Video games that have simulated gambling elements will be classified as R18+ under ratings guidelines the government updated last week that will also restrict the targeting of loot box mechanics for younger gamers.
The government fulfilled its promise to incorporate gambling and gambling-like features in video games classifications when Communications Minister Michelle Rowland formally updated the guidelines last Tuesday.
Now “in-game purchases linked to elements of chance” (loot boxes) and simulated gambling are included under the ‘themes’ element with the latter only permitted in games rated R18+.
The new guidelines commence on 22 September 2024 to “provide time for industry to adjust to the new classification requirements”.
Loot boxes and gambling have been a controversial feature of video games for years with a 2018 senate inquiry first looking into how paid-for randomised rewards may normalise gambling behaviour.
It recommended a comprehensive review into loot boxes.
That inquiry found young people who buy loot boxes “may be more likely to gamble with real money in adulthood” and commented that “Australia cannot wait another generation before acting on this important issue”.
Ultimately, the inquiry called the government’s initial reform work – to classify simulated gambling as R18+ -- a “good first step” but recommended a “more granular approach” that takes into account how “some games that contain loot boxes more closely resemble gambling than others”.
Leon Xiao, an international researcher in video game law, made the point that an M rating for loot boxes was “merely advisory” while the R18+ rating for simulated gambling is legally enforceable.
He said it would be hard to differentiate between loot boxes and simulated gambling as has been included in the classification guidelines, saying it would hinge on “aesthetic features” that “would be subjective, particularly in relation to borderline cases”.
In Xiao’s view, it would be simpler from a regulatory standpoint to fold both definitions into the same category with the same age requirements.
Regulation in this space has been hampered in part by limited evidence as to the long-term effects of loot boxes and simulated gambling.
Dr Aaron Drummond from the University of Tasmania School of Psychological Sciences has been researching gambling in video games.
He told the committee that problem gamblers were especially at risk by loot boxes that bring gambling elements into their homes.
“For a lot of games companies it's not really in their best interests for people to leave the game and spend their money elsewhere,” he said.
Dr Drummond’s concern was that problem gamblers might “be trying to do everything in their power to not spend their money on gambling and be at home, not realising that what they're actually pumping their money into is essentially another form of gambling in everything but name”.
His recommendation was to focus on awareness campaigns that help “arm consumers with the information they need to help make informed decisions for themselves and for their children”.