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Perspectives on Loot Boxes

NATIONAL COUNCIL ON PROBLEM GAMBLING

A feature that has become part of the majority of popular video games threatens to become a gateway to problem gambling: loot boxes. Loot boxes are consumable virtual items in video games that can be redeemed to receive a randomized selection of further virtual items, or loot, ranging from simple customization options for a player’s avatar or character, to game-changing equipment such as weapons or armor.

Loot boxes are extremely profitable for video game companies. Payments are made through micro-transactions that may involve box purchases of 99 cents. However, repeated purchases of loot boxes can quickly escalate into thousands of dollars of purchases over time.

The National Council on Problem Gambling (NCPG) believes that many games with loot box systems already meet criteria for gambling, as players who make purchases of these boxes don’t know if the item they seek will actually be in the box.

Some loot boxes that have the same or similar characteristics of slot machines may not meet legal definitions of gambling but carry the same risks for addiction.

A legal definition of gambling is not required for a feature like a loot box to cause harm. The Diagnostic and Statistical Manual of Mental Disorders (DSM) and ICD (International Classification of Diseases) clinical criteria for gambling disorder do not require that rewards be “real money” or preclude a diagnosis if the client played with virtual coins or received several free plays before spending excessive amounts of time and money purchasing loot boxes.

  • Factors common to many loot boxes and slot machines:
  • random distribution of prizes
  • variable value of the prizes
  • visual and sound cues associated with participation and reward trigger urges to play along with increased excitement and
  • faster play

Consequences of gambling problems:
• financial harm
• emotional difficulties
• poor work or school performance
• poor mental and physical health
• higher rates of depression and substance abuse

Strong regulation is important, but it cannot be effective at reducing harm unless accompanied by equally robust prevention, education, treatment, recovery and research.

NCPG recommends addressing concerns around loot boxes and addiction with a multi-layered approach to users, parents, and communities to ensure an appropriate range of protections is put into place for youth and other vulnerable populations.

Key initiatives should include:
• creating better informed consumers
• preventing gambling-related problems
• encouraging treatment-seeking
• supporting recovery
• increasing research to enable evidence-based solutions

The Convergence of Gaming and Gambling

The Convergence of Gaming and Gambling

A major concern when it comes to youth addiction to gambling is the convergence of gaming and gambling. Many games now include gambling features and many gambling activities have gaming-like features.

Games that include gambling-like features are most concerning. Unfortunately, these gaming sites are both very accessible and unregulated. They include social casino gambling, which is considered gambling without risking money. However, these sites typically include virtual currency, and thus can be seen as a “training ground” for future gambling with real money when participants are of age.

An example of gambling-like gaming is a video game that features mini-games one can bet on in a simulated casino. There are also many opportunities to participate in social casino games through social media.

Another example of “gambling” is a video game that features loot boxes, where players can spend money for access to unknown game features. According to Gambling Research Exchange Ontario, free gambling-like games are now more popular than online gambling for money. In recent years, there has also been an increase in the number of people who bet on different outcomes of video games.

Studies show that young adults and adults who are exposed to these types of games may be more likely to develop gambling problems.

Electronic gaming machines (EGMs) are gambling devices that offer a variety of games. They may have the same theme as popular television game shows. EGMs are found at casinos, on cruise boats, at racetracks, at local bars, and even at corner stores. EGMs may have an element of skill or a feature that makes it seem that skill plays a role. Researchers believe that features such as these help to attract young participants and keep them gambling.

Today’s youth are the first generation to grow up with electronic gambling, such as video poker and video slots. Electronic gambling is considered to be the most addictive type of gambling because games can be played rapidly, there’s easy access to money (through credit cards), the activity takes place in isolation and there is no potential for human intervention to monitor the gambler’s behavior.

Evidence shows that the age group most affected by gaming disorder is adults between the ages of 25-40. However, given that this is a relatively new platform and online access is far more readily available today than just ten years ago, monitoring minors’ activities in gaming and creating appropriate prevention messaging will be important.

