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Loot boxes under increasing pressure in Swedish new gambling law
A loot box is a virtual item that can be redeemed for a random selection of virtual items. Loot boxes has become more popular with the development of free-to-play titles, like Overwatch or Fortnite.
The loot boxes can offer new content, game functionality, features and/or upgrades for a particular game. This is a kind of an in-game purchase.
The system of loot boxes is similar to using slot machines, because of the random element. Players are also able to spend large amounts of money on loot boxes. They are therefore increasingly considered as a form of gambling.
It is estimated that loot boxes will represent a $50 billion industry by the year 2022.
Loot box regulation in Europe
Loot boxes has become a focus of regulation. In 2017, the UK Gambling Commission published the paper: “Virtual currencies, eSports and social casino gaming“.
Loot boxes has also come under increasing attention as the Pan European Game Information (Pegi) are now set to include a new warning icon for in-game purchases:
Belgium, which has declared that loot boxes are a form of gambling, launched a criminal investigation against EA for their FIFA game’s randomised card pack loot boxes.
And at the 2018 Gambling Regulators European Forum 15 gambling regulators in the EU and the Washington State initiated a joint declaration to “address the risks created by the blurring of lines between gaming and gambling”.
Loot boxes in the US
The United States Federal Trade Commission (FTC) has agreed to begin investigating loot boxes.
Swedish regulation on loot boxes
Loot boxes might be considered being a lottery, which is subject to regulation in Sweden and therefore require a permit.
Since loot box content also can be sold for a value outside of the game, it would constitute gambling that is not approved by the government. Swedish gaming laws has previously only targeted Swedish actors.
The Swedish government was considering investigating loot boxes in February 2018, for a possible tougher regulation in 2019, which will soon enter into force.
The new gambling regulation in Sweden that is set to go into effect on January 1, 2019 will, however, change from only targeting behaviour from Swedish actors to encompass also foreign actors. That would enable the Swedish Gambling Authority to enforce the law also for loot boxes.
If you are concerned or have questions about the new regulation, DeLorean Advokat can help you navigate the issues. Please visit our DeLorean Gambling & Casino Legal Services Section.