5.5 In particular, it has been argued that even where loot boxes do not meet the legal definition of gambling, many loot boxes meet the five established psychological criteria for gambling, and as such, players may be at risk of developing gambling related harms.
5.6 Regulators, both in Australia and around the world, have considered whether loot boxes meet the legal definition of gambling, and have formulated a variety of responses to the issue. These responses have ranged from determining that loot boxes do not constitute gambling to determining that loot boxes contravene gambling regulation and the sale or provision of loot boxes is therefore prohibited. Other regulators have introduced the requirement that games must publish the odds associated with loot boxes, and others have introduced labelling requirements.
5.7 It is important to note that loot boxes are not a homogenous entity and many variations of the mechanism exist. In particular, there are a variety of ways in which loot boxes can be acquired including through game-play achievements and through direct purchase using real-world currency. Loot boxes can also differ according to whether the virtual items contained within can be monetised.
5.8 As such, definitive statements regarding the operation and effect of loot boxes in general are difficult. A range of stakeholders including regulatory agencies, and academics told the committee that loot boxes should be assessed on a case-by-case basis. However, there was broad consensus that where real-world currency is exchanged (that is, when loot boxes are purchased, where virtual items are bought and sold, or where both occur) loot boxes may most closely meet the definitions of gambling (both regulatory and psychological), and therefore a range of risks to players may exist