ESA: Loot box proposal 'flawed and riddled with inaccuracies,' bill gains bipartisan support

Legal sources and the IGDA have called Senator Hawley's bill vague and overreaching, but deceptive language — and the WHO's recent classification of 'gaming disorder' — could sway politicians and the public in favor of loot box regulations.

Update (5/29/2019):

Dr. B has responded to GameDaily’s request for comment on the WHO’s classification of gaming disorder. As a mental health professional working in the gaming space, he’s done his research. His conclusion? “The short answer is that it’s too soon. We don’t know enough yet. As Take This pointed out ina piece we wrote this week,dozens of leading researchers have opposed this diagnosis for years. They criticized this diagnosis on the basis of not having enough research yet, vague symptoms, and reliance on an addiction model without consensus on the cause of problem behavior.”

Therein lies another problem: that the verbiage for “gaming disorder” is almost identical to that of “gambling disorder.” “There is research that points outsome major differences between games and gambling,” Dr. B told us. “One of the key differences being the motivations. Games in their purest form are motivated simply by fun. There’s generally no financial incentive to winning, though if someone wants to pay me to play Skyrim again, I’m open to negotiations. Financial gain, on the other hand, is intrinsic to gambling. Just from a common sense perspective, it strikes me as suspicious to assume they are the same, but we need to see what further research says.”

Like Black and Hoeg, Dr. B also thinks the WHO’s decision will affect both political and public perception of the loot box bill. “Protecting the vulnerable should always be a priority, but I fear that the premature inclusion of the gaming disorder diagnosis will legitimize well-meaning, poorly understood action from lawmakers fueled primarily by moral panic instead of science.”

As he puts it, “Even when people engage in problematic technology usage... there can be a lot of reasons why that have nothing to do with addiction.” As a result, the WHO’s hasty conclusion may actually end up harming the very people it’s trying to help, with the added side effect of swaying votes towards a loot box bill that’s vague and overreaching.

Original Story:

Loot boxes have been a hot topic in gaming for the last few years, and the conversation has gone beyond the gaming industry to reach lawmakers in various countries. Last year, Belgium ruled that loot boxes are equivalent to gambling and as such need to follow the appropriate regulations; several other European countries also moved to take action. The United States isn’t exempt from loot box panic, either: earlier this month, Missouri Senator Josh Hawley proposed a bill to keep pay-to-win mechanics away from children, which intertim IGDA executive director Lucien Parsons said “unfairly targets games” and uses overreaching language that’s too broad.

Despite backlash from those within the gaming industry, Republican Hawley officially introduced his bill late last week with bipartisan support from Democrats across the aisle. The “Protecting Children from Abusive Games” act prohibits “pay-to-win microtransactions and sales of loot boxes in minor-oriented games.”

On paper, keeping kids away from the gambling-esque mechanics of loot boxes doesn’t sound too bad. However, because of the bill’s language, it’s hard to define what makes something “minor-oriented.” In an email to GameDaily, attorney Richard Hoeg of The Hoeg Law Firm said, “Because some games might escape the prohibition that way, they’ve also included all games where a developer has ‘constructive knowledge’ that a user is under the age of 18… almost every developer/publisher could be deemed to have ‘constructive’—less than ‘actual’; based on evidence or understanding—knowledge that some user somewhere is under the age of 18.”

Technically, depending on how the bill is enforced, even M-rated games like Mortal Kombat could be affected by this bill to purportedly protect children. Echoing Parson’s comments earlier in May, Hoeg stated that the bill uses “overbroad definitions and a generalized failure to aim the proposed law at the bad actions they want to prevent.” Hoeg also discussed this topic in a video called “The Many (many) Problems with the Loot Box Bill,” so this is a topic with which he’s very familiar. One point brought up in the video: vague language and less-than-tech-savvy lawmakers can be a bad combination, so who is actually going to analyze things like “entertainment value” of a microtransaction?

“This would be determined by the FTC—if the bill went through as proposed,” Hoeg told us. “The FTC is given almost total authority in the bill to investigate and determine violations of the Act… even well-meaning enforcement has the capacity to cause significant reductions in development work (or increased spending on legal compliance measures).”

