Opinion: The game industry must face up to its gambling problem

“It’s not real, so we don’t need rules.” That response was a lie when it was about online harassment, and it’s a lie when discussing whether or not microtransactions in games are a form of gambling.

Chickens have a way of coming home to roost in the tech industry--and gaming hasn’t been immune to the lawless, “that’s tomorrow’s problem” mentality that leads to one ballooning crisis of irresponsibility after another. Instead of getting out in front of a predictable problem and putting guardrails around it, the industry tends to let things explode before admitting anything is even remotely wrong.

This was on my mind as I saw the latest debates about microtransactions and gambling swirl around. It’s all been discussed by popular gaming YouTubers like Jim Sterling and TotalBiscuit, as well as gaming journalists, the ESRB weighed in (with predictable cowardice), and it’s even been brought to the attention of the British government

That last bit should worry the industry. Its failure to self-regulate, to develop wide ranging ethical standards for the practice, will lead inevitably to the imposition of regulations from without. Gaming studios have, for the moment, been glorying in the grey area created by technological novelty, after all. Most people still don’t know or care what a “lootbox” is, much less regard its contents as in any way valuable.

The law agrees, for now. A recent Eurogamer article by Wesley Yin-Poole on gambling-esque microtransactions in FIFA 18 made clear at the start that:

The law says loot boxes are not gambling because the items obtained from them cannot be exchanged for real-life money. Here's the blurb, from the Gambling Commission:

"Where prizes are successfully restricted for use solely within the game, such in-game features would not be licensable gambling."

But reality will catch up to us. These in-game practices are, after all, in line with the letter of the law, but not their spirit. And even the former is getting a bit dodgy, as Yin-Poole notes, because a cottage industry has grown up around buying FUT Coins, FIFA 18’s currency. The coins can be acquired by using the in-game auction house to, say, rid yourself of a card/player you don’t like. 

This underground economy is hardly limited to FIFA 18. A recent scandal that was here and gone involved Counterstrike: Global Offensive (CS:GO) and two gaming YouTubers--Trevor Martin and Thomas Cassell--failing to disclose that they were the owners of CSGOLotto, which they promoted to their often young viewers. It is explicitly advertised as a gambling site. 

As Engadget explained:

The site run by the pair, CSGO Lotto, allowed players to bet gun "skins" from the game Counter-Strike: Global Offensive that alter the look, but not the function, of weapons. Such skins can essentially be used as gambling chips, since they can exchanged at Valve's Steam Marketplace for real cash, with Valve taking a 15 percent cut.

So, yes, the line between real currency and in-game items is already quite blurry. From a psychological standpoint, so far as dopamine hits and addictions are concerned, there is no material difference between this sort of behavior and going to a casino. I can’t credit Marin and Cassell with much in the way of honesty, but at least on CSGOLotto they make no bones about what’s happening. The only irony is that its name invokes legal, regulated gambling.

"Even if there were safeguards preventing the exchange of real money, or at least tightly regulating it, it doesn’t address the fundamental issue."

But I would go a step further and say that even if there were safeguards preventing the exchange of real money, or at least tightly regulating it, it doesn’t address the fundamental issue. When you open a lootbox in, say, Star Wars: The Old Republic, you don’t know what you’re going to get.

You can buy boxes in bulk (like, say, a wad of scratch cards) to increase your odds of getting the thing you want. You commit actual money to this. You feel the frisson of chance gnawing at you. When you get The Thing, be it a swishy lightsaber, a speeder, an exotic pet, or a rare outfit, you feel like you’ve won something tangible. It tickles you so much that you forgot you spent sixty dollars to get it.

The old standby excuse, “you don’t need any of this,” isn’t enough. This is a widespread practice for a reason. It generates money because it works. Simply saying “you don’t have to” is as much a non-sequitur here as it is at a casino. It misses the point. You’re deliberately enticing people, then they get on the treadmill, and it’s damned hard to get off. You’re spending money on a probabilistically uncertain outcome, specifically a reward that you value enough to spend on. It’s as real as winning a hundred bucks through your state, provincial, or national lottery.

While it’s far more ethical to show players what they’re buying and guarantee it to them upon purchase, there’s still questions to be asked about the unlimited spending potential inherent to these sorts of microtransactions as well. I recently wrote about Star Trek Online and found its microtransaction system to be intriguing, but also a bit eyewatering.

A pack of nine starships--one for each of the three factions and three specializations--can go for 90 to 120 dollars. There’s no cap on how much you can buy, no limit to what you can convince yourself you need. Twenty dollars for a replica of the Galaxy-class interior, four dollars for an exotic Tribble, 25 for a Tier 5 ship or 30 for Tier 6 (buy three at once and save twenty dollars! A ninety dollar value, yours for sixty! I could almost hear the Billy Mays voice).

As Jim Sterling recently observed while discussing the 60 USD price point of AAA games, that money now constitutes the cost of admission rather than the purchase of a complete experience. There is a “tall tail” of buying potential available to players now, where 60 dollars becomes 120 or 250 or 500 or even 1,000 over months of play because of everything being put in front of you in an online bazaar. 

Japan's game developers faced government regulation of in-game gambling after they refused to self-regulate. In 2012, the Consumer Affairs Agency outlawed virtual games of chance. Devs had to remove "complete gacha" systems from their games.

It may not be gambling per se, by even the most futurist of definitions, but it should raise serious ethical questions about what studios are trying to make players do, if this isn’t just a bit of shady hucksterism. Even if what players are buying has no value outside of the game, and exists only as 1s and 0s.


We come back to the bugbear of every ethical discussion about the virtual world, then. “It’s not real, so we don’t need rules.” It was a lie when it was about online harassment, and it’s a lie when discussing whether or not these microtransactions are a form of gambling. The terms of socializing are indeed different from that of the physical world, but it involves things that are real enough to the participants. The consequences of words and deeds in virtual worlds have always been real. This is no different.

At the end of his Eurogamer article, Yin-Poole notes that his nephew horrified his family by spending £300 on FIFA coins. He’s 11. A top comment on his article went one better:

I’m a primary school teacher. The incident with your nephew is not an outlier at all. I know of at least a half dozen incidents of similar scale over the past couple of years in our school. One went to €900 and had a very detrimental effect to the family involved.

The world’s governments aren’t tabling legislation yet. But we’re already at a crisis point. This is real. Maybe players don’t, technically, have to buy anything; but the industry needs to do something.

Katherine Cross is a Ph.D student in sociology who researches anti-social behavior online, and a gaming critic whose work has appeared in numerous publications.

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