I. Introduction

Elijah Ballard was by all means an ordinary 12-year-old kid who enjoyed playing video games in his free time.[1] He downloaded the multiplayer video game Counter Strike: Global Offensive (CS:GO) and enjoyed playing and talking about the game with his friends in school.[2] A year later, the game introduced the “Arms Deal” update, which included cosmetic items that players could obtain by opening loot boxes costing about $2.50.[3] Loot boxes are items players can purchase in-game with real-world money that contain a random item.[4] Once a player made a purchase, they were granted with the visual of a slot machine, spinning with in-game items varying in rarity and value across the screen until the player rolled on an item.[5] Soon enough, Elijah began engaging with a loot box economy worth approximately $15 billion in the United States alone.[6] At his worst, Elijah was down $10,000.

CS:GO is only one of many games to sell loot boxes,[7] and Elijah’s story is just one of an untold number about children who have fallen victim to the addictive cycles associated with loot boxes.[8] Research has since been published showing that the psychological stress incurred on those who purchased loot boxes is like the stress incurred by gambling.[9] A 2022 study from Australia and New Zealand found that players that bought loot boxes “were at 1.87 times the risk of experiencing severe distress than non-purchasers.”[10] Researchers attribute stress to the randomness of rewards from loot boxes as well as the audio and visual cues associated with opening loot boxes.[11] Elijah was no extraordinary case; rather, his story exemplifies how loot boxes are designed to trigger reward systems in the brain to keep them spending money.[12]

Currently, loot boxes are treated the same as any in-game purchase using real-world money.[13] The courts have yet to determine whether loot boxes can be legally viewed as a sort of gambling, but it could be argued that the qualities of a loot box fit the federal definition of gambling.[14] This note will analyze whether loot boxes should be classified as gambling under current federal laws, examining the history and development of loot boxes, their rise in prevalence in the gaming industry, how the courts have answered questions adjacent to the issue of gambling, and potential solutions.

II. The History of Loot boxes

A. What is a Loot Box?

Loot boxes are items players can purchase in video games with real-world money that contain a random item. Some loot boxes can also be purchased with virtual currency attainable through gameplay.[15] The price of opening loot boxes and the value of their items vary, but for all loot boxes the specific contents are unknown until they’re opened.[16] Upon opening a loot box, the player is usually greeted with an animation displaying the opening of the virtual box, often depicting a slot machine.[17]

The loot box mechanic was first introduced in 2007 in a game called Zhengtu Online.[18] Zhengtu Online was a free-to-play video game, and the developers introduced loot boxes to provide a consistent revenue stream.[19] It took only three years for loot boxes to find their way into Western markets, with Valve Corporation’s Team Fortress 2 (TF2) adding them to their game in 2010.[20] For $2.50, players could buy a virtual key that could be used to open a TF2 loot box.[21]

Loot boxes are not the only content players can purchase within a video game with real-world money. For example, downloadable content (“DLC”) commonly refers to a type of in-game purchase where players spend real-world money to purchase new gameplay content.[22] DLC, unlike loot boxes, guarantees a thing of value in exchange for money, the thing of value usually being some form of extended gameplay. So, when a player purchases DLC, there is no degree of risk that what is purchased is anything other than what was promised.[23] The game “Fallout: New Vegas,” for example, offers DLC that includes new missions and new areas for the player’s character to explore.[24] If a player purchases the “Lonesome Road” DLC for $4.99, they will receive new in-game content, including missions and new explorable areas, with no chance of receiving something else.[25] The degree of randomness is distinctive of loot boxes.[26]

B. The Popularity of Loot Boxes

In 2020, over $15 billion in the U.S. was spent on loot boxes across the gaming industry, with projections that $20 billion will be spent on loot boxes in 2025.[27] Some players may be driven to unbox items that will give them a competitive advantage in multiplayer games, whereas others may be solely enticed by the market of in-game cosmetics. One of the most well-known markets for loot box items is the Steam Community Market, owned by Valve, where users can buy and sell goods at a 10% tax that goes to Valve.[28] Players can add funds in their Steam account wallet; however, funds cannot be exchanged for money back into player’s bank accounts.[29] Valve permits and regulates exchanges made within the community market, but forbids the exchange of loot box items for real-world money.[30]

