Are game companies following the law on gambling (ones located in the US)

TheScavenger

As seen here: https://www.gamblingsites.com/online-gambling-jurisdictions/

An online company needs a license for gambling. I imagine Bethesda for example follows the laws and has a license for it in ESO with their loot boxes (which is a form of gambling). Many online MMOs are however made by smaller companies, and if they are in the US, if they have anything that could be similar to gambling (most common one is the RNG loot boxes found on their cash shop) they would need a license for that.

And this is a site that describes gambling

https://www.what-is-gambling.com/

Quote: "Gambling involves risking something of value on an uncertain event in hopes of winning something of greater value"

That means buying a loot box involves something of value (real money) in hopes of getting a better item or in other words, something of greater value within the loot box.

I see little in the way of MMO companies however abiding this law and having a license, as I can't find anywhere that says Bethesda has a license to gamble in their loot boxes. Maybe they don't make it publically known.

But it isn't just Bethesda that needs one. Any company with loot boxes or something that has a CHANCE of greater value than the money is worth needs a gambling license. There is no other way to describe loot boxes but gambling, as seen in the site I linked which describes the exact description of gambling which means also loot boxes. The company however can make the loot boxes WORSE and not worth paying for, because then it wouldn't be of "greater value".

Is there any place to see MMOs that have an appropriate gambling license? That is for US MMO companies only, as I am unsure of gambling laws outside of the US. So places in Europe/Asia or even Canada may not apply the same laws.

ConstantineMerus

Is there a possibility of lootboxes to be completely empty? 

If not, means anything inside of it values as the price tag. Anything extra, is a gift to lucky winners. That doesn't mean gambling, because you are not risking anything. You might argue they are over-priced. Well there are digital items worth more than half a million. 

Believe me, Zenimax has a solid legal department suing Facebook for millions. After the Black Friday incident all big companies legal departments did a solid review of their business. They are not doing anything wrong. 

BruceYee

So many games on Steam would be insta-screwed.

Asm0deus

I think they are getting around the laws with how the loot boxes are presented.  You do not buy the boxes but rather keys to open them AND you don't use real money but instead buy fake money which is then used to buy keys etc etc

The laws are still arse backwards when it comes to online gaming, you will note that sometimes sweepstakes, especially ones with physical prizes, have terms like only for USA or Canada except XYZ state or province but if it's digital goods, offered as prizes, often all is good.

Kyleran

Digital items have no actual cash value, unless you are talking crypto currencies,  hence there is no gambling involved. 

TheScavenger

Asm0deus said:

I think they are getting around the laws with how the loot boxes are presented.  You do not buy the boxes but rather keys to open them AND you don't use real money but instead buy fake money which is then used to buy keys etc etc

The laws are still arse backwards when it comes to online gaming, you will note that sometimes sweepstakes, especially ones with physical prizes, have terms like only for USA or Canada except XYZ state or province but if it's digital goods, offered as prizes, often all is good.

Ah, that must be it. I didn't think of that. For example, in ESO (and many other MMOs, but need a example so ESO it is lol)...you buy their cash shop currency and then do the loot box.

Seems like a bit of a loop hole though in the laws. Couldn't that loop hole be applied to anything to get around the gambling laws in the US? 

Vrika

TheScavenger said:

And this is a site that describes gambling

https://www.what-is-gambling.com/

Quote: "Gambling involves risking something of value on an uncertain event in hopes of winning something of greater value"

Your problem is applying normal definition of gambling to a legal situation. In legal situations words like "gambling"  are usually defined differently and usually more strictly.


For example by your definition a running competition would be gambling: A participant risks his participation fee, on the uncertain event that he would win the race, and get the winning price that's of greater value.

Asm0deus

Kyleran said:

Digital items have no actual cash value, unless you are talking crypto currencies,  hence there is no gambling involved. 

Pretty sure that's not 100% accurate, I am pretty sure anyone that creates and sells digital goods like software etc etc would disagree with you.



@ TheScavenger
Gambling laws in the USA have been tightened but they still need work.

