Video Game Loot Boxes Same As Gambling For Kids In Michigan, Expert Says

Written By Dave Briggs on October 10, 2023
Loot box slot machine for story on expert saying video game loot boxes are similar to gambling for kids

Michigan parents may want to monitor their children’s video game purchases. There is growing concern in-game loot boxes are little more than gambling in disguise.

Youth problem gambling expert Dr. Jeff Derevensky is the director of The International Centre for Youth Gambling Problems and High-Risk Behaviours founded at McGill in Montreal in 1992.

In an interview with PlayMichigan, Derevensky said, “What we’ve been studying over the last few years is the amalgamation and the merger between gaming and gambling. You go on some of these games, online games which are for fun, and you can actually start gambling with real money.”

Asked whether gaming companies are attempting to groom future gamblers, Derevensky was direct.

“I don’t think the gaming companies, in particular, really care about future gamblers,” he said. “They’re concerned about present gamblers. They want you to go online and they want you to try to win different items. And, by winning these different items, in what are referred to as loot boxes, what you’re really doing is you’re gambling and you’re spending a fair amount of money doing that in order to try to win these prizes, most of which have no real value whatsoever.”

Video game companies are not authorized to offer gambling anywhere in Michigan. More egregious, is the fact loot boxes predominantly appeal to people much younger than the legal age to gamble. That, Derevensky said, is a problem that needs addressing for responsible gambling in Michigan.

What are loot boxes?

Loot boxes are rewards within video games. Those rewards can be purchased either with virtual currencies or real money via a credit card.

What is inside the boxes is a mystery prior to purchase. Many says that makes them a game of chance.

Depending on the type of video game one is playing, the contents of loot boxes could include:

  • special player characters
  • new clothes or other items that help a character change its appearance
  • special weapons or tools
  • access to new in-game features and more

However, the likelihood of receiving a premium prize is historically rare. That’s another reason why loot boxes can be considered gambling.

There have been long-standing concerns that loot boxes encourage gambling behaviours, particularly among young people.

Epic Games paid out $2.75 million in a Canadian class-action over loot boxes

Last week, Epic Games, the maker of hugely popular video games Fortnite and Rocket League, paid out $2.75 million in a Canadian class-action settlement over loot boxes.

CTV News reported the class-action was certified by the Supreme Court of British Columbia. Agreeing to the settlement has released Epic Games from all claims raised in the legal proceedings.

Anyone in Canada that purchased a loot box in Fortnite from 2017 to 2019 and/or Rocket League from 2016 to 2019, and joined the class action, is eligible to up to $25.

Epic Games said in a statement that it “discontinued the use of random item loot boxes in Fortnite and Rocket League in 2019 because we realized that while some players really enjoy being surprised by the content of random item loot boxes, other players are disappointed.

“Players should know upfront what they are paying for when they make in-game purchases.”

Other troubling connections between video games and gambling

In August, it was announced that popular children’s video game platform Roblox is being sued for illegally facilitating and profiting from underage gambling.

Lineups reported, “a California class action lawsuit, filed by parents Rachel Colvin and Danielle Sass, accuses Roblox Corp. of directly violating the Racketeer Influenced and Corrupt Organisations Act. The parents allege that their children used Roblox currency, known as Robux, to gamble on third-party websites accessed through Roblox.”

The Roblox platform features a large library of games and allows users to create their own games and chat with other users. Roblox is an app that combines video games, social media and commerce through the platform’s Robux.

The parents in the lawsuit allege their children lost thousands of Robux while gambling on the site. For context, 800 Robux sell for $9.99.

Young people have much higher rates of problem gambling

Loot boxes and their tie to gambling can be especially problematic for young gamers.

And, Derevensky previously told PlayMichigan that problem gambling is particularly acute for young people.

“We know adolescents have a much higher prevalence rates of gambling problems than adults do, but [young people] present in very different ways,” he said. “They don’t lose their family. They’re still living with their family. They don’t lose a spouse … but they can be preoccupied with gambling. They will get overly involved. They will lose a fair amount of money for their age or their occupation at the time.”

Derevensky said gambling has become much more normalized and socially acceptable as it has expanded rapidly. Minors, like the rest of us, are also bombarded with gambling ads. All that has increased the risks for young people.

“We know that prevalence rates of gambling amongst teenagers can be as high as 80%,” he said. “That’s not problem gambling, but the percentage actually [gambling].

“What we’ve seen is changes especially in terms of electronic forms of gambling where people can gamble online, both on a laptop or desktop as well as on your own cell phone. And so this has dramatically changed. [A cell phone] is a walking casino… The other thing in North America that has changed is there is much more sports wagering. And so now we have all the major teams getting involved, and major leagues getting involved in gambling. It’s just everywhere.

“And young people … think they’re smarter than adults, and they think they can predict the outcome of random events or even non-random events much better than we can as adults.”

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Dave Briggs

Dave Briggs is a managing editor and writer for Catena Media. His expertise is covering the gambling industry in Michigan with an emphasis on online casino, online sports betting and horse racing sectors. He is currently reporting on the gambling industries in Michigan, Pennsylvania and Canada.

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