US Legislator Chris Lee's Template Letter About Lootboxes

[Kheld]

I’m writing to bring an important issue to your attention, and ask for your help. Over the last few years big video game developers have begun to employ predatory mechanisms designed to exploit human psychology to compel players to keep spending money in the same way casino games and slot machines are so designed. According to mental health experts games employing these kinds of predatory mechanisms can present the same mental health, addiction, and financial risks as gambling.

 

Many families are now coming forward with first-hand accounts of these predatory mechanisms compelling people, in particular youth who are particularly vulnerable to a gambling or gaming addiction, to accrue thousands of dollars of video game-induced debt.

 

Since about 2010, the largest video game developers have begun using increasingly aggressive schemes built into their online games to compel players to purchase in-game content such as characters, tools, or other upgrades. These in-game purchases, which typically range from about $1 to $100, are often referred to as “microtransactions.” The latest form of these microtransactions is the in-game purchase of a “loot box,” which buys a box with a random chance of containing an item of value, or an item which is worthless. In some games valuable items won in a loot box can be immediately resold to other players in online marketplaces for hundreds of dollars.

 

The loot box game mechanism is designed to exploit the same psychological responses that make slot machines addictive, posing a significant risk to vulnerable consumers. Slot machines use high-speed variable-rate rewards, in other words a random chance of winning something of value, which has been shown to play a significant role inducing gambling addiction faster than any other casino game. This is typically coupled with enticing visual and audio cues designed to strengthen a positive response from a user, such as flashing lights and slot machine-like audio cues.

 

Loot box game mechanisms are often styled to literally resemble slot machines, and are made available to anyone in games on their mobile phones, consoles such as the X-Box, Playstion, and on home computers. This may explain why the American Psychological Association has identified “Internet Gaming Disorder” as an emerging diagnosis which warrants further study in the Diagnostic and Statistical Manual of Mental Disorders (DSM-5).

 

There are typically no meaningful warnings when downloading or purchasing a game that may contain these addictive predatory mechanisms. This leaves consumers unaware of the danger which could be present, particularly to people who are vulnerable to addiction and underage youth without the cognitive maturity to recognize a forming addiction. Further, regular automatic updates to online games can introduce loot boxes and other predatory mechanisms into a game at any time, making it extremely difficult, if not impossible, for a player or parent of a player to know which games may or may not be appropriate for them.

 

Today online games can be accessed through phone apps, consoles such as a playstation, and on home computers, which are frequently tied to credit cards or apple accounts which means purchases can be made at the click of a button without additional authorization. In addition, young adults often use cash to purchase gift cards or game credit which can be used to make purchases in online games.

 

This makes in-game microtransactions extremely difficult for parents to prevent their children from purchasing unless they can monitor every second of game play at home, as well as monitor access to mobile phones, gaming consoles, or computers everywhere else. As most parents will explain this is simply not possible in today’s technologically driven world.

 

While Casino games and slot machines are heavily regulated to protect underage youth and ensure that casinos are not exploiting consumers, in most places there is zero oversight of online gaming practices and their similar dangers. In these online games the odds of actually winning something of real value are almost never disclosed. There is also no oversight to ensure game developers aren’t manipulating the odds in real time to hold back rewards from people a game algorithm may identify as likely to keep spending money. This type of manipulative practice has already been documented in the gaming industry.

 

I’m writing to ask for your help.

 

The online gaming industry has been growing at an exponential rate and now reaches into every community. It now collects $30 billion from consumers annually - closing in on the traditional casino industry which now collects $38 billion annually.

 

Unlike carnival games, collecting cards, or similar purchases of chance, video games require active, lengthy participation during which consumers are exposed to psychological manipulation techniques which can result in real addiction and harm. The scale and ease of access to these games make addressing these concerns critical. Casinos have long been criticized for building a business model around the exploitation of psychological vulnerabilities in many people. These business models are now being replicated by the online gaming industry to do the same, right on the phones and in the homes of countless families around the country.