Ryan Black, a lawyer at Canadian firm McMillan, has gone so far as to say “the video game industry is under attack” from this legislation in a just-published white paper. Speaking with GameDaily, Black called Hawley’s bill “devastatingly broad in reach,” reiterating, “it directly attacks successful business models that have evolved as a result of the relative stagnant price in games.” The retail price of a AAA game ($59.99) has remained the same for almost 15 years in the United States, while free-to-play games have risen in frequency and popularity.

Black says it’s not surprising that a governing body would step in to regulate such a massive entertainment industry, even though games themselves have been hard to define (let’s not resurrect the “are games art?” debates of yore). “I think the games industry has lived a little bit in a perceived protective bubble, between politicians who think games are for kids, some court decisions that protect them from regulation as art—like movies and books—and the fast pace of how the app and in-game economies have evolved—not to mention how difficult it is to regulate a worldwide, online business activity,” Black told us.

Further complicating this matter, at least in the court of public perception, is the World Health Organization making its diagnosis of “gaming disorder” official at almost the exact same time Hawley introduced his bipartisan legislation. As Polygon reports, the gaming disorder description uses almost the exact same wording as the WHO’s gambling disorder classification, just swapping out “gaming” for “gambling.”

Gaming disorder itself is a controversial diagnosis, as Dr. Raffael Boccamazzo, PsyD, has noted. Boccamazzo, better known in the industry as Dr. B, is the Clinical Director of Take This, a nonprofit founded to increase awareness and empathy of mental health issues in the gaming community.

“Many researchers believe there is a lack of consensus on this topic and the inclusion of the diagnosis is premature,” wrote Dr. B in a blog post. “In a 2016open letter to the WHO, two dozen of the leading researchers on the topic of problematic gaming behavior urged the WHO to refrain from considering gaming disorder as a diagnosis until more agreement could be reached in the scientific community.”

While the scientific community might have issues with the classification, the WHO’s ruling could politically benefit Hawley and his co-sponsors. “The bill will definitely gain support as a result of that decision,” Black said. “There’s a strong consumer protection angle to the bill which doesn’t depend on kids, but adding the whole idea that kids might get a disorder from playing games? That’s like catnip for politicians.”

Hoeg agrees: “On the margin there are likely at least a few senators of congresspersons who would want additional cover for any vote against such a large industry, especially since there are really no studies backing up the harm caused by the microtransactions that the bill is seeking to prohibit. So, on those margins, I think the WHO stepping in and saying there is a ‘real’ disorder that can occur—regardless, you may note, of how that disorder might intersect with lootbox or pay-to-win mechanics—will result in at least a few more ‘YES’ votes.”

Hawley’s bill still has several steps to go through before it becomes law; for now, it’s been referred to the Committee on Commerce, Science, and Transportation, on which two of the bill’s co-sponsors sit. In the meantime, Hoeg has ideas about “significant (and relatively painless)” steps that could be taken in lieu of the overreaching, often unclear Protecting Children from Abusive Games Act.

“In particular, age gates are used for website COPPA compliance right now, and because most microtransactions require credit cards—contracts which themselves already require an adult in the age of majority—a requirement that credit card information be presented at the time of each sale could be fairly easily added by the console manufacturers and PC digital distribution platforms,” Hoeg said. “The fact that these mechanisms exist also go to highlighting the overbreadth of the proposed law.”

Black believes self-regulation would be a more appropriate and beneficial solution. “I’d love for the games industry to be able to establish its own regulation environment, vs. having a government step in at a moment in time and draft a bill that is incredibly focused on one particular type of behavior... this bill goes from 0 to 100mph in terms of ratcheting up regulation on an industry that is ever-evolving,” he said.

The consensus among our legal sources is clear: Hawley’s bill, while supposedly protecting children from predatory gambling mechanics, reaches too far and uses language too vague to be practical or constructive. Unfortunately, that hasn’t slowed down the politicians fighting for it. “Only the addiction economy could produce a business model that relies on placing a casino in the hands of every child in America with the goal of getting them desperately hooked,” Hawley said last week.

It’s a heavy-handed statement that most industry pros would call inaccurate, but that may not matter in the long-run. Public perception has a way of preferring emotion to facts.

For more stories like this one delivered straight to your inbox, please subscribe to the GameDailyBiz Digest!

Sarah LeBoeuf is a freelance writer and editor with over a decade of experience in games media. When not writing about video games or playing video games, you can find her drinking obscene amounts of coffee, snuggling her cat, planning her next trip to Disney World, or starting fights on Twitter @sarahthebeef.

GameDaily Connect Sponsors
Partners