Why India needs to look at loot boxes as a foundation for healthy online gaming regulation

Modern times call for modern measures. In the case of the online gaming industry, what India needs is at the very least, a modern approach to overseeing the activities happening in the digital realm.

Already considered a game-friendly market, India has leveled up during the coronavirus pandemic with a 35 percent increase in the number of real money games played by an average user monthly during the global lockdowns. That’s not surprising, given that the number of online gamers in the country reached an estimated 400 million in the summer of 2020.

How loot boxes fueled growth of online games in India

The advent of loot boxes can be considered among the factors that fueled the growth of online gaming in the country. Loot boxes are essentially add-on content that a player can buy to amplify the gaming experience, whether its bonus coins or new avatars, or new equipment, weapon, and tools.

The catch is the player doesn’t know what they are getting in the loot box, which they are paying for. This means that the act of opening loot boxes may be considered an act of gambling since it satisfies the criteria of gambling, which is an “activity of risking money on the result of something, hoping to make money.”

The Public Gambling Act, 1867 specifically bans all gaming activities that are not classified as “game of skill”; however, in the advent of digital times, online betting activities are now operating in a gray regulatory landscape which can potentially get murkier with the addition of loot boxes.

Uday Walia and Surbhi Soni of Touchstone Partners noted that the loot boxes, which paid for in real money and offer some value and usability to the user, could come within the ambit of the Gambling Act as it is drafted to cover both the monetary benefits as well as any value made out of a bet or wager with real-world money.

Closing loot box loophole for healthy online gambling regulation

What’s important to note here is that loot boxes are available to any player of any age. When it comes to loot boxes, even minors are unwittingly buying loot box after loot box in their attempt to get their hands on a sought-after item.

In this scenario, we can say that loot boxes can be considered gambling—but there’s a glaring difference, especially in markets where gambling activities are regulated. As Felicia Wijkander, Chief Editor of online casino comparison site SevenJackpots, pointed out, gambling activities are strictly only for those 18 years of age and older, whereas anyone—even toddlers—can purchase a loot box simply by pressing the screen of their smartphone.

There is a viable solution to this dilemma, but policy makers need to take several things into consideration. First, the government must realize the loot boxes share similarities with gambling, but unlike gambling, loot boxes are available to anyone regardless of age. The second is that India has a deep-seated passion for gambling, and whether it’s the traditional way or via online platforms, there’s no stopping people from enjoying their favorite pastime.

The solution, therefore, is to develop a comprehensive framework that also takes into account how to best regulate loot boxes, if it is decided that they fall within the ambit of the Gambling Act. Loot box regulations are already happening in mature gaming markets, including Belgium, Germany, and the United Kingdom. India’s politicians may do well by taking an example out of these European jurisdictions on how to build a strong foundation for healthy regulation.