 

Most significantly, there is no barrier to accessing these games for underage youth. In fact, a significant portion of gaming industry marketing and advertising specifically targets a younger demographic which child psychologists identify as particularly vulnerable to psychological manipulation. These factors have led to a proliferation of addictive behavior and excessive micro transaction spending, especially amongst youth and young adults.

 

Game developers in the gaming industry are represented by their trade group, the Entertainment Software Association (ESA). In 1994 the ESA created the Entertainment Software Ratings Board (ESRB) to provide video game ratings for consumers. Unsurprisingly, the ESA and ESRB have taken a position defending the lucrative revenue streams generated by these predatory mechanisms, claiming that predatory loot boxes do not fall under the current definition of gambling.

 

However, the issue is not whether predatory loot boxes fit into the existing 20th century legal definition of gambling which typically requires the possibility of players receiving currency in return for risking their money. Rather, the issues is the fact that predatory loot box mechanics present the same psychological and social dangers as gambling, and that youth and young adults are specifically targeted and exposed to these exploitive practices.

 

As a result, regulators from countries around the world such as Belgium, Australia, France, and the Netherlands have already begun to investigate and intervene. US regulators may also need to rein in these predatory practices, and I am writing to ask for your consideration to take action. These are some suggested next steps:

 

1. Ensure that games employing loot boxes or similar variable reward mechanisms which can be purchased receive a 21 years of age and older “Adults Only” rating to warn consumers before they purchase or download a new game.

 

2. Consider prohibiting the sale of games employing loot boxes or similar variable reward mechanisms which can be purchased to those under 21 years of age.

 

3. Expand the mission of regulatory oversight bodies such as gaming commissions—which already oversee slot machines—to encompass loot boxes or similar variable reward mechanisms which can be purchased in video games.

 

4. Require the clear disclosure of the odds of winning items in loot boxes or similar variable reward mechanisms which can be purchased on screen at the time of purchase.

 

5. Enable regulators to audit the game mechanics of loot boxes or similar variable reward mechanisms which can be purchased to ensure consumers are treated fairly.

 

Thank you for your help to address this critical issue. The health and well being of the people, families, and youth in our community is important and I strongly urge you to take action to protect against these growing predatory gaming practices.

[CrazyCT]

Any statistics or is this just purely anecdotal?

[Kheld]

Probably a politician just jumping on the bandwagon, though in this case, I dont think its a bad thing.

 

RNG returns for real money are an evil business practice, and I hope companies like EA get their just desserts.

[CrazyCT]

Probably a politician just jumping on the bandwagon, though in this case, I dont think its a bad thing.

 

RNG returns for real money are an evil business practice, and I hope companies like EA get their just desserts.

 

I don't like them myself, but to completely fabricate a story about how this makes children get addicted to gambling? Despicable. Making stuff up to affect laws and the way we are governed is not the way to go about this. Now, if there is actually a link between these boxes and online gambling addiction in children, then I'll join that parade, but if it's really just because you don't like them, then just don't buy them, but don't waste everyone's time with this ********.

[GalacticKegger]

Any statistics or is this just purely anecdotal?

Great question. Why don't you ask him?

 

Representative Chris Lee

House District 51

Hawaii State Capitol

415 South Beretania Street, Room 436

Honolulu, HI 96813

replee@Capitol.hawaii.gov

Edited December 10, 2017 by GalacticKegger

[Andryah]

I don't like them myself, but to completely fabricate a story about how this makes children get addicted to gambling? Despicable. Making stuff up to affect laws and the way we are governed is not the way to go about this. Now, if there is actually a link between these boxes and online gambling addiction in children, then I'll join that parade, but if it's really just because you don't like them, then just don't buy them, but don't waste everyone's time with this ********.

 

Well.. the OP was not specific as to which legislator (there is more then one with that name) ... but I'm guessing it is Christopher Lee of Hawaii who serves in the 51st district of the Hawaii state legislature. This is not even a US federal legislator.

 

This is old news....

