loot box gambling – a lottery?
The Swedish Consumer Agency’s (Konsumentverket) report suggests there may be problems with the business model for loot boxes in relation to children and vulnerable consumers. Subsequently, the Swedish Ministry of Finance has referred the Swedish Consumer Agency’s report on loot boxes to a legislative committee (Spelmarknadsutredningen). This agency claims that if the winnings in a loot box can be turned into cash, it is a lottery, covered by the Gaming Act.
The Ministry of Finance said the government’s Gambling Act Inquiry will
"consider the recommendations" of the Consumer Agency, but there is a growing belief among those in Sweden that the government will take some form of action against loot boxes.
"We need to ensure that consumers have adequate protection. The fact that computer and video games are of great interest to children and young people makes the issue extra important," said social security minister Ardalan Shekarabi, the MP responsible for gambling in Sweden.
However, when it comes to legal realities of the law, a Stockholm-based international lawyer pointed to several tricky technicalities that may stall any attempt to classify loot boxes as a kind of lottery.
"The problem here is how the state will define the [Consumer Agency’s] statement that 'if the winnings in a loot box can be converted into money, it is a lottery that is covered by the Gaming Act'," explained Ola Wiklund, founder of Wiklund Law.
"There are also strong arguments to support the view that the existing law doesn’t apply to loot boxes," said Wiklund.
"Firstly, the games are not provided for a geographically determined group of consumers. Secondly, the lottery definition doesn’t really apply to loot boxes without an amendment, since the money conversion is of a different nature compared to a traditional lottery."
"In short, to regard loot boxes as falling under the law will amount to a regulatory overreach that is unlikely to stand in a court of law," he said. However, Wiklund noted that, in the end, political reality may win out.
Read the article Loot Boxes and Domestic Gaming Laws – Regulatory Overreach, published on GamblingComplience, 29 October 2019