Take this for example

When the North American Free Trade Agreement was concluded in 1994, floppy disks reigned supreme and the Internet was in its infancy. Today, the digital economy (driven by data, software, artificial intelligence, and analytics) spurs growth and jobs in every sector, especially in manufacturing, banking, hospitality, healthcare and education. Despite this enormous economic impact and increasing global competition, there is no trade agreement in place that has clear, strong, and enforceable rules on data. The decision to modernize NAFTA is the perfect opportunity to create rules that ensure the digital economy can thrive and grow across North America – rules that can be used in all trade agreements to come.

https://www.cnbc.com/2017/05/25/nafta-trade-deal-a-digital-makeover-commentary.html

At some point goverments and their laws are going to catch up with the wild wild west of the interwebs.

immodium

Vrika said:

TheScavenger said:

And this is a site that describes gambling

https://www.what-is-gambling.com/

Quote: "Gambling involves risking something of value on an uncertain event in hopes of winning something of greater value"

Your problem is applying normal definition of gambling to a legal situation. In legal situations words like "gambling"  are usually defined differently and usually more strictly.


For example by your definition a running competition would be gambling: A participant risks his participation fee, on the uncertain event that he would win the race, and get the winning price that's of greater value.

The bigger problem is that you're actually buying a product, not gambling. You've used your money to purchase a loot box.

Now if there was a chance of you not getting getting the loot box (not the contents you wanted, the actual loot box) when you handed your cash over, then it would be classed as gambling.

It's no different than the packs of random sticker book collectible cards you use to buy as a kid.

Lord.Bachus

Kyleran said:

Digital items have no actual cash value, unless you are talking crypto currencies,  hence there is no gambling involved. 

This..

Lets all realise that its a game... and just a game ... and nothing but a game..  
So wake up and realise there is nothing real to it..
Want to earn things with real vallue, put effort in the real world

Its just a game meant for you to have fun and excitement, mixing up games and reality is never a wise thing to do

Horusra

The legal definition of gambling in the US states the item must be currency or an item of value.  The legal US definition of value is that the item must be tradeable or usable to gain currency.  So are the items in loot boxes tradeable or can they be sold for cash.  If not it is not legally gambling.

LynxJSA

Gambling requires consideration, chance, and a prize. Consideration covers both the voluntary act of choosing to participate (as opposed to mandatory participation) and the ability to participate without paying. Most games have several ways that consideration is minimized or trivial.

One example is giving away nominal amounts of the game currency/keys for free through gameplay. In that light, they can position that as the primary method for accessing the chest/crate/gachapon, and the paid path as secondary.

Whatever the case, most major game devs have enough lawyers and enough experience with the legalities of gambling that you'd be hard pressed to find one that is crossing the line... legaly, that is. Ethically, it's muddier waters.  

Azaron_Nightblade

LynxJSA said:

Whatever the case, most major game devs have enough lawyers and enough experience with the legalities of gambling that you'd be hard pressed to find one that is crossing the line... legaly, that is. Ethically, it's muddier waters.  

Yeah, I'm pretty sure the first thing they do is cover their asses and make sure they are operating within the law. But ethically, yeah... they're pretty much targetting the same group of people that gambling does, and making bank from it.

Kyleran

Horusra said:

The legal definition of gambling in the US states the item must be currency or an item of value.  The legal US definition of value is that the item must be tradeable or usable to gain currency.  So are the items in loot boxes tradeable or can they be sold for cash.  If not it is not legally gambling.

I'd qualify it one step further,  can the items be legally sold for cash. While digital game items are often sold for cash, in most cases its breaking the companies TOS which normally prohibits such sales.

As others have pointed out, it seems in addition to the above companies are employing multiple ways to make sure these are classified as sales, using pseudo currencies and what not likely to cover themselves regardless of what country laws are applicable.

Here in the US gambling really only involves items with actual cash value, and so far as I know there hasn't been a court ruling yet stating an in game house or sword is an item of real value.  (Certainly software code itself has)

Kyleran

immodium said:

Vrika said:

TheScavenger said:

And this is a site that describes gambling

https://www.what-is-gambling.com/

Quote: "Gambling involves risking something of value on an uncertain event in hopes of winning something of greater value"

Your problem is applying normal definition of gambling to a legal situation. In legal situations words like "gambling"  are usually defined differently and usually more strictly.