Edited December 10, 2017 by Andryah

[GalacticKegger]

Well.. the OP was not specific as to which legislator (there is more then one with that name) ... but I'm guessing it is Christopher Lee of Hawaii who serves in the 51st district of the Hawaii state legislature. This is not even a US federal legislator.

Doesn't need to be. Representative Lee is a Majority Whip in the Hawai'i House of Representatives who as a state representative does not legislate federal law. Though many bills that are introduced in Congress originate from state legislatures. So Rep. Lee is working with other state legislatures to eventually get this issue on the Federal docket.

This is old news....

If the

being as recent as 4 days ago qualifies as old news. I doubt we'll be hearing much else for a few weeks as Sessions are in recess until January because of the Holidays, with all current activities officially being carried over to the 2018 Regular Session schedule as a result. Though he and his team will continue to actively monitor the situation. Edited December 10, 2017 by GalacticKegger

[Draqsko]

1. Ensure that games employing loot boxes or similar variable reward mechanisms which can be purchased receive a 21 years of age and older “Adults Only” rating to warn consumers before they purchase or download a new game.

 

2. Consider prohibiting the sale of games employing loot boxes or similar variable reward mechanisms which can be purchased to those under 21 years of age.

 

Adults who are 18 years old can be drafted and die for their country, yet this guy doesn't think they are mature enough to handle gambling in video games. I hope there's a picket line outside this guy's house when US soldiers have to ask their parents' permission to buy a video game.

[Eshvara]

Adults who are 18 years old can be drafted and die for their country, yet this guy doesn't think they are mature enough to handle gambling in video games. I hope there's a picket line outside this guy's house when US soldiers have to ask their parents' permission to buy a video game.

 

You can't really make that comparison. People can die for their country, but not have sex with ******s, smoke weed, do drugs, kill themselves, buy strong alcohol before the age of 22 or whatever that would result in them harming themselves in a major way.

 

It's probably the dumbest comparison I've ever seen on the forums. Or at least equal to comparing veterans to in game PvP'rs.

[dr_mike]

Just for reference, Chris Lee is not a US Legislator.

 

He's a state house member in the Hawaii House of Representatives.

 

https://en.wikipedia.org/wiki/Chris_Lee_%28Hawaii_politician%29

 

If folks want, I can post a video from my own local state house member about dog walking and cleaning up after them. I've been waiting for that to hit national news so her can get is fifteen minutes of fame as well.

 

edit: Just realized that was also mentioned up above. Excuse me.

Edited December 10, 2017 by dr_mike

[GalacticKegger]

Just for reference, Chris Lee is not a US Legislator.

 

He's a state house member in the Hawaii House of Representatives.

 

https://en.wikipedia.org/wiki/Chris_Lee_%28Hawaii_politician%29

 

If folks want, I can post a video from my own local state house member about dog walking and cleaning up after them. I've been waiting for that to hit national news so her can get is fifteen minutes of fame as well.

 

edit: Just realized that was also mentioned up above. Excuse me.

http://www.capitol.hawaii.gov/memberpage.aspx?member=clee

http://www.capitol.hawaii.gov/members/leadership.aspx?chamber=H

Edited December 10, 2017 by GalacticKegger

[Draqsko]

You can't really make that comparison. People can die for their country, but not have sex with ******s, smoke weed, do drugs, kill themselves, buy strong alcohol before the age of 22 or whatever that would result in them harming themselves in a major way.

 

It's probably the dumbest comparison I've ever seen on the forums. Or at least equal to comparing veterans to in game PvP'rs.

 

It's not a dumb comparison, I am not trivializing what US soldiers do in the field by comparing it to PvP in a game. What I am doing is saying it is dumb to say those very same people are capable of being responsible enough to risk their lives, yet are incapable of being responsible with loot boxes in video games.

