Click image for larger version  Name:	Loot Boxes.jpg Views:	626 Size:	39.0 KB ID:	3507110

Loot boxes have become the centre of controversy ever since they began appearing as a standard feature in many video games. They have been equated with what is on offer at casinos – provides an excellent guide to the online gambling market in Canada and what is available – because they share characteristics of providing virtual games of chances, where the odds are stacked against the player in favour of the house. And they also appeal to the same psychological need for reward as casino gambling.

However, proponents of loot boxes insist there is one major difference – whilst you can risk losing everything in casino gambling, a player is guaranteed to get something out of a video game loot box, even though they might have to buy several to get exactly what they want.

Loot boxes, which also go by various names like chests, card packs or crates, are consumable virtual items which can be redeemed for real money. In return a player will receive a random item, which can either be used to improve in-game performance or offer something that is merely cosmetic in value.

Some critics argue that they are just a way of extracting more money out of players. Having already shelled-out money to buy the game in the first place, they are then forced to keep spending more in order to get the latest accessories, or to keep up with their friends who are playing the same game as them.

And although manufacturers insist that loot boxes are just an option, they also know that they are appealing to FOMO (The Fear of Missing Out). Buying a loot box may give you a competitive edge in a video game, in the same way that players want better Pokémon cards.

Currently loot boxes are in an anomalous position legally, with the UK Gambling Commission arguing that they do not constitute gambling, because the items that players get after opening them cannot be exchanged for real money – even if real money is used to buy them in the first place.

This provides video game manufacturers with a loophole and means that they are not subject to the same government regulation and oversight as casinos. And because crates always provide the player with something, then it does not match the description of gambling in the strict sense of the word.

At the same time though, for all intents and purposes there is not much difference between buying a loot box and feeding a slot machine as there is still a large element of randomness about the outcome.

Slot machines typically have a payback percentage of between 91% and 94%, which will be programmed by the operator using a random number generator (RNG). That means that a player is guaranteed most times to get something back, just enough to keep them playing. At the same time, only rarely will they hit the jackpot, so they will gradually accumulate losses.

A loot box might have a 100% payback rate, but the use of RNGs might mean that whilst the first time you box a box you will get what you want, next time it might take you until the sixth or even the tenth attempt to acquire that much-desired accessory.

Loot boxes might not meet the legal definition of gambling, but, to all intents and purpose, they constitute exactly that.