Loot boxes, virtual loot boxes in video games, have attracted considerable attention in recent years. They offer players randomly generated virtual items that can range from purely cosmetic changes to game-changing advantages. The legal assessment of loot boxes is complex and concerns both gambling law and the protection of minors and consumers. This article provides a brief overview for providers and users.
1. what are loot boxes and why are they controversial?
Loot boxes are digital boxes whose contents are unknown before purchase. They are often purchased for real money or in-game currencies. The content can vary considerably in value or usefulness for the game. This random mechanic has parallels to games of chance and raises questions about its legal classification. The risk that loot boxes encourage excessive gaming or pose a risk of addiction, especially for minors, is particularly criticized.
2. loot boxes in gambling law
a) Definition of gambling
According to Section 3 (1) of the Interstate Treaty on Gambling (GlüStV), a game of chance exists if the player pays a stake to acquire a chance of winning and the decision to win or lose depends predominantly on chance. This definition also applies to criminal law (Section 284 StGB).
Loot boxes fulfill the element of chance, as the player does not know the contents of the boxes before purchasing them. The question of whether the contents of the loot boxes are to be regarded as valuable prizes remains problematic. As a rule, these items have no real monetary value, as their use is usually limited to the virtual gaming world. However, considerable trading volumes often arise on unofficial secondary markets, which can make this assessment more difficult.
b) Stake
Another criterion for qualifying as gambling is the stake of a not insignificant asset. Courts have ruled that a loss of less than 10 euros per hour does not constitute a significant stake.
c) Profit or loss
Loot boxes differ from classic games of chance, as they usually always deliver an item, even if it does not meet the player’s expectations. This mechanic is reminiscent of surprise eggs or trading cards, which are not legally classified as games of chance.
d) Conclusion on gambling law
Due to the complex design of loot boxes, a general classification as gambling is not possible. The legal assessment requires a case-by-case examination, particularly with regard to the asset value of the content and the player’s stake.
3. youth and consumer protection
a) Aspects of youth protection law
The German Youth Protection Act (JuSchG) was reformed in 2021 to better address the specific risks of loot boxes. According to Section 10b JuSchG, mechanisms such as random-based rewards or excessive media use are included in the age rating of games. Since 2023, so-called descriptors have explicitly referred to loot boxes, which can lead to a higher age rating.
In addition, the Interstate Treaty on the Protection of Minors in the Media (JMStV) prohibits advertising that directly appeals to children to buy or exploits their inexperience. Providers of loot boxes must ensure that purchase processes can be controlled by technical protective measures, such as parental control systems or spending limits.
b) Consumer protection
The Unfair Competition Act (UWG) offers further protection mechanisms against misleading or aggressive practices. For example, providers may not state false probabilities for rare items or advertise misleading special promotions. EU consumer protection regulations, such as the Digital Services Act (DSA), also set clear limits against manipulative business models.
4. regulatory approaches and legal policy debate
Germany has so far refrained from specifically regulating loot boxes. Many experts consider the existing legal framework to be sufficient. Nevertheless, there are initiatives, for example from WestLotto, which are calling for stricter regulation. These proposals include deposit limits, transparency obligations and advertising restrictions.
At European level, Parliament is calling for harmonized regulation to prevent market fragmentation and effectively protect players. A coordinated approach could regulate cross-border trade in virtual goods in particular.
Conclusion
Loot boxes pose considerable challenges for providers and legislators. While the mechanics have parallels to games of chance, there is often no clear asset value or loss in the legal sense. However, the existing legal framework already offers far-reaching protection mechanisms, especially for minors. Providers must ensure that their offers comply with the requirements of youth protection and consumer law. Players should be aware that, although loot boxes are not always legally classified as gambling, they can still pose financial and social risks.
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