Children and teens have little awareness that regularly partaking in these types of activities may lead to problem gambling issues later in life. In fact, most individuals, whether minors or adults, have little awareness that these unregulated sites are, in fact, designed to be more predatory than regulated sites.

Why is Youth Gambling a Concern?

Why is Youth Gambling a Concern?

Youth problem gambling is a growing public health concern. While parents may think gambling is less of a problem than drugs, smoking or drinking, there’s still reason to be concerned. Gambling can become an addiction — and is statistically more likely to occur the younger a person first gambles.

Gambling problems have long-term, severe consequences on a teenager’s life and on the life of those close to him or her. Some of the adverse effects of a gambling problem can be seen on various levels of individual functioning (cognitive, social and academic) and on both mental and physical health.

Despite the fact that gambling activities are legally restricted to adults in many jurisdictions —and have traditionally been viewed as an adult activity — there is clear evidence that underage youth actively participate in gambling. According to the most recent Minnesota Student Survey completed in 2019, 30 percent of middle school and high schoolers gambled in the last year, seven percent gambled frequently (more than once a week) and half of one percent (2,000 students in Minnesota) indicated signs of gambling disorder.

In addition to anecdotal and empirical evidence of the dangers of youth gambling, there’s also a physiological explanation. Recent advancements in brain development research indicate that the frontal lobe — the decision-making part of the brain — is not fully developed until age 25.

Thus, youth are less likely to make fully considered decisions about gambling and the risks that they take. This supports the reason why gambling is not allowed until the age of 18 in Minnesota and 21 in many other states.

Youth gambling is also a concern because the lines between “gaming” and “gambling” are becoming increasingly blurred. Problem gambling prevention efforts should really be addressing problem behavior with respect to “gaming” as much as gambling. Video games often have gambling-like features incorporated in them, and there are real opportunities to gamble using features within video games (e.g., skins, or in-game virtual decorative weapons/materials) that meet the definition of gambling in prize, chance and consideration.

There are many overlapping indicators for video gaming disorder and gambling disorder and there is increasing evidence that social casino gaming may cause increased gambling behavior in youth as well as eventual gambling problems. This contention is bolstered by information provided by the U.K. Gaming Commission, which reported that 31 percent of youth age 11 to 16 have paid or used in-game items to open loot boxes while three percent had bet with in-game items. Further, a study (Zendle & Cairns, 2018) also noted that the amount of money spent on loot boxes by those playing video games have been linked to severe gambling problems.

In Their Own Words – Tim’s Story

In Their Own Words – Tim’s Story

I had my first big win of $500 as a 7-year old at a church picnic in a small town in Minnesota. I was like a celebrity for a while after that. I chased that feeling for 34 years, becoming very competitive in sports, games, spelling bees and just about everything else.
I figured out I had a gambling problem in 1994 and went to a few meetings but didn’t take anything away from them at that time. That same year I went through outpatient treatment to help control my gambling. But I did not want to stop; I wanted to get back to the winning streaks I thought I had.

Over the next two years I had periods where I abstained from gambling to prove to myself and others that I had it under control. But I didn’t. In 1997, I stole $250 from my employer to cover gambling losses. By the middle of 1998, I was taking much larger sums, with the last theft being for $25,000. With each theft, I convinced myself it would be the last time I’d do it.

Every time our company had an audit, I would pray and pray that they wouldn’t pick one of the stolen checks I had cashed. I felt really bad about what I did, and the pressure to hide my gambling problem increased. I even worked on plans to have someone kill me, put me in the trunk of a car and abandon the car. I thought it would be better for my parents and others to see me murdered than to learn about my gambling problem and the illegal activities I had committed.

I white knuckled it and floundered around for a while, staying gambling free but still trying to “find recovery” on my own.

I was eventually caught, and was fired from my job on December 6, 1998 – yet that was not my bottom. I worked out a repayment agreement with my employer, but I reneged on it when I couldn’t make the payments because of my continued gambling. In February of 2000, I was charged with 24 federal felony counts of theft by swindle for the money I stole from my employer, a securities firm and a banking institution. I plead guilty to much lesser charges, served my time and am still making restitution payments.

