Published: December 12, 2022

From loot boxes to gambling addiction: experts warn video games open door to betting

Video games in which players spend money on in-built games of chance can be a gateway to gambling because they acclimatise young people to habitual use and erode their sense of caution, a coalition of experts in screen addiction has warned.

The Australian Gaming and Screens Alliance also warned that Australia was lagging in addressing gaming addiction and parents struggled to help violent, withdrawn teens whose obsession was leading to serious physical and psychological issues.

Alliance chair Professor John Saunders said gaming-related gambling ranged from monetised loot boxes – an in-game lucky dip – to betting on multiplayer online tournaments known as esports.

“There is evidence emerging that these monetised forms of video games represent an entry into online gambling,” Saunders said.

“Young people spend an increasing amount of money on loot boxes, and they can run into financial problems. Parents suddenly find that a thousand dollars from their credit card has disappeared. Some spend $10,000 to $20,000 a year.”

The alliance’s submission to the federal government’s online gambling inquiry said most of the community was unaware of the way gambling was increasingly prevalent in online gaming.

“Unless urgent action is taken to curb this increase in this form of gambling, AGASA considers that a generation of young people will be acculturated into considering gambling within online games an unremarkable, indeed desirable experience, without appreciating its negative consequences and the need for caution,” it said.

The evidence includes a literature review published this year which looked at 19 studies. It identified links between loot boxes and problem gambling, and recommended that purchasing loot boxes be classified as a form of gambling.

Loot boxes are virtual containers that, when opened in a game, give the user items such as weapons or powers. Occasionally, they are valuable, usually they are useless; the player finds out when they are opened. In some games, players can pay for loot boxes.

Real-world markets have developed around some games like Counter-Strike, where items won from loot boxes can be sold for hundreds of dollars to, in rare cases, hundreds of thousands of dollars.

However, in another submission to the inquiry, the Interactive Games and Entertainment Association argued that loot boxes were mostly about prizes, while gambling involved money. Only Belgium has regulated them as gambling, and that restriction has been criticised for being ineffective.

Local and overseas game developers had increased guidance for consumers around loot boxes, and improved transparency around “the probabilities of items obtainable via loot boxes,” it said.

“We would like to highlight the serious and existential risk that an inclusion of loot boxes as a ‘gambling service’ under the IGA would have on the local Australian game development industry,” which the association said had doubled in size over the past five years.

The alliance’s main mission is to lobby governments for more services to help people addicted to gaming, citing the new gaming addiction clinic at Fiona Stanley Hospital in Perth as a model for other states.

It also pointed to comments from a Victorian coroner in October, who said the death of a 13-year-old boy, who killed himself after being banned from gaming by his parents, highlighted the lack of resources for identifying and treating the disorder.

About 3 per cent of teens showed symptoms consistent with internet gaming disorder. “They’re not able to function, they’re not able to live to their full potential,” said Kim Le, a child psychologist and board member of the alliance.

“Video games are designed to be a lot of fun, but I see a lot of miserable kids.”

Saunders said the health issues range from loss of muscle and bone density due to prolonged sitting to complete withdrawal from society. Many adults were also gaming at levels that severely affected their ability to function in the community.

“Very often they almost become the disappeareds,” he said. When he asked one 25-year-old how much time he spent gaming, the young man said, “every waking moment. This young man … had never been on a date.”

Saunders said there were gaming addiction clinics across Asia. “I look around Australia and what do I see?” he said. “Piecemeal services, mostly by people who are in the private sector.”

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