Drafting Video Game Loot Box Regulation for Dummies: A Chinese Lesson

Loot boxes are virtual items in video games that players purchase to obtain randomised rewards of varying value. Such randomised monetisation methods are prevalently implemented globally. Loot boxes are conceptually and structurally akin to gambling, and their purchase is positively correlated with problem gambling in Western countries. Given the potential harms loot boxes may cause, particularly to vulnerable consumers, e.g. children, regulators and policymakers are paying increasing attention. Some countries, e.g. Belgium, have actively enforced existing gambling laws to ban certain loot box implementations. However, less restrictive regulatory approaches, e.g. requiring probability disclosures, are also being considered. Amendments to existing law and new laws dedicated to regulating loot boxes are likely forthcoming in many countries. Companies’ discretionary and suboptimal compliance with loot box probability disclosure law in the People’s Republic of China reveals how future loot box laws and industry self-regulations should be better drafted to ensure maximum consumer protection.