencer on the direction taken by the GGL and its decision-making process. Further talks are planned, including input from other federal states.

Existing German opposition to loot boxes

In recent weeks, the German state of Bremen has discussed banning loot boxes in many popular gaming titles at a national level.

Two motions were filed in the Bremen State Parliament on the subject of loot boxes and in-game purchases with the hopes that they would be supported at a federal level by the Bremen Senate. If successful, a landmark ruling could restrict the use of loot boxes in the northern region of Germany.

Social Democrats, the Greens, and the FDP coalition proposed several restrictions and are keen to work at a federal level to halt the use of the paid-for-elements completely.

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