 

If he was merely restricting it to minors, I could see the argument for it. But you are talking about adults here, when you are 18+, there is nothing that can stop you from taking out your own credit card and buying yourself into debt in a variety of ways and I don't see Rep. Lee trying to legislate against that. That is just as damaging if not more damaging than problematic gambling, I see many more people living beyond their means than I see people with a gambling addiction.

[GalacticKegger]

Adults who are 18 years old can be drafted and die for their country, yet this guy doesn't think they are mature enough to handle gambling in video games. I hope there's a picket line outside this guy's house when US soldiers have to ask their parents' permission to buy a video game.

There's an inconsistent disconnect with "underage" protection laws in the U.S. IIRC minimum age for long firearm permit ownership ranges from 14 to 21 depending on the state. Minimum age for sidearm permit ownership ranges from 18 to 21 depending on the state. Minimum age for alcohol purchase ranges from 18 to 21 depending on the state. Minimum age for tobacco purchase is 18. Minimum age for gambling ranges from 18 (restricted) to 21 (unrestricted).

 

And I agree with you wholeheartedly that if a person is old enough to put their life on the line serving their country then they damn well should be considered legally old enough to enjoy an evening of chemmy, cigars and scotch in a casino after a day of target practice at the gun club.

 

But that has nothing to do with what this guy does or doesn't think because the minimum age for online gambling is 21. He's merely following the law. Now if the minimum age for online gambling was 18, then his template would have read:

1. Ensure that games employing loot boxes or similar variable reward mechanisms which can be purchased receive a 18 years of age and older “Adults Only” rating to warn consumers before they purchase or download a new game.

 

2. Consider prohibiting the sale of games employing loot boxes or similar variable reward mechanisms which can be purchased to those under 18 years of age.

What I find most fascinating is how an individual's cred and character comes under blind & assumptive attack by people on the other side of the Internet who somehow feel threatened enough by this to warrant Googling him for ammo. Edited December 11, 2017 by GalacticKegger

[Draqsko]

There is an inconsistent disconnect with "underage" protection laws in the U.S. Minimum age for long firearm permit ownership ranges from 14 to 21 depending on the state. Minimum age for sidearm permit ownership ranges from 18 to 21 depending on the state. Minimum age for alcohol purchase ranges from 18 to 21 depending on the state. Minimum age for tobacco purchase is 18. Minimum age for gambling ranges from 18 (restricted) to 21 (unrestricted).

 

And I agree with you wholeheartedly that if a person is old enough to put their life on the line serving their country then they damn well should be considered legally old enough to enjoy an evening of chemmy, cigars and scotch in a casino after a day of target practice at the gun club.

 

But that has nothing to do with what this guy does or doesn't think because the minimum age for online gambling is 21. He's merely following the law. Now if the minimum age for online gambling was 18, then his template would have read:

What I find most fascinating is how an individual's cred and character comes under blind & assumptive attack by people on the other side of the Internet who somehow feel threatened enough by this to warrant Googling him for ammo.

 

Minimum age for online gambling depends on the laws of your state. Online gambling sites can be stricter than your state laws but they cannot be more lenient. In my particular state, the legal age to gamble is 18 for everything (RI) so you can freely gamble at any online site provided it is legally operating in the US and allows you to be 18+. The age limitations and legal operating status are up to the user to determine, but don't think you can pull a fast one over on the IRS or the casino.

 

Didn't have to google him for ammo, considering he's been throwing posts in reddit: https://www.reddit.com/r/gaming/comments/7elin7/the_state_of_hawaii_announces_action_to_address/. The only question I have is, why did it take Star Wars, EA, and/or BF2 to push for this when this guy has been victimized already by far simpler games with a much more aggressive Skinner box mechanic?

 

https://kotaku.com/hawaii-state-rep-is-drafting-bill-barring-minors-from-b-1821136540

 

Lee, a member of the state House of Representatives who has also authored bills around climate change and gun control, says he downloaded Clash of Clans two years ago to pass time between meetings. In 2014, the freemium strategy mobile game generated a reported $650,000 per day.