Valve’s policies forbidding the exchange of items for real-world money has yet to be enforced against the dozens of third-party websites that currently exchange items for money.[31] The Polish website Bitskins.com buys and sells loot box items, transferring funds directly via PayPal or Bitcoin. These sites have not gone unnoticed by the gaming community.[32] YouTube content creator Ludwig Lagerstedt posted a video titled “HOW TO WITHDRAW MONEY FROM STEAM (2022)” outlining how to make these kinds of transactions, and which has attained over 300,000 views.[33] However, though the gaming community is aware that these markets exist, the exact amount of money that flows within them is unknown.

C. Potential Psychological Harm

While the courts have given conflicting rulings on issues surrounding loot box’s potential gambling status, the scientific research into the harm associated with loot boxes has been relatively clear. Despite loot boxes being a relatively new form of in-game purchase in the history of video games, many scientists have already expressed concerns regarding the psychological impacts of loot boxes, particularly on children.[34] A report from the Royal Society Open Science Journal found a link between loot box spending and gambling problems from adolescents aged 16-18.[35] A significant positive correlation was found between spending and gambling severity, and the correlation was found to be twice as strong in adolescents compared to adults.[36] The report surveyed over 1,000 adolescents, examining behaviors associated with the opening of different types of loot boxes.[37] Games that randomly gave free loot boxes or advertised limited-time loot boxes revealed an increased association.[38] Negative behaviors ranged in severity among participants, but among them were anxiety, impulsivity, depression, and suicidal thoughts.[39]

In 2019, David Zendle and Paul Cairns presented evidence to the U.K. Parliament showing a link between gambling problems and loot box purchases.[40] Researchers surveyed 7,422 adults and found strong evidence of a link between loot box spending and gambling problems.[41] The study did not determine whether loot boxes were a gateway to gambling but made it clear that the negative effects of loot box spending were analogous to those brought on by gambling.[42] The report reflected the growing popularity in the U.K for increased loot box regulations, with former U.K. Prime Minister Boris Johnston investigating the potential need for greater regulations in the subsequent report “Gambling Harm: Time for Action.”[43]

The findings from the Royal Society Open Science Journal and the U.K. report were mirrored in a meta-analysis done by researchers in Australia.[44] The study’s findings contrasted loot boxes with other forms of DLC, finding that the negative psychology incurred by loot boxes are not seen in other types of purchases.[45] The researchers hypothesize that the randomized nature of loot boxes and the similarity in behavioral responses from loot box purchases to gamblers indicates the issue of loot boxes is unique from other in-game purchases.[46]

D. Current Responses

Though the United States has yet to answer the question whether loot boxes can be considered gambling outside of situations where the loot boxes are directly applied to an extension of gameplay, numerous other countries have considered loot boxes gambling and applied various regulations.[47] Belgium, for example, has banned loot boxes outright, considering them gambling regardless of their contents or whether they are an extension of gameplay.[48] Belgian law has been criticized for a lack of clarity as to what defines a loot box, as well as an alleged lack of enforcement of the laws.[49] The Netherlands implemented a similar loot box ban in 2022 in a broader effort to combat online gambling.[50] This bill was set into motion following complaints of loot boxes in the “FIFA” sports game franchise by Electronic Arts (EA).[51]

Of the other countries to have shown efforts to regulate loot boxes, most do not equate loot boxes to gambling like Belgium or the Netherlands and impose less severe restrictions.[52] China has passed laws targeting the lack of transparency behind loot boxes, requiring the odds of items to be fully disclosed before the player decides to open them.[53] Japan, meanwhile, has implemented bans since as early as 2012 on a specific type of loot box system in which the purchasing and opening of loot boxes is required for game progression.[54]

III. Legal Landscape: Federal Laws, Case Law, and Other Regulations

A. Current Federal Laws on Gambling

Gambling is constituted by the placing of a bet, which is when a person stakes something of value based on the agreement that the outcome of a game of chance will cause them to receive something of value in the event of a certain outcome.[55] For example, players place a bet when they play a slot machine, as they pay money (that is, stake something of value) and can receive something of value in return depending on the outcome of the given spin, receiving a varied amount of money in return.[56] Gambling laws vary state by state, but federal regulations come into play for interstate commerce and foreign exchanges, and most state definitions are near-identical or heavily based on the federal definition.[57]

