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Academic and prominent anti-loot box campaigner Leon Y. Xiao has criticised gambling regulators for failing to crack down on skins gambling, as he presents a new paper that characterises video game platform Steam as a purveyor of illegal gambling.
Xiao’s latest publication, co-authored with researcher Laura Henderson in the journal International Gambling Studies, zeroes in on video games platform Steam, which the academic says harbours games that are in breach of gambling laws in several European countries.
The report identifies 35 games which feature loot boxes that award items which can be separately traded among users.
Among them are titles such as Team Fortress 2, Dota 2 and CS:Go, which collectively have millions of regular players.
The ability to trade the contents of loot boxes is a requirement for them to be gambled on third-party “skins betting” platforms.
Steam, a marketplace for buying video games and trading loot box items, is owned by the Valve Corporation, headquartered in the US state of Washington.
In face of lawsuits and pressure from state regulators, Steam attempted to distance itself from skins betting in 2018 and cut off several prominent operators from connecting to its platform.
Those include websites connected to four companies, some headquartered in the UK, which were
Xiao, an academic at the Center for Digital Play within the IT University of Copenhagen, contends that Steam is not simply facilitating third-party skins betting websites, but that under the laws of many countries the loot boxes it offers are themselves unlicensed gambling.
“Paid loot boxes with random content that can be traded with other players on Steam constitute ILLEGAL GAMBLING per the legal interpretations published by gambling regulators,” he wrote in a post on LinkedIn.
He also criticised several regulators for apparent inaction against Steam in the face of what he sees as a company flouting gambling laws.
“The UK Gambling Commission assured me that ‘these products are being looked at by specialists throughout the Commission’ in August 2023. However, nothing has been done/published after a year,” he said.
The Danish regulator told Xiao it was not confident it could win a legal case and so was seeking other methods of enforcement against loot boxes. Finnish regulators faced similar concerns over attempts to target a foreign company, the academic said.
“What use is gambling law or indeed a public statement applying gambling law to loot boxes if there is no enforcement? A hyperbole, but we live in lawless times,” said Xiao.
What action has been taken by European regulators has been largely fruitless.
Attempts to fine Electronic Arts €30m in Denmark over loot boxes in its FIFA (now known as EA Sports FC) video game series were defeated in court.
Similar attempts by the Netherlands Gambling Authority (KSA) to take EA to court were also dismissed on appeal.
Vixio GamblingCompliance has contacted Valve for comment, but received no response before time of publication.
