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Netherlands loot box ruling: Leading games violate gambling laws

As the debate around esports gambling rages across the globe, another nation has weighed in with a judgement that could have an impact on the wider world of betting on games.

According to a Dutch government ruling, video games violate Dutch gambling rules, and have “elements in them that can also be found in the gambling world”.

The decision was handed down by the Dutch Gaming Authority, and specifically relates to the phenomenon of loot boxes, in-game items that can be traded or sold. Crucially, players who buy the treasure boxes do not know in advance what object they will receive, although some nations have now mandated that the percentage chance of each reward is known at least prior to purchase.

According to reports in the Dutch media, and nos.nl in particular, the Dutch Gaming Authority investigated ten popular games that feature loot boxes, and four of the games had items that could be sold on for real currency via external trading portals.
Experts around the case have intimated those ten games would simply have been the most viewed ten on twitch, rather than any more complex overview of the esports scene, but this has not been confirmed by Luckbox.

Because the items can be traded for cash, they therefore have economic value, and as we all know there is a lucrative market for players that are lucky enough to get a rare item. As a result, they count as games of chance, and this brings them under the remit of the Gaming Authority with potentially wider ramifications.

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We caught up with Dutch esports journalist Tom Matthiesen to find out how he viewed the ruling, and what the impact could be for gamers in the Netherlands. His initial takeaway was that this move is aimed at protecting younger gamers first, given the obvious generation divide in esports and gaming generally. “Parents are often not involved with their kids' hobby if it isn't something they like too.

“So when you have a parent who plays video games, kids will be guided better in the online world and has a higher chance of understanding what's happening.

"Unfortunately, many parents today didn't grow up with video games the way their kids are growing up with them,” Matthiesen said, “and often they don't invest a lot to learn about their kids' hobby either. So kids have no guidance on video games, which is where trouble can begin.”

In his view, though, the responsibility also lies with parents themselves to take an active interest in the pastimes their children choose, rather than expecting game companies to cover every base for them.“I think parents need to be urged (by the governmental body overseeing games, kids' health etc) to guide their kids more in the world on video games.

"When the kid is creating an account for something, it's up to the parents to make sure things like age are filled in correctly. However, once someone is not an adult according to the filled in form, game developers need to lock away lootbox content and find another way of delivering the items to the player.”

Fundamentally, as with many such cases, Matthiesen believes it comes down to education and making sure parents have the right tools to protect their children. He said: “Let me be clear, it's parents' job to teach their kid the risks of loot boxes, and many parents don't invest much (if anything) when their kid likes video games.

"It doesn’t appeal to the parents, so they let kids 'play their kid games'. And that's what needs to change, mostly.”

Firms in violation of the new ruling could face fines up to €820,000, meaning there are very real consequences available should the authorities wish to implement them, but so far the reaction to this very recent news has been limited.

Across the continent, authorities have been looking into the phenomenon of loot boxes, as they become more of a factor in game firm profits, and this ruling is the latest in a string of decisions aimed at making the environment more safe and regulated for users.

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