The UK government’s decision to let tech companies self-regulate gambling-like loot boxes in video games has been called into question after some of the developers responsible for new industry guidelines broke their own rules.
In the past six months, the advertising regulator has upheld complaints against three companies involved in setting industry rules, including leading developer Electronic Arts (EA), for failing to disclose that their games contained loot boxes.
An expert who filed the complaints said he had found hundreds more examples of breaches, but had only submitted a handful to the Advertising Standards Authority (ASA) to highlight the problem.
Lootboxes are in-game features that allow players to pay with real money or virtual currency to open a digital envelope containing random prizes, such as an outfit or a weapon for a character.
Despite warnings from experts that loot boxes pose similar risks to gambling, the then Ministry of Digital, Culture, Media and Sport said in July 2022 that it would not follow other countries, such as Belgium, in choosing to regulate them as gambling products.
Nadine Dorries, then culture minister, warned that regulating loot boxes, which studies have shown to be linked to gambling-related harm, could have “unintended consequences”.
Instead, the government created and published a “technical working group,” which also included video game companies and technology companies a set of 11 principles about lootboxes in August 2023.
The guidelines include a requirement to make it clear when advertising games that they contain paid loot boxes.
The working group last met in June 2023. Since then, Leon Xiao, an expert on lootbox regulation and PhD fellow at the IT University of Copenhagen, said that hundreds of advertisements for games, with more than 90% of the advertisements he investigated, were incorrect. adhere to the group’s own disclosure rule.
The games were available for download through the online stores of Apple and Google, both of which are members of the industry’s lootbox working group. Some were advertised through social media platforms including Facebook, Instagram and TikTok.
The ASA accepted four complaints from Xiao about games made by EA, Hutch and Jagex, all of whom helped draft industry guidelines as members of the government’s working group.
The four games were F1 Clash and Rebel Racing, made by Hutch, EA’s Golf Clash, and RuneScape, from Jagex.
EA told the ASA that “human error” was to blame and that the error was not representative of wider compliance with the guidelines. Jagex said there was not enough space to provide full disclosure on its Facebook ad and that it had done so elsewhere. Hutch told the ASA it had misinterpreted the advertising guidelines and would update its advertising.
However, Xiao said these were far from isolated incidents: “I could have filed 268 separate complaints, but my resources were limited.”
He said his findings challenged “whether that (working) group can be relied upon to achieve its intended objectives of better protection of players and children”.
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“These members are supposed to be role models and not break the rules themselves,” he said.
Don Foster, chairman of the House of Lords Peers for Gambling Reform group, said: “It is abundantly clear that self-regulation is not working and the government must step in to properly regulate loot boxes and their marketing to protect children.”
A spokesperson for the Department for Culture, Media and Sport said the government had been “clear that video game companies must do more to protect children and adults from the harm associated with loot boxes”.
They said the government would monitor the impact of the sector guidelines and “scrutinize possible future legislative options”.
UK gaming trade body Ukie said its members hoped to implement their new guidelines by July 2024, to “improve protection for all players and underline the industry’s commitment to safe and responsible gaming”.
“These principles (…) are part of a long history of self-regulation within the video games industry and complement the robust tools and support players already have to play video games responsibly.”
EA said: “We have a long, recognized track record of compliance with loot box disclosures, and we quickly addressed the two isolated omissions caused by human error. We believe it is important that players can make informed decisions about our games before purchasing or downloading them, and we want to ensure that players and parents have the tools and information they need to make informed choices about safe and responsible gaming. ”
The Guardian approached Jagex and Hutch for comment.