The topic of loot boxes, microtransactions and other types of gambling mechanics in video games is one that is handled differently in different jurisdictions. Video gaming is a worldwide industry that rivals many other entertainment industries.
How does Australia regulate this hot-button issue?
The video game industry is one of the biggest entertainment industries globally, and it is not without its share of contentious issues. One of the contentious issues that has seen a lot of discussion in the last couple of decades is focused on microtransactions, loot boxes and other gambling-like mechanics. Different jurisdictions and markets have taken different approaches to the regulation of these things, and the Australian market is one that has taken regulatory steps somewhat recently.
The overall feeling amongst Australian regulators and policymakers is that loot boxes and similar chance-based mechanics in gaming should be treated as gambling, but Australia has a friendly relationship with gambling. Not all jurisdictions share the friendly attitude that Australia does toward gambling, as Erik King of Zamzsino can vouch; different markets can have wildly different legalities for online casino entertainment. This is why it's important to touch base with affiliate platforms or to otherwise stay on top of what the legalities might be before you engage with gambling.
But we digress, let's take a closer look at how the actions of Australian legislators are reflecting the wider global feeling towards loot boxes and gambling-like mechanics in video games.
What's all the fuss? What even are loot boxes?
It's a box, you get loot out of it, what's the big deal? Well, while loot boxes might have originally been a design decision to prolong end-game content and keep revenue coming in for game developers, they've taken on a much more sinister aspect for many people. They are a very popular feature, at least in terms of their inclusion, in most mobile and online games.
The typical loot box isn't the sale of an item; it's the sale of the potential of an item. You might be beginning to see where the problem can arise. A player who buys a loot box will definitely get something, but they don't know what it will be. Loot boxes spin a random number generator (RNG) and spit out one of a number of different possible options, but they also often have rare drops, items that are considered more valuable than the rest of the potential pool.
If you have spent much time around slot machines, this all might be sounding somewhat familiar to you, and that's certainly what many other people have claimed. The types of rewards that loot boxes give vary from game to game. It can be anything from in-game currency to be used elsewhere, power-ups and other things that might affect gameplay, or simply new cosmetic items and skins for players to deck their favorite characters in.
Microtransactions are slightly different, but similar in ways. They are also designed as a way for revenue to be generated after a game's launch, and are also very consistently used in modern online and mobile gaming. They can, similarly, also offer a range of different options to players. While not as maligned as loot boxes, microtransactions often enable access to loot boxes and are often considered in the same breath as being gambling-like content.
How is Australia approaching loot box regulation?
While Australia does have a uniquely friendly relationship with gambling, online gambling is still regulated. Those regulations are continuing to become more strict as time goes on, and in the eyes of many regulators, loot boxes in video games have been skirting those regulations.
As Australian regulators are deeming loot boxes to be, if not gambling, at least gambling-like, they have decided that they should be treated as such. Games that have loot boxes in Australia automatically receive an "M" (Mature) rating, meaning that they can only be purchased by consumers over 15 years of age. Games that go further and have actual simulated gambling activities are automatically rated "R18+", which, we hope, speaks for itself.
While Australia has a long history of, as some would tell you, over-reacting and over-protecting its citizens from the 'dangers' of content in video games, this is an interesting case. The legislative change made Australia one of the first countries to address the potential danger of loot boxes by using its classification and rating system, rather than by directly labelling them as gambling and using its existing gambling legislation.
The legislature is a nod to the idea that while these games don't contain gambling, per se, they do contain content that mimics or encourages gambling behavior.
How has the gaming industry reacted?
As far as it goes, most of the reaction to the changes has been cooperative. Video game developers know that the Australian video game market is a lucrative one to be a part of, with Australians having spent $3.8 billion in 2024 on gaming and gaming-related items.
Some industry heavyweights, such as Ubisoft and EA, who have previously received criticism for their predatory monetization techniques, have quietly accepted the change in the weather and are changing their models, not only for the Australian market but for a wider global attitude shift. These newer models often clearly show the odds tied to loot box purchases, or have done away with them altogether, providing other, more predictable items in their place.
Final Thoughts
The actions of the Australian legislators can be seen in the broader context of a worldwide shift towards greater consumer protections in relation to gambling-like content. In many regions, such as Australia, gambling content is a perfectly allowable entertainment choice for adults to make. But the fairness and transparency around those entertainment options need to be balanced and clear for consumers to understand what they are doing.
It's possible that other jurisdictions will follow in Australia's footsteps, while others may lump loot boxes in with other gambling activities, leaving them contending with exactly the same laws that slot machines must.