For example by your definition a running competition would be gambling: A participant risks his participation fee, on the uncertain event that he would win the race, and get the winning price that's of greater value.

The bigger problem is that you're actually buying a product, not gambling. You've used your money to purchase a loot box.

Now if there was a chance of you not getting getting the loot box (not the contents you wanted, the actual loot box) when you handed your cash over, then it would be classed as gambling.

It's no different than the packs of random sticker book collectible cards you use to buy as a kid.

Great example. When Pokemon cards first were a thing my family spent quite a bit of money at first buying random card packs to try and get the cards they wanted. 

I even purchased several full unopened boxes which I had planned to hold to and sell as collectors items in the future. 

In either case it wasn't considered gambling as we always got cards with every purchase, just not a Charzard which my daughters were after.  

Ended up buying a couple of those for straight cash, $75 a piece, figured it was cheaper than them spending every cent on duplicate cards

Oh yeah, my investment purchase?  I was storing the boxes at my office to keep the children from finding them and someone, either co-worker or maintenance person stole them so they certainly made a profit.

Fortunately the girls outgrew that fad and my son missed the Magic phenomenon.

Gdemami

'I do not want to be responsibile for my own actions, please shift the responsibility onto others' topic seems to be popular these days...

Iselin

LynxJSA said:

One example is giving away nominal amounts of the game currency/keys for free through gameplay. In that light, they can position that as the primary method for accessing the chest/crate/gachapon, and the paid path as secondary.

They don't even need to go that far since they all use intermediary game currency. The cash transaction is buying the currency. You then have a variety of game-related activities you can use that game currency for including buying loot boxes.

In that context getting those loot boxes is no more the kind of gambling that legislation addresses than playing Gwent in the Witcher.

The morality is a whole different story but as long as you're not buying loot boxes directly with cash, it's not even remotely illegal gambling.

Renoaku

The problem (I Consider it gambling.)

However the Loop - Hole.

You pay real money for "Virtual Credits" or in game currency whatever that may be (Which has no value as usually defined in most EULA or TOS.)

You use in game credits to purchase a Loot - Box or (RNG Gacha) which gives a random prize each time you get something at random.

This is where it is legal to my knowledge because every time you get an item at random you might not like what you get but its similar to what you play those little vending machines children put quarters in and slide it to get out a random sticker irl or gum machine that drops a random color of ball.

Is it a Loop - Hole, IMO yes, and personally I wish Gambling Laws, were gone all together at a certian point.

There is one country that banned Gacha, I think it was Japan banned gacha, China has restrictions on it.

https://www.reddit.com/r/FFBraveExvius/comments/5h7ads/china_law_requires_display_percentages_for_chance/

https://en.wikipedia.org/wiki/Complete_gacha Japan its actually banned.

Also as currency has no "Real Money" since Bit Coin is not real Money, then I would assume gambling with bit coin is 100% Legitimate because it doesn't exist the same as certain online sites like "Casino" offer an option to play for free using "Fake Money or Currency" to play, since Bit Coin is not a real currency, or in cases of Digital Currency or points like in ESO has no value its therefore legal.

Bit Coin can be argued over though of being able to be exchanged for Real Money but that is a legal issue people have to take up with law, in the end there will always be underground gambling places even if its with pieces of Cotton Candy which represents a real currency, since someone told me before Currency is whatever form of payment a person chooses to accept it as meaning anything can be currency.

Also all Digital Currencies including "World OF Warcraft Gold" for example, ESO Gold or items have "Real Money Value" otherwise illegal sites would not sell this currency based at real money value although its a violation of TOS and likely gets you banned the point simply being that its easy to launder currency, items, gamble with real or fake currency and get items EVE online used to have casinos and gambling too until they put a stop to it.

VengeSunsoar

They may not be considered gambling according to that definition. In loot boxes you always get something just not the super rare piece you wanted.

FlyByKnight

The issue is that US laws in this regard are archaic and out dated. They haven't kept up with the technology.

