IMGL Magazine November 2022

Loot box regulation

These are two basic but fundamental aspects, which bring responsible gaming characteristics to the product, making it safer to the user. To evaluate the effectiveness of the regulation, it is necessary to consider how this product will evolve in the coming years, and whether the regulation covers all the scenarios that may arise in the future. In our view it is essential to transfer knowledge obtained in the online gaming sector to the regulation of random reward mechanisms in order to anticipate any problems that may arise. In this sense, it could have been prudent to establish not a full licensing regime but some sort of authorization or registry for companies offering loot boxes in Spain. The single additional provision establishes that natural or legal persons that are authorised to carry out gambling activities included in Act 13/2011 cannot exploit or commercialise random reward mechanisms. Furthermore, art. 7.3 of the Bill establishes that random reward mechanisms may only be disseminated on websites or channels whose main activity consists of offering information or content on games regulated by the Spanish Gaming Act 13/2011. Considering the emphasis on responsible gaming in the new gambling regulations, besides the rights of users set out in the Bill, it would also have been appropriate to establish certain obligations on the company. These could include verification of the source of players’ funds, or the right to prohibit the use of the loot box product if there are concerns related to responsible gambling. Some of the rights granted to the user under the draft Law are set out in articles 8 a), b), and (g). These articles contain the right of users (i) to obtain clear and truthful information on the conditions for participation arising from random reward

mechanisms, (ii) to obtain clear information on the probability of obtaining the different virtual objects, and (iii) the prohibition of mechanisms which alter the probabilities of obtaining any given virtual item. In our view, these aspects are essential, but one aspect has not been included which would have ensured accuracy and certainty of information and probabilities. The gold standard would have been to place an obligation on the company to have its software certified, and, as happens with gambling products, to file such a certificate before the DGOJ, which should also give formal approval to the product. Such certification would act as a guarantee for users as well as ensuring their rights were fulfilled. CONCLUSION Loot boxes have become a headache for EU regulators given the implications involved. With this Bill, Spain has become the first jurisdiction to take a step forward in relation to their regulation. The Bill includes several provisions related to responsible gaming policies (self-exclusion, time session, etc.). However, the text seems to avoid other key aspects, like the verification of the origin of the player’s funds or the certification of the random reward mechanism, which we consider could notably improve the current Bill. Finally, we need to take into account that whenever this regulation is approved by the Congress, it will be under the legislative form of an Act. This is the right approach as several elements contained within it will require a sanction regime. However, there are other aspects or details within the regulation that could have been left to a secondary text developing the Act (decree, ministerial order, etc.). As it is, any amendment or addition to the final Bill will also require the approval of the Spanish Parliament.

Carlos Jimenez Ascanio is a lawyer with Asensi Abogados. + 34 (0) 971 90 92 19 santiago@asensi.es

Santiago Asensi is founder and managing partner of Asensi Abogados

IMGL Magazine • November 2022 • 37

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