Washington International Law Journal


Kevin Liu


The video game industry has expanded rapidly in recent years by implementing a microtransaction business model and expanding to a new market of mobile gaming. However, the introduction of loot boxes has been controversial; similar to gambling, gamers pay real money for a randomized microtransaction for a chance to win a random virtual prize of perceived value. Additionally, the items won from these loot boxes, such as cosmetic skins, can potentially be used to bet on other games of chance or even on the outcomes of competitive esports games. With the ease of online payments, the use of manipulative operant conditioning, and exploitive advertisements, young gamers are subject to gambling tendencies. However, there is a global split between whether loot boxes fit under the definition of gambling. Countries around the world have responded in four different ways: (1) outright banning loot boxes; (2) regulating loot boxes in various ways; (3) investigating loot boxes further; and (4) not recognizing loot boxes as gambling and taking no further action. This Comment seeks to challenge the global question of whether loot boxes are gambling and instead ask whether loot boxes are inducing the same effects of gambling on young children. Whether loot boxes fit under pre-existing gambling constructs, the effects on children are prevalent. Treading a fine line between its government paternalistic approach and respecting economic freedom, the United States should take steps to regulate loot boxes in a manner that will protect minors from the effects of gambling without crippling the video game industry.

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