 

“There’s no transparency at the outset of what they’re getting into”

 

“At one point,” Lee told me over the phone, “I started buying crystals. I ended up spending a few hundred dollars over the course of a few months.” Once he realized what he’d done, Lee deleted the game. He felt that the game’s microtransaction mechanics had snuck up on him without warning. And once he deleted Clash of Clans, he said, “there was no value left. It’s just money that’s gone.”

 

And so far, what I've read of his proposal wouldn't even prevent that since those mobile games don't really rely on loot box mechanics but on paying to speed up time. And they are far easier to overspend without even knowing it. Heck, my sister should know since my nephew racked up over $500 in charges playing one of those games on her phone. He was 2 years old, there's no way he was even cognizant of what he was doing, it was just a flashy button you hit to make more flashy buttons appear.

 

 

And yes my nephew now has his own phone he plays with that's locked out of all online stuff.

 

[GalacticKegger]

Minimum age for online gambling depends on the laws of your state. Online gambling sites can be stricter than your state laws but they cannot be more lenient. In my particular state, the legal age to gamble is 18 for everything (RI) so you can freely gamble at any online site provided it is legally operating in the US and allows you to be 18+. The age limitations and legal operating status are up to the user to determine, but don't think you can pull a fast one over on the IRS or the casino.

Yep. A huge hurdle in fixing this (in the U.S. anyway) is unifying the states to agree on measures since their legal ages and restrictions are all over the map.

Didn't have to google him for ammo, considering he's been throwing posts in reddit: https://www.reddit.com/r/gaming/comments/7elin7/the_state_of_hawaii_announces_action_to_address/. The only question I have is, why did it take Star Wars, EA, and/or BF2 to push for this when this guy has been victimized already by far simpler games with a much more aggressive Skinner box mechanic?

 

https://kotaku.com/hawaii-state-rep-is-drafting-bill-barring-minors-from-b-1821136540

EA's blatancy being called out on such a massive scale was the break he, and others who have been pursuing this, had been waiting for. Other titles under scrutiny aren't being forgotten and will serve as additional matter. But they needed a headliner to blow their investigations wide open. Battlefront 2 delivered that to them on a silver platter.

And so far, what I've read of his proposal wouldn't even prevent that since those mobile games don't really rely on loot box mechanics but on paying to speed up time. And they are far easier to overspend without even knowing it.

Bioware got clobbered by players last year after introducing CXP with KotET. Knowing it was a huge grind their first order of business was to promote CXP boost sales in the Cartel Market. That is more about lowdown underhanded gouging than gambling though.

 

Speaking of which, here is a real beauty courtesy of Activision (quoted to make it easier to read):

"United States Patent 9,789,406 October 17, 2017

 

System and method for driving microtransactions in multiplayer video games

 

A system and method is provided that drives microtransactions in multiplayer video games. The system may include a microtransaction arrange matches to influence game-related purchases. For instance, the system may match a more expert/marquee player with a junior player to encourage the junior player to make game-related purchases of items possessed/used by the marquee player. A junior player may wish to emulate the marquee player by obtaining weapons or other items used by the marquee player.

 

Applicant: ACTIVISION PUBLISHING, INC. Santa Monica CA US

Assignee: Activision Publishing, Inc. (Santa Monica, CA)"

 

http://patft.uspto.gov/netacgi/nph-Parser?Sect2=PTO1&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=1&f=G&l=50&d=PALL&RefSrch=yes&Query=PN/9789406

 

But one thing at a time. Putting real money down to play a game of chance is, by pure definition, gambling. And it's not just Battlefront 2. STO, NWO and even Rocket League are coming under fire for indirect loot box gambling. Not for the RNG loot boxes themselves (that players can earn simply by playing), but in charging for keys that open them. Those games dole out way more crates & boxes than they do keys. Rift's Supply Crates are garnering some attention, as well as Wildstar's Madame Fay for being a possible pay-to-play slot machine mini-game. These barely scratch the surface.

