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Washington Journal of Law, Technology & Arts

Abstract

Loot boxes are items in video games that contain randomized prizes that players can purchase with real-world money. In recent years, loot boxes have come under scrutiny because the relationship between behavior and the underlying mechanics of loot boxes are similar to that of addictive behaviors associated with real-world gambling. Many papers suggest solutions focused on industry changes without direct regulation. However, these papers neglect the enormous profit incentive to maintain a business practice which can have detrimental behavioral effects on children. The United States federal government must take example from a growing number of European countries and ban the sale of loot boxes to children.

Growing concern in the United States has been met with attempts to regulate loot boxes as gambling. However, the nature of loot boxes causes them to fall between the cracks in our present regulatory infrastructure, which is created through state gambling laws. Common law on what constitutes a prize typically requires that the item have transferrable value. Game developers restrict players from selling items gained through loot boxes, so this requirement usually cannot be met through state gambling laws or common law. This paper will examine the Federal Government’s ability to regulate loot boxes on a national level and propose model legislation.

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