My last day of gambling was two days before I entered inpatient treatment on September 20, 2000. I white knuckled it and floundered around for a while, staying gambling-free but still trying to “find recovery” on my own. I believed that I was not worthy of God’s or any other higher power’s help or caring.

On November 7, 2001, I was involved in serious accident that changed my outlook on recovery and life in just a few seconds. My SUV was demolished after rolling over three and a half times. I was pulled from the wreckage by a good Samaritan. I walked away from the accident with very minor injuries because I heard from within the car that I needed to lay down. There was no one else in the car with me, but I listened to that voice and laid down on the front seat, seat belt still intact. The roof of the car was crushed down to the steering wheel. Had I not laid down, I would have most likely been killed or paralyzed.

I knew then that I did have faith in God. If I didn’t or had hesitated about lying down, I may not have survived. I began to live a different life the next day, one where I am involved in GA, the conference and the fellowship that GA has to offer. I am alive today because of the choices I have made in recovery. Some choices have been made without hesitation while other choices have taken longer – like asking for help during sad times.

I have a few friends from before recovery who tried to help, but I wasn’t ready to accept help. They still stood by me in courtrooms and then a treatment center, having accepted my addiction without necessarily understanding its affect on me. The hundreds of friends I have met through recovery do understand the effects my addiction has on me. I have been willing to accept their help and they in turn are willing to help me.

What a different life I am experiencing thanks to my higher power, my friends and my choices.

In Their Own Words — Cal’s Story

In Their Own Words — Cal’s Story

My nearly 50-year relationship with gambling started when I was six years old. My father, an illegal sports bettor, introduced me to gambling and would take me to sporting events everywhere he placed bets. I remember that he would split his winnings with me on baseball bets because I knew the sport better than him.

This continued until about age 17 when my mother — and best friend — died suddenly. The trauma from that started a period of depression that changed my relationship with my father.

The situation with my father caused me to move out of the house at a time when I really wasn’t prepared for life. I worked six days a week and went to school five days a week. To break up the monotony, I went to the local dog track. It was a great stress reliever and provided some excitement from the pain of my day-to-day life.

That started an off-and-on cycle of gambling that would last until four years ago. I went from dog racing to horse racing to the lottery (casinos wouldn’t come until the mid 90s). I took my first trip to Las Vegas around that time and that changed everything for me.

My gambling became more aggressive and I started spending money from paychecks that should have gone to bills. I started borrowing on credit cards, maxed them out, and then stole from my employer to gamble. That led to charges, and I eventually ended up spending three years in prison.

You might think that spending three years in incarceration would have changed everything for me and that I’d value the opportunity to start anew. And I did — at least for several years. But about four years after my release from prison in December 2003, I went to Las Vegas again and binge gambled for an entire week. Things continued to spiral down from there.

By 2008, I knew I had a problem and sought help. That’s really when my recovery should have started.

Unfortunately, the agency where I sought help did not have a certified gambling counselor. And although I poured out my heart and soul, the counselor diagnosed me with depression. At the end of my intake session, I’ll never forget what she said: “You have to admit that you’ve brought all this upon yourself.” Needless to say, I didn’t feel I was provided with the support and help I needed and, despite my heartfelt intentions and desire to get help for my gambling addiction, I didn’t have success.

In 2012, I went on another Vegas binge, but this was worse. I came home feeling humiliated, frustrated and broken. I’d spent all this time on counseling and had nothing to show for it.

Finally, in 2016, after my worst binge of all, I’d had enough. I told my wife I needed to gain control of myself or I’d kill myself.

I looked online for inpatient treatment options and ultimately landed on Project Turnabout. I sensed an immediate understanding on their part. I knew they could give me my life back and rebuild me from the inside out. I learned so much.
Ultimately, my experience in residential gambling treatment motivated me not just to embark on my own recovery, but also to help others as much as I can and to take a leadership role. I have since become a strong advocate for problem gamblers by sharing my experience with as many people as possible.

