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Legislator Makes First Moves To Regulate In-Game Purchases

The loot box controversy continues to grow as Hawaii state representative Chris Lee announced that he’s already made the first steps to legislate in-game purchases.

A week ago, in our report on the fallout of the Star Wars Battlefront II loot box controversy, we linked a video of Hawaii state representative Chris Lee’s conference. We didn’t comment on it then, but in it, Lee called Battlefront II a “'Star Wars'-themed online casino designed to lure kids into spending money.” His focus was on what he called the “predatory practice” of selling loot boxes and announced that he was looking into legislation that would forbid the sale of games with such sales models to minors.

Lee later released a second video announcing his plans to take viewers behind the scenes of the legislation he is building. The video revealed that Lee is more nuanced in his understanding of the video game industry than one might expect from his title. Lee specifically mentions pay-to-win models, which gives us hope that he isn’t just seeking blanket regulation of microtransactions. Loot boxes are a form of microtransaction, but so are things like unique skins or premium content in single-player games.

In his most recent video, Lee showed that he’s sticking to his plans, both for legislating and showing us the legislative process (or at least some of it). It seems Lee is currently focusing on two points: restricting the sale of games with “gambling mechanisms” to minors and bringing disclosure to such mechanisms where they exist. The first point is the easier one to interpret. We can imagine a new 21-and-up rating that all games with loot boxes become automatically classified as. The second point brings to mind recent Chinese legislation that forces games to reveal the odds behind their loot boxes. To this point, Lee said the following:

This is third-hand so I gotta verify this, but you can go in and once the algorithm identifies a player who’s likely to keep spending money to buy that one unicorn thing that they’re after, then their chances get lowered...

We don't think either of Lee’s points are particularly alarming (as long as you’re over 21). Lee isn’t seeking a blanket ban on loot boxes, so those who enjoy the thrill of opening them will still have that chance. It’s also encouraging to know that Lee is discerning in his definition of “gambling practices,” of which he said the following:

If you were to buy a $200 sword in a videogame, but you knew that you were getting that sword, that would not fall under the definition. But if you were going to spend $200 to buy a percentage chance to get a certain sword…

Though Lee says that the response from fellow and other state representatives has been tremendous, he doesn’t necessarily expect that any actual legislation will be passed. Instead, he hopes that an ongoing narrative of the issue within the legislative space will be enough to pressure game makers to move on their own. Lee thinks that the threat of losing the under-21 market is too great of a risk for them. If a quote from EA is to believed, this might actually be happening already. At the 37th Nasdaq Investor Conference, EA’s Blake Jorgensen said that it is still investigating how to bring microtransactions back to Star Wars Battlefront II, if at all.