According to a 2018 report by Digital Australia, 97% of Australian households with children have at least one device for playing video games. More than 60% of households have five or more devices.
Since the early 2000s, the boom in mobile technology has seen the spread of video games from desktop PCs to the pockets of young people everywhere. But with that spread has come new hazards, in the form of online social gambling.
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- Gambling Commission published a report last week that three in 10 children had opened a loot box in a video game. It was the highest rate of participation in gambling-style activities.
- As for the present, video game gambling is illegal in most states until relevant laws are passed to make it a legal activity. Any real monies involved in these trading activities would find the individual at a huge risk of complete loss of funds with no recourse.
Read more: 'Loot boxes' and pay-to-win features in digital games look a lot like gambling
Gambling games are mostly rated ‘PG’ or ‘G’
Gambling via mobile devices or mobile games has remained largely unregulated in Australia. In a 2012 study of more than 100 video games featuring gambling simulations, 69 of them were rated PG (8+) and 33 of them were rated G (for a general audience) by the Australian regulator.
In other words, no gambling games received any age restrictions.
The Australian Classification Board, the body charged with rating games, consistently underrates games that feature gambling, despite the potential risk they pose to children.
Part of the explanation comes down to the way games are classified. In Australia, video games classifications are based on six criteria: themes, violence, sex, language, drug use and nudity.
Read more: Social casino games can help – or harm – problem gamblers
Gambling comes under the first broad category of “themes” and is generally classified according to the presence of gambling, gambling references or gambling themes.
Game developers use the classification system to their advantage by skirting the edges of what is considered an acceptable “presence of gambling”. Gambling video games tend to fall into three broad categories in this regard: actual online casinos, social gambling games (which can use real money, but can also be played for free) and games that use gambling techniques.
The latter type, including games such as Candy Crush, use techniques similar to a slot machine, but do not actually look like a casino. The other types often explicitly look like a casino. Regardless, they still receive a G rating.
Risks for children
When children and teenagers play simulated gambling games (featuring either real money or fake money), they are more likely to grow up and gamble with real money. One study found that almost 30% of adolescents who played simulated poker went on to play real poker with real money later in life.
Some companies claim that games can have gambling techniques, with no risk to children, so long as there is no real money involved. However, even if gambling games are ostensibly “free” to play, they pose a risk to young people by making them more susceptible to gambling mechanics, psychological tricks and addiction.
To put it simply, when a young person reaches age 18 and finally enters a casino having previously played social gambling games, they will be more susceptible to real gambling and psychological addiction, because they will be primed for it.
Gaming classifications are out of step
The low classification of gambling games in Australia is out of line with the broader laws on gambling.
In all states, there are strict laws on who can enter a casino and who can gamble, with every state imposing age restrictions roughly correlating with adulthood. If these general laws were imposed on gambling games, they would receive a classification of R (18+) – the highest possible rating – rather than G (for a general audience).
Since 2013, Australia has had an R (18+) category for games. At the time of its introduction, it was argued that the adult rating would empower the classification agency, and stop kids from having access to games that could potentially harm them. It would appear that that has not occurred with regards to gambling games.
Despite recent statements by the Victorian Commission for Gambling and Liquor Regulation that some video game mechanics can “constitute gambling”, not much has changed regarding the law in Victoria or any other state. Victorian officials state that they can do very little when a gaming company or product is based overseas.
However, it is unclear why the regulator, the Australian Classification Board, cannot put higher ratings on gambling games sold in Australia, in Australian stores or on Australian websites.
The benefits of gaming
Video games do not have to be addictive or feature gambling mechanics to be fun or to make money. Many of the most successful video games today feature no gambling mechanics at all. Some are actually good for you because they help develop creativity, keep an active brain or teach new skills.
Read more: The business of addiction: how the video gaming industry is evolving to be like the casino industry
The rise of gamification, or the use of games for serious purposes, has led to a variety of games that assist educators, the government and private companies in creating interactive learning experiences.
It is unfortunate that some video gaming companies continue to develop gambling and anti-social video games, when the power of video games as a positive medium for change is just starting to develop.
Without further action by the regulator, it is up to the states to determine whether online gambling video games should remain out of line with the general laws concerning gambling and age restrictions in Australia.
The number of children with gambling problems has “quadrupled to more than 50,000 in just two years”, according to recent reports. The alarming figures come from the UK Gambling Commission’s latest annual statistics, which showed that the prevalence of problem gambling among children had risen to 1.7%, compared with 0.4% in 2016 and 0.9% in 2017.
To put these figures into context, problem gambling among teenagers overall has actually been declining in the UK over the past 20 years. A review of research revealed that in 2000, roughly 5% of teenagers met the criteria for problem gambling – by 2016, it was less than a tenth of that. The Gambling Commission’s report also suggests that the significant increase recorded in 2018 could be due to changes in the way survey data were collected – though the increase between 2016 and 2017 would not have been affected by this issue.
But as someone who has been researching teenage gambling for more than 30 years, there is still cause for concern. If there has been a genuine increase in problem gambling among teenagers over the past couple of years, I think one of the main factors will have been the growing presence of simulated gambling in video games.
Loot box lottery
Loot boxes, rates, cases, chests, bundles and card packs are, in essence, virtual games of chance which can be purchased in video games. Players use real money to buy these virtual items, which contain a chance selection of rewards. The likelihood of winning rare or powerful items is slim, so players are encouraged to spend more to increase their chances of success.
Many popular video games – including Overwatch, Middle-earth: Shadow of War, Star Wars Battlefront 2, FIFA Ultimate Team – now feature loot boxes or the like. The Gambling Commission’s report noted that 13% of teenagers aged 11 to 16 had played gambling-style games online, and that 31% had accessed loot boxes in a video game or app, to try to acquire in-game items.
Some might argue that buying loot boxes isn’t gambling, because the rewards only have value within the game. But this is not always the case: there are many independent websites (such as loot.farm and skins.cash), which allow players to trade in-game items or virtual currency, in exchange for real money.
What’s more, I have argued that the “prizes” won are – in financial terms – often a lot less valuable than the prices paid. In effect, it is a lottery as to which items might be won. Indeed, loot boxes have already been outlawed in Belgium, on the grounds that they breach gambling rules.
Taking a risk
A recent study found evidence for a link between the amount that video game players spent on loot boxes and the severity of problem gambling. In a large survey of 7,422 gamers, the more money a person spent buying loot boxes, the more likely they were to be a problem gambler. The paper concluded that the gambling-like features of loot boxes could be responsible for problem gambling severity, because the buying of other in-game items had no relationship with the level of problem gambling.
This evidence does not prove that loot boxes cause problem gambling – but it does suggest there is an association that needs to be explored further. It may be that problem gamblers are more attracted to buying loot boxes within video games. But there’s further evidence that simulated gambling – that is, gambling for free – within video games is a risk factor which increases the likelihood of teenagers gambling with real money and developing gambling problems.
For this reason, I argue that children should be banned from playing gambling simulations in video games. For example, in games such as Candy Crush and Runescape there are “wheel of fortune” games, which strongly resemble blackjack, where players have to pay to spin the wheel for a chance reward.
Fish Video Game - Gambling
So it seems that problem gambling among young people has increased over the last couple of years – but not at the rate claimed in many recent news stories. However, the research suggests that loot boxes within video games could be a prime contributing factor to the increase in problem gambling among teenagers.