Submission on loot boxes – Parliamentary Inquiry into online gambling and its impacts on those experiencing gambling harm

Given the growing importance of the gaming sector and evidence showing the harm of ‘gambling style’ tactics used in some games, this inquiry should consider the definition of ‘gambling service’ to capture online gambling-like activities such as simulated gambling in games like loot boxes.

Similar to many parts of the digital economy that either lack oversight or are absent of adequate guardrails, the likelihood of harm is high yet obfuscated in the use of loot boxes in the gaming industry.

CPRC encourages the Australian Government to use the inquiry as an opportunity to understand:

• how gambling techniques are seamlessly embedded into some video games via loot boxes
• how this is impacting the wellbeing of Australians, including children
• what safeguards need to be in place to adequately protect Australians.

CPRC’s submission cites research conducted by the Norwegian Consumer Council (NCC) on how loot boxes exploit consumers via deceptive design, opaque algorithms, aggressive marketing and in-game currencies and opaque pricing structures. The submission also cites CPRC’s own research into deceptive and manipulative online design practices known as dark patterns which are features and functionalities embedded into digital platforms that purely exist to influence consumer behaviour. As found through NCC’s research, several forms of dark patterns are used to influence consumers’ engagement with loot boxes.

Research by NCC: Insert Coin – How the gaming industry exploits consumers using loot boxes

Research by CPRC: Duped by Design – Manipulative online design: Dark patterns in Australia