Loot Boxes: The Newest Form of Gambling?

  Luke        January 18, 2021

The video games industry, just like all others, can’t survive without your money. It used to be the case that all games would be sold at a fixed price. Once you bought your copy, that was it. However, in recent years there’s been a growing trend for games to be free to play. Free games still cost mil-lions to create and market, so how do the developers make their money back? Many no-cost games generate revenue through ads, while others use the rather controversial loot boxes, which some have likened to a form of gambling.

What Are Loot Boxes and How Do They Work?

So what is a loot box? It’s a virtual box of randomly determined items that a game lets you purchase with real money. You can purchase loot boxes whenever you like, though there’s no guarantee what’s inside. Some of the items you can receive include customisation options for your ava-tar/profile (clothes an accessories for your avatar), weapons, armour, other items and even charac-ters. Some loot box rewards, such as character skins, are purely cosmetic and don’t affect your pro-gress in the game at all. Others, such as weapons and armour, can help you get ahead.

Some of the biggest games around today use or have used loot boxes, including Fortnite, Over-watch, FIFA, Madden, Apex Legends and Star Wars Battlefront II. The way the boxes work and what you can get both vary from one game to the next, but the core mechanic is the same: pay and you’ll get a random selection of times, some or all of which may not be of any worth to you.

Are Loot Boxes a Form of Gambling?

A question that’s come up a lot recently is whether loot boxes constitute a form of gambling. This is because of the fact that you have to spend actual money to get them and there’s an element of luck to them: you may get items you want, or you may not.

Certain casino games, such as slots and roulette, are entirely based on luck. In other words, once you’ve placed your bet there’s nothing you can do to influence the game’s outcome; it’s down to luck alone whether you win and get paid, or lose. Though video games don’t give you money, paying for loot boxes is still regarded by some as gambling because of the randomness. When you play luck-based casino games, you place your bet and luck determines whether you get what you want, i.e. a win and some money. When you play video games, you pay for a loot box and it’s luck that deter-mines whether you get what you want from the box.

Do People Get Addicted to Them?

There have been quite a few stories posted online about people spending more money than they should have on loot boxes. Some people only spend small sums regularly, while others keep paying for boxes until they get what they’re after and can end up forking out hundreds, or even thousands of pounds over the course of a year.

A major concern is obviously that people can easily end up spending money that they don’t have or can’t afford to lose on loot boxes. A key problem is that limits on how many of these boxes you can buy don’t exist, so if you want to keep on buying boxes, the game will let you. Video games are very popular with children and teenagers, and people are concerned about youngsters being tempted or even pressured into buying loot boxes. It’s believed that if people of any age keep on buying loot boxes, they’ll develop a sort of gambling problem that could get serious if not dealt with; they could even move on to other forms of gambling, such as playing online casino games.

What’s Being Done About Them?

While countries have taken different approaches to loot boxes, in the UK they’re not covered by the country’s gambling laws. Therefore, they’re not regulated. This is because the items that you can earn from the boxes are deemed not to have any monetary value. However, the debate about loot boxes has been going on for a few years now and has been gaining momentum. The Department for Digital, Culture, Media and Sport is reportedly working on regulating loot boxes in some way and could formally class them as a form of gambling.
Though loot boxes can generate large amounts of money for video games, some games, including Star Wars Battlefront II, actually decided to stop offering them because of the negative reaction from players. If loot boxes do get classed as a form of gambling, it would be interesting to see how the legislation would affect games that currently use them.

EGR Best Online Casino Operator GVC Makes Bid for Ladbrokes Coral

  Luke        December 19, 2017

GVC Holdings PLC and Ladbrokes Coral are in detailed discussions regarding a merger of the two companies. GVC have put forward a proposal to acquire shares in Ladbrokes Coral in a deal that values the group at between £3.1bn and £3.9 bn.

The groups have held talks regarding a possible takeover previously this year. However, negotiations broke down owing to disagreements over how to value the group. This was closely linked to the government’s review into the gambling industry. A key factor in the review is linked to Fixed Odds Betting Terminals (FOBTs).

In October, the UK Department for Culture, Media and Sport completed the first stage of its review into controversial FOBTs. The outcome resulted in a government crackdown on FOBTs, reducing the existing betting limits on the machines to between £2 and £50. The final decision regarding maximum limits will be made in January.

The maximum limit will directly impact profitability for Ladbrokes Coral. As such, the proposed takeover offer from GVC has built in a condition which includes a share premium related to the government’s decision.

GVC have offered to pay 160.9p for each share in Ladbrokes Coral, which values the company at £3.1bn. This would be the value in the case that a maximum FOBT stake of £2 is implemented. In the event that the limit ranges between £5 and £50, a CVR will be paid for each share. Should the maximum stake of £50 be implemented, the value per CVR will be 42.8p. This gives the offer a range of a minimum of £3.1bn (160.9p per share) and a maximum of £3.9bn (203.7p per share).

The proposed acquisition comes at the end of a successful year for GVC, that was topped off with winning prestigious industry awards. The EGR awards are the egaming industry’s premier awards and the group picked up two coveted titles.

Fighting off competition from the best online casinos in the industry, including many of those featured at https://www.bestcasino.uk/, GVC picked up the title of Casino Operator of the Year. This was awarded to GVC in recognition of excellent performance in the casino sector. This included the addition of unique in-house content as well as more than 650 new games from third-party providers. The acquisition and overhaul of bwin.party amongst other brands was quoted as a significant factor in achieving the award.