Heck, my sister should know since my nephew racked up over $500 in charges playing one of those games on her phone. He was 2 years old, there's no way he was even cognizant of what he was doing, it was just a flashy button you hit to make more flashy buttons appear.

 

And yes my nephew now has his own phone he plays with that's locked out of all online stuff.

Ouch! I'm really sorry to hear about your nephew, but am glad your sister has it handled. You got a smart sis.

 

Ideas that are being tossed around for fixing this are almost as convoluted as the mechanisms themselves because of all the politics involved. For what it's worth I submitted a proposal that is being reviewed, though I'm finding it's not as simple to get forwarded as I was hoping because of said politics.

 

In real life, people get ID'd (carded) for tobacco and liquor purchases. The digital equivalent is the mobile device touch ID system like the thumb print verification used to approve app purchases from the Apple store. Many game companies are already employing 2-step verification using mobile devices at login to deter account (and identity) theft. This same 2-step verification system with touch ID as its login credentials could be used to digitally ID buyers, check them against items tagged for "gambling" then disable the ability to purchase those tagged items before they're even selected if Touch ID determines that the buyer is underage.

 

It's implementing that "gambling" tag that comprises the real war as big game companies (who loathe both transparency and code inspections) essentially own the ESA, which in turn means they also own the ESRB. Leaving the video game cartels to police themselves was a bad idea. This is a pretty deep rabbit hole.

Edited December 12, 2017 by GalacticKegger

[Draqsko]

Yep. A huge hurdle in fixing this (in the U.S. anyway) is unifying the states to agree on measures since their legal ages and restrictions are all over the map.

 

Oh I agree with that, just don't agree with the minimum age being 21+ when in most states you can buy lottery and scratch tickets at 18 years old, and some states even allow 16+ for high stakes bingo. Or as I said earlier, that somehow you are old enough to make a responsible choice to risk your own life or take another's in service to your country, yet are not old enough to make a responsible choice about video games. Feel the same way about alcohol but that boat sailed long ago, at least they got tobacco right though.

 

And I'll always feel that way, if you are adult enough to be able to choose to risk your life defending my freedoms, then you should be adult enough to enjoy those same freedoms yourself. If they want to legislate restrictions to 21+, then they should legislate the ability to be tried as an adult, and join the military to age 21+ as well, otherwise 18+ is considered the legal age of adulthood and where they should aim with this legislation.

[GalacticKegger]

Oh I agree with that, just don't agree with the minimum age being 21+ when in most states you can buy lottery and scratch tickets at 18 years old, and some states even allow 16+ for high stakes bingo. Or as I said earlier, that somehow you are old enough to make a responsible choice to risk your own life or take another's in service to your country, yet are not old enough to make a responsible choice about video games. Feel the same way about alcohol but that boat sailed long ago, at least they got tobacco right though.

 

And I'll always feel that way, if you are adult enough to be able to choose to risk your life defending my freedoms, then you should be adult enough to enjoy those same freedoms yourself. If they want to legislate restrictions to 21+, then they should legislate the ability to be tried as an adult, and join the military to age 21+ as well, otherwise 18+ is considered the legal age of adulthood and where they should aim with this legislation.

This really needs to be a two pronged assault: (1) eliminate the video game Cartels' predatory gambling practices by having the ability for minors to wager real money on chance removed from their games, and (2) make the minimum age for gambling 18 across the board.

 

Representative Lee's been focusing on working with other state legislators to take on the predatory gambling practices problem. It will take another complimentary campaign to get the minimum ages for alcohol, tobacco, firearms & gambling all changed to 18. Each state's myriad earmarks that were lobbied for, which shaped their minimum age and restriction requirements, will have to be addressed and their sponsors brought on board as well. Both are long roads.

 

As far as how we can help ... find a civic leader who is underwriting a similar plan and support them. If none exist then search for one who will. Write your Congressperson. Hell ... create a petition. One individual won't change anything. But an army of united individuals will, and it starts with the first one. No monopoly is untouchable.

Edited December 14, 2017 by GalacticKegger