I sometimes think about the experience I had in 2008, when the counselor I saw was ill equipped to help me and only added to the stigma that I had failed. Had that counselor better understood problem gambling, I believe I could have started my recovery eight years earlier. But I believe that everything happens for a reason, and that that experience helped me to become the advocate I am today.

Loot Boxes: What Are They and What Safeguards are Needed?

A feature that has become part of the majority of popular video games threatens to become a gateway to problem gambling according to many experts in the field.

Loot boxes are consumable virtual items in video games that can be redeemed to receive a randomized selection of further virtual items, or loot, ranging from simple customization options for a player’s avatar or character, to game-changing equipment such as weapons and armor.

Loot boxes are extremely profitable for video game companies. Payments are made through micro-transactions that may involve box purchases of 99 cents. However, repeated purchases of loot boxes can quickly escalate into thousands of dollars of purchases over time.

Similarity to Gambling

The issue is whether the features of loot boxes are similar to those of slot machines or other forms of gambling. Recently, Keith White, executive director of the National Council on Problem Gambling, issued a statement to the U.S. Federal Trade Commission summarizing NCPG’s perspective.

“Players who pay to play a slot machine or unlock a loot box are risking that money for the chance of winning a prize or reward that is of value to them,” Keith says in the statement. “Factors common to many loot boxes and slot machines include random distribution of prizes, variable value of the prizes, near-miss features, and visual and sound cues associated with participation and reward. These feature are well known to trigger urges to play along with increase excitement and faster play.”

Research Shows Cause for Concern

While research on loot boxes and gambling problems is in its infancy, early reports show reason for concern, concluding that paying for loot boxes is linked to problem gambling. This includes behavioral patterns that damage personal, family or vocational pursuits, and can result in increasing preoccupation with gambling, a need to bet more money more frequently, and restlessness or irritability when attempting to stop. The behavior also included “chasing” losses and the inability to stop despite negative consequences.

An early large study of more than 7,000 gamers found evidence of a link between the amount that gamers spent on loot boxes and the severity of their gambling problems. Further, Mark Griffiths, Ph.D., prominent gambling researcher, has stated that loot boxes meet “almost any definition of gambling currently used in the field of social sciences.”

NCPG’s Recommendations

The NCPG believes a precautionary approach is appropriate for loot boxes given the potential negative impacts on youth. It recommends a multi-layered approach to users, parents and communities to ensure an appropriate range of protections is put into place for youth and other vulnerable populations. The goal is for measures to:

  1. Better inform consumers. Some of the possible tactics include facilitating informed choice (i.e., disclosing the number and value of items in loot boxes and the frequency of distribution), developing youth-specific addiction messaging, providing addiction rates among users paying for loot boxes, and prohibiting ads targeting youth.
  2. Prevent gambling-related problems. Some of the strategies NCPG calls for in this area include encouraging parents to enable parental controls, allowing players to set limits on time and money spent, developing third party consumer protection to verify compliance by designers and game companies, and funding media literacy campaigns dedicated to vulnerable populations on loot boxes and other in-game gambling-like mechanisms and advertising.
  3. Facilitate treatment seeking and support recovery. This includes providing links to NCPG’s upcoming ResponsiblePlay.org website (a resource for children and adults concerned with the negative consequences of online gaming behavior) and allowing for self exclusion through payment providers and global lists.
  4. Increase the evidence base. This involves requiring companies that include loot boxes in their games to provide access to anonymous player data (which can be used to develop gaming behavior profiles) and calling for NIH Institutes, particularly NICHD (National Institute of Child Health and Human Development), NIMH (National Institute of Mental Health) and NIDA (National Institute on Drug Abuse), and CDC (Centers for Disease Controland Prevention) to commission intra- and extra-mural research into loot boxes.

The NCPG emphasizes that while regulation is important, maximum effectiveness will be reached when accompanied by prevention, education, treatment, and recovery and research services. NCPG’s statement on loot boxes can be found here.

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