The group also won the title of Poker Operator of the Year for its flagship poker brand partypoker. The judges commented that “Partypoker recorded phenomenal growth rates in absolute terms but it was even more impressive given the perceived structural decline of poker market. Management clearly focused on revamping product supported by live tours and strong brand push after a period of neglect.”

The acquisition of the Ladbrokes Coral Group by GVC would create a leading global gaming company, with the largest number of high street bookmakers and a significant share of the online gambling market. GVC has until 4th January to announce a firm intention on whether or not to make an offer to acquire Ladbrokes Coral.

Japan Embraces Gambling As The UK Continues To Demonize It

  Luke        April 20, 2017

Japan has a very long and very complicated history with gambling. I won’t get into it here in the interest of time, but suffice to say, for the longest time the land of the rising sun has been extremely conservative when it comes to betting money on games and expecting to get money back. Keep in mind that casino-like activities have existed in the country for years, such as the famous Pachinko machine scheme (which involves people betting money on Pachinko machines, getting some kind of prize from them and then exchanging said prize for money at an unrelated establishment), which further proves that many Japanese people REALLY want to gamble, but alas, the government was an immovable object… Until recently. Believe it or not, just a few months ago a legislation finally legalized casinos in Japan, making it completely legal for people to run and operate land-based casinos as long as they’re properly certified and inspected by the government (which is the case in many countries, the UK included).

Now, you might be wondering: Why did Japan’s government suddenly have a change of heart, anyway? Did they elect a known gambler as prime minister? Did they lose a war and need to reinstate gambling as part of their reparations? Did an anime demon change reality before being slain by a group of archetypal high school kids who were then unable to repair the damage? Nope! The answer is as simple as it’s always been – money. Money, money, money. Most people have no idea just how much money the gambling industry makes per year, and why it still considers to be one of the leading markets even ahead of Hollywood. Experts estimate that now that Japan has legalized gambling, if it only opens 3 (THREE!) casinos in the entirety of the country, it’s looking at revenues of $10 billion annually (and we’re talking net profit here). To put that in perspective, $10 billion is 0.2% of Japan’s gross domestic product. That’s a lot of money, especially for an emerging market. The numbers are even bigger for the casino market in the UK, so naturally, the UK government is doing the smart thing and, uh… Trying to shun its development in any way it can?

Yep, as I’ve reported in the past, the UK government continuously tries to undermine the casino industry in various idiotic ways, such as banning their ads from showing or refusing to pass a simple legislation to allow for skill-based games to be installed in casinos. It’s all incredibly petty, and it almost looks like it’s being done out of spite rather than for any particular reason. Now, don’t get me wrong – gambling addiction, and especially its escalation in frequency, has been a huge problem in the country. But demonizing gambling in general because a small minority of people suffer from it is idiotic! It’s like banning peanuts because some people are deathly allergic to them! I do absolutely agree that certain measures need to be taken to curb gambling addiction (for example, after you’ve bet a certain amount or have spent a certain amount of time in an online casino, a prompt should pop up saying “Hey, you’ve played for an X amount of time, maybe it’s time to take a break”), but demonizing the gambling industry in general is only going to end badly. Because you know what happens when you start treating one of the most successful industries of your country like crap? It stops being successful, and everyone suffers because of it. Here’s hoping the UK can learn from Japan.

A Ban On Gambling Ads Might Strain Relations Between Government and Casinos

  Luke        November 7, 2016

When you’re an online casino operator, you pretty much need to rely on two groups of people in order to obtain a consistent income. One of them is, of course, the “whales” – the hardcore gamblers that play for hours every day and pay you hundreds in their attempts to win the jackpot. I guess the less politically correct term to describe those people would be “addicted”, but that’s a discussion better saved for another day. The other group, of course, is newcomers – those who come in, put 20 quid into their account, spin a slot a couple of times, and then never play again. You’d be surprised to learn that the latter group brings in just as many profits as the former – why do you think practically every casino offers so many huge first deposit bonuses, but most offer absolutely no second, third or fourth deposit bonuses? They know that most people need that extra push to invest the first time, and if they like it they’re going to remain loyal to the casino for the foreseeable future even without bonuses.

But the government has had enough of this, and apparently, they’re looking to cut the income of new gamblers dramatically by placing an outright ban on gambling advertisement. If this bill goes into effect, as it probably will, it’s going to prohibit any sort of advertisement online or on TV, except in adult-oriented channels (for example, if you go to a casino site, you’ll probably see ads and banners for online casinos, but you’re not going to see them on, say, Facebook). This, obviously, isn’t good news for the casino industry, as advertisement are their main source of attracting new players – without it, they lose a significant percentage of their revenue, which could be catastrophic for the entire UK industry (which is pretty much the market leader in Europe). Last year, the gambling industry grossed a revenue of £7.1 billion in the UK, and while the numbers have only been increasing as online gambling’s popularity has risen, I can guarantee you that, if this ban gets put into place, the gross revenue will decrease dramatically.

So, why is this ban put into place? One would assume that it’s to gambling the aforementioned gambling addiction… Except that doesn’t appear to be the case at all. According to a source for the Telegraph, “as it stands, betting sites can basically be advertising to children all weekend,” which leads me to believe that the reason why one of the most profitable UK industries right now is essentially being skinned alive is because of this need to “think of the children”… Except that reasoning is complete and utter nonsense, because children are not permitted by law to gamble. So what if online casinos advertise to kids 24/7? None of them is ever going to allow them to even sign up, let alone play! Do you know exactly how many incidents there have been in the UK in which a child got addicted to gambling? Zero. There have been zero such cases, because children do not gamble. So neutering the entire industry and dramatically cutting its profits for what is essentially a non-issue born out of fear-mongering and paranoia seems like a terrible idea, but what do I know.