Games like Archeage are blatantly selling virtual chips for people to gamble. They are rigging the gambling, not disclosing odds, AND upselling the gambling under the guise of normal gameplay. Oh yeah and MINORS! All this without any fair consumer protections that casinos have to abide by.

Contrary to what some misguided people might say it's not just about consumer self control it's about the regulation that is being dodged.

I'd also say gambling addiction/ludomania is serious and not something companies should freely be able to manipulate and take advantage of because "Murica".

blorpykins

Shroud of the Avatar has a RMT economy and even though they don't advertise a real money value on the price of gold coins in the player market, they track it and use it for game balance and drops.  Every month they have a raffle that awards rare land deeds to players.  You use gold coins to purchase tickets, no limit on how many tickets a person can buy, and then the drawing happens and you either win or lose.  I remember in the beginning, someone bought about 3000$ worth of tickets and won something like 70 land deeds; and then sold them all through the player market right there in the SotA forums for a fat profit.

My guess is Portalarium doesn't have a gambling license; but they do have no liability statement.

Forgefeu

I can answer easily since i've read something about this on "Path of Exile" forum a week ago. They consider that the box contain at least something worth of your purchase, anything more is a bonus. It work just the same for "Magic the Gathering" be it cards you want or not you payed for 15 randoms cards and you got it.

Wizardry

I said it a lot lately,the law is TOO SLOW and too slack on moving within gaming.
To answer the question most are not following law however when researching it many times in the past,i found that most law directly points at gambling casinos or online gambling sites outside of gaming.
So how old is the USA? Well then think it was only about 10 years ago they finally created law to stop the online gambling card sites and even after shutting most down,they have found a way around laws and are all back again.

It is not some new found secret,laws often appear to protect the corrupt...guilty.I am sure many people often ask the question..WHY all those loopholes in law,why are there ways they claim are to protect human rights but seem to do more harm than good?

Recently a man pleaded guilty of wrongful operation of a construction vehicle,he killed another worker.He got off free because of loopholes in the law.Sickening really,people are always told ,the safety laws and government will protect you from wrong doing,they LIE.Example i was reading a case where a construction Roofer was fined 14x putting his workers at risk,it took until the 15th time before he was given a fine and 3 days in jail.

I could write a novel on how many ways owners,people are getting around law,they KNOW they are breaking the law  and will often claim no wrong doing.The FTC for example who is SUPPOSE to get off their lazy ass and uphold the law often ask for MANY forms of PROOF,well here is a question why not get the hell off your ass and investigate,your not paid a large salary to sit on your ass behind a desk.

We live in still archaic sad times,often wrong is right and right is wrong,really sad.

Cleffy

There is no US law related to gambling. There are state by state laws. On top of this, games do not operate on real currency that can be exchanged for real money. As a result it is not subject to income restrictions related to gambling activities.

Wizardry

I think what people need to remember inside of gaming are those loopholes.Often stuff is worded in a way to detract from the true intent of gambling and make it appear as if the money spent is a license to play and you never actually own or truly purchase anything other than a temporary license.

Gambling boxes is an often talked about idea.I cannot remember the specifics off hand but yes there are loopholes to get around that as well.Often developers will use stat metrics to prove something that they KNOW is not true.Example Kings Isle and their game Wizard 101.They know full well the game is targeting MINORS but in able to lawfully operate the gambling,cash shop ideas they claim their game is targeting mostly adults which is bullshit.
You cannot knowingly target minors even though it might take an adult to actually complete the purchase.So using this example KI might  just say ...well looky here all our sales are to adults Credit cards,yeah well no shit Sherlock but they are still targeting minors.

This kind of shotty law and loopholes to get around law is what makes the better nations fall back to lower standards we expect from corrupt 3rd world countries.At least in some of those 3rd world countries,if someone breaks the law they might be severely punished,the "deterrent" is at least there.

waynejr2

It is  not gambling.  There are a lot of stupid people on the Internet.  They see the word value and thing they know what they are talking about.  Stop doing that.  It is about money.  So if you pay cash and get cash it is gambling.  However, and this will confuse the stupid people, if you win a in game item and you find a way to sell it for cash, it is not gambling.  Now, if you aren't reporting the money you are earning doing that it might be tax fraud....