DCMS report demands verification improvements and loot box regulation

In a newly published report, The Department for Digital, Culture, Media & Sport Committee (DCMS) has stated in-game spending should be regulated by the UK’s Gambling Act.

DCMS described loot boxes (in-game purchases, often with random rewards) as “integral to major games companies’ revenues” and claim companies reveal “further evidence that they facilitated profits from problem gamblers.”

Chair of the DCMS Committee, Damian Collins, described social media platforms and online games makers as “locked in a relentless battle to capture ever more of people’s attention, time and money” and believes the time is now for government involvement.

He elaborated: “Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. 

“Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. 

“We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.”

The report delves into a range of issues surrounding both social media and the online gaming market including: sales of loot boxes, protection of players and age verification/restrictions. 

It also investigates how games companies operate across a range of social media platforms and other technologies and how business models have been developed to “maximise player engagement in a lucrative and growing global industry.”

In a parliamentary first, representatives of game developers such as Epic Games (Fortnite) and social media platforms like Snapchat and Instagram gave evidence on the design of their games and platforms.

“Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products,” continued Collins.

“Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It’s time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify vulnerable gamers.”

The report cites evidence that “gaming is several years behind gambling in relation to protecting the vulnerable.”

One member of the public reported their adult son had built up debts of more than £50,000 through spending on microtransactions in an online game, RuneScape. 

Jagex, the company behind it confirmed players “can potentially spend up to £1,000 a week or £5,000 a month” in the game.

The report continued to add online games that feature loot boxes should apply the existing ‘gambling’ content labelling, along with following the corresponding age limits. 

Collins concluded: “Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults.”

“Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi.”