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French gambling regulator concerned by loot boxes, but won't take legal action

French gambling regulator concerned by loot boxes, but won't take legal action

July 5, 2018 | By Chris Kerr

French gambling regulator Autorité de regulation des jeux en ligne (ARJEL) has criticized loot boxes in a new report, though the organization stopped short of taking concrete legal action. 

ARJEL is the latest European regulator to assess the controversial monetization model, with others in Belgium and The Netherlands deeming the practice unlawful after concluding their own investigations. 

Unlike its counterparts, however, the ARJEL has decided against legal action. Writing in the report, handily dissected by media law associate Sebastian Schwiddessen, the ARJEL explained that the requirements for gambling in France are essentially the same same as in most jurisdictions in that it generally involves a stake, a chance, and a prize. 

The regulator then states that loot boxes undermine the current public policy on gambling because they're accessible to minors, aren't transparent, and could even give rise to "habits and reflexes" that may introduce children to other forms of gambling. 

So far, the report seems relatively in line with those published elsewhere, with the ARJEL also suggesting loot boxes share many similarities with slot machines, partly because they give players a feeling of having just missed out of the prize they really wanted. 

It also states that loot boxes might be considered gambling if the prizes within can be sold for real-world cash, and particularly if off-platform item trading is permitted by publishers 

Again, these are sentiments we've heard before, but while that was enough for regulators in other regions to declare certain forms of loot boxes illegal, the ARJEL has instead decided to vote for a more "combined and coordinated" analysis. 

The group believes European financial regulators will be able to provide a more coherent assessment of microtransactions in games, and has suggested national gambling policies should share the common goal of preventing the dangers that might arise from loot box practices. 

In terms of practical action, the regulator suggests making consumers more away of the dangers of microstransactions, "both in terms of the integrity of the gambling offer and in terms of addiction," and alerting parents to the risks loot boxes might pose to minors. 

As Schwiddessen notes, though, those comments could "easily be filed under non-committal regulatory statements," and the law associate doubts they'll do much to curb the usage of loot boxes and other microtransactions in France. 

"While the comments by the ARJEL are very critical and certainly no good press, they are also non-committal and unspecific," he wrote, in his Linkedin post.

"Altogether it is unlikely that any concrete actions will follow. Any enforcement action under French gambling law is therefore unlikely, and it looks like the strict Belgian and Dutch decisions will remain an exemption of two very small markets."

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