Crash and Loot games are a new form of online gambling entertainment that enjoys strong popularity in different markets across the globe. The games offer multipliers, making them more engaging and thrilling, which helps attract a wide range of players. The players of Loot and Crash games are granted a choice to either multiply their prize or cash out each round as they play against a randomized clock.

Last year, Portugal’s gambling regulator, Serviço de Regulação Inspeção de Jogos (SRIJ), hinted at plans to regulate Crash and Loot games. This regulation became a fact after earlier this year, the government implemented changes to the country’s main law for gambling. The change was implemented back in March this year and now, the SRIJ released instructions that are applicable for Crash and Loot game providers.

Strict Regulation on Crash and Loot Games

Under the new regulations Crash and Loot games suppliers are required to send daily reports for such activities. The rules demand providers of the games to ensure a return to player rate that is a minimum of 80% or more. Moreover, Crash and Loot games must offer multipliers between 1x and 100x.

As a part of the changes, operators need to contact SRIJ and provide daily reports for the activities of Crash and Loot games revealing details regarding the total number of bets, pay-outs, bonuses, earnings and more. “The Instructions are intended to define a set of procedures that make it possible to standardize the information that operating entities must report, which is necessary to control the activity of operating online gambling and betting,” explained the Portuguese gambling regulator in a statement.

Unlike poker or other forms of online gambling activities, Crash games enable the users to cash out at any point during their game. The mechanics of the game put the players against a clock and with time passing, they can secure a bigger prize. If the players fail to collect their prize in time, the round crashes, resulting in a loss for the player’s wager. With that in mind, if the player is lucky enough, they can collect a prize that can be up to 100x their wager.

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Loot boxes are a part of many popular modern video games. The feature offers an activity that is similar to a game of chance where players can open, unlock or break a loot box and receive a random prize. Australia is the latest country to implement changes related to loot boxes as a part of important regulations that are set to come into effect next September.

Michelle Rowland, Australia’s Minister for Communications, revealed that the Albanese government remains committed to reducing gambling harm and this includes restricting access to games with gambling-like elements by children. She confirmed that a proposal calling for a mandatory minimum classification for gambling-like content as a part of video games was recently greenlighted.

As a part of the changes, which are going to come into effect as of September 2024, games that contain simulated gambling, including social casino games, would receive an R18+ restricted classification. This classification means that users under the age of 18 would not be able to legally access such content. Moreover, the R18+ classification means that such products are not suitable for children.

In addition, the changes will implement an M-mature advisory classification for games that have payable features such as loot boxes and other in-game purchases. While the measure is advisory and not restrictive, it means that legal guardians and parents would be able to know that such products are associated with risks they need to consider before letting their children play. While the change will come into effect next September, it would not apply retrospectively.

Changes Seek to Protect Children from Gambling Harm and Addiction

According to Rowland, the changes to video game classification come after a three-week public consultation that was completed earlier this year. In May 2020, the Neville Stevens Review recommended such classification to the former government in Australia. Now, Rowland said, the Albanese government is taking appropriate action, following the recommendation in an effort to protect children from harms related to gambling-like content.

“We know there is a growing community concern about children being exposed to gambling-like features in games.“

Michelle Rowland, Minister for Communications in Australia

The Minister for Communications acknowledged that video games expose children to features similar to gambling, which raises concerns about harm and addiction. A link between games with gambling-like features and problem gambling and other forms of harm was found in research by the Australian Institute of Family Studies. According to Rowland, the changes seek to help Australians make informed decisions about the content that is suitable for their children.

Australia isn’t the only country to impose regulations for loot boxes. This summer, the government in the UK urged the gaming sector to implement strict guidelines in order to protect the players. Overall, the Department for Culture, Media and Sport published and developed 11 different principles related to loot boxes.

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The UK’s Department for Culture, Media and Sport (DCMS) has released an update on industry-led measures to enhance player protections in relation to loot boxes in video games. Following the recommendations from DCMS, the industry trade body UK Interactive Entertainment (Ukie) has developed and published 11 principles on loot boxes. 

UK Government Calls for Improved Safeguards as Concerns Grow Over Loot Boxes in Video Games

While loot boxes are not explicitly classified as gambling products, concerns have been raised about the potential risk of harm they pose, particularly to young people. 

The new industry guidance focuses on several key principles. It emphasizes the importance of technological controls to restrict the acquisition of loot boxes by individuals under the age of 18 without parental consent. The guidance also calls for improved age assurance technologies and a commitment to refund policies to mitigate financial harms associated with loot boxes. Furthermore, it emphasizes the need for clear probability disclosures to inform players about the likelihood of receiving specific items or categories of items in loot boxes.

The guidance also highlights the significance of supporting the Video Games Research Framework, which facilitates data-driven research on video games. Additionally, the guidance addresses the unauthorized external sale of items acquired from loot boxes for real money, advocating for IP protection measures to combat such sales.

Other counties such as Australia and the Netherlands have also cracked down on the use of loot boxes in video games.

£1M Campaign to Educate Parents on Game Guidelines Featuring Judi Love

To raise awareness and educate players and parents about these guidelines, a £1 million ($1.3 million) public information campaign will be launched, featuring broadcaster Judi Love. This campaign aims to guide parents on the use of parental controls to manage in-game purchases, screen time, online interactions, and access to age-appropriate content.

The DCMS expects the games industry, coordinated by Ukie, to fully implement the guidance and report back on its implementation progress. The government will monitor the effectiveness of the guidance over a 12-month period and assess its impact on player protection. 

While some stakeholders may advocate for legislative intervention, the government believes that an industry-led approach is currently more suitable, given the dynamic nature of loot boxes and in-game purchases. 

At the same time, new research has indicated a link between spending on loot boxes in video games and symptoms of problem gambling. The study focused on 400 regular gamers aged 18-24 and found that higher spending on loot boxes correlated with a higher likelihood of engaging in gambling behavior. Other research has also suggested a similar link between gambling addiction and loot boxes.

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According to Lure Clark, director of UBC’s Center of Gambling Research, there is some evidence to suggest that loot boxes and problem gambling have a link and are somehow related. Previous research in places such as the United Kingdom and Australia has claimed similar findings, although researchers stopped short of categorizing loot boxes themselves as a form of gambling. It wasn’t for a lack of trying.

What Clark Found Out about Loot Boxes in Video Games

Clark presented his findings at the BC Lottery Corporation’s New Horizons in Responsible Gambling conference held on Tuesday and spoke about what these digital assets were and how they got popular. Clark mostly said that loot boxes originated in games such as Electronic Arts’ FIFA and Valve’s Dota 2 and Counter-Strike: Global Offensive games.  

The digital containers offered a hidden prize that was generated randomly, although each container these days displays the percentage of a given type of item dropping from it – that was also changed from previously not displaying any percentages at all due to regulatory pressure in markets where loot boxes are available.

Speaking to Global News, the outlet that did the original reporting, Clark noted that other jurisdictions around the globe are also tussling with the issue of loot boxes and how to approach them. He said:

Researchers have seen this link in past research, a correlation between higher levels of spending on loot boxes and higher symptoms of problem gambling, but until now we haven’t really understood the cause and effect behind that relationship.

UBC’s Center of Gambling Research director Luke Clark

His research focused on 400 regular gamers aged 18-24. These gamers were not gamblers per se, but Clark wanted to see if their interaction with loot boxes would push them into gambling. According to the researcher, who set up a follow-up period of six months, people who were spending more on loot boxes were also more likely to end up gambling as well, Clark concluded.

Links Established Between Excessive Spending and Gambling

“We can see that clear migration effect, the people who are spending more on loot boxes are more likely to initiate gambling over that follow up period,” the researcher noted in his observation. The video gaming ecosystem has proven a particularly treacherous conduit of gambling as well.

UBC graduate student Raymond Wu who also examines the link between gambling and gaming said that streaming platforms such as Twitch were still dominated by gambling content even though the Amazon-owned platform undertook some measures to curb the proliferation of these measures.

This is dangerous, explained Wu, who said that people could simply end up being “triggered” by watching others gambling. Self-exclusion programs do not include Twitch streams. Meanwhile, an Austrian court has ordered Sony to pay back consumers over FUT transactions.

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