Bets placed over the internet constitute internet gambling, which has similar restrictions to other forms.[58] Revenue from internet gambling is subject to federal taxation if it is over $600, though some states may require a lower threshold or require additional gambling taxes.[59] Utah and Hawaii have an outright ban on internet gambling, it being banned in Hawaii since 1959 and in Utah since 2012.[60] People facing criminal charges related to gambling face different charges compared to crime involving other exchanges.[61]

B. Case Law

Loot boxes are not currently considered gambling in any U.S. jurisdiction, and there has yet to be a case that directly answers the question of whether loot boxes can be classified as gambling.[62] Still, some cases tangentially address the gambling issue. In 2018, the Ninth Circuit Court of Appeals found in Kater v. Churchill Downs Incorporated that an in-game currency, regardless of whether it can be exchanged for money, can be considered a thing of value when determining whether a bet took place.[63] And, though Kater does not reference loot boxes, it could be considered precedent in a future case deciding whether the purchase or contents of loot boxes can be considered gambling despite lacking monetary value.

In Kater, plaintiff Cheryl Kater was a player of the mobile game “Big Fish Casino,” owned by Churchill Downs.[64] Kater sued Churchill Downs for allegedly violating Washington's Recovery of Money Lost at Gambling Act (RMLGA).[65] Kater had lost over $1,000 playing Big Fish Casino, a virtual casino game where users can spend real-world money to buy virtual chips that can be used to play in-game slots with which they can win more chips.[66] Players get a few free chips every day and can purchase more if they do not want to wait to play.[67] To answer whether a violation occurred, the court had to first determine whether Big Fish Casino fell within the purview of an illegal gambling game, and if so, whether Kater could recover the value of her lost in-game currency.[68]

Regarding the first issue, the courts held that Big Fish Casino qualified as gambling.[69] The operative point of contention in the gambling test between the parties was whether the in-game chips could be considered objects of value.[70] Churchill Downs argued that since the chips had no monetary value, they should not be considered objects of value under the gambling test.[71] The plaintiff contended that the gambling test did not require the determination of value to consider monetary value.[72] Players needed chips to play the various chance-based games like slots or blackjack.[73] The plaintiff argued that, assuming that extended access to the gameplay was considered valuable by the user base (especially considering users’ willingness to pay to extend gameplay), the real-world value of chips was irrelevant. Furthermore, similar to how loot box items in Valve games can be traded on third-party markets for real life money, Big Fish Casino players can hypothetically exchange chips between accounts, opening the opportunity for players to purchase chips with real-world money off one another.[74] Churchill Downs maintained that the chips' clear lack of monetary value, as well as the game itself being free-to-play, prevented the chips from being objects of value.[75] The lower court had adopted Churchill Downs’ interpretation of the value test. But the Ninth Circuit sided with Kater, agreeing the game constituted illegal gambling, and therefore she was entitled to recover her losses pursuant to RMLGA.[76]

Kater does not answer the question whether loot boxes can legally be considered gambling. Casino games where the player is incentivized to pay real-world money to continue gameplay is distinct from a video game that offers the opportunity to purchase loot boxes that do not extend gameplay; however, the court’s view that things of no direct monetary value can still have value within the gambling test allows for a future case addressing the gambling issue.

Mai v. Supercell Oy takes a contrasting view on the value test, with the court writing that items of no monetary value could not be considered things of value for the gambling analysis.[77] Unlike Kater, Mai addresses games with loot boxes, not casino games in which the core gameplay is akin to gambling.[78] Mai alleged that the game development company Supercell engaged in unlawful and unfair conduct through the use of loot boxes in two games, Clash Royale and Brawl Stars.[79] In either game, players could purchase the in-game currency “gems” with real-world money.[80] Gems could then be used to buy playable characters, some of which had competitive advantages.[81] Both games are free-to-play but advertise the purchase of loot boxes. The district court held the plaintiff did not have standing because neither the gems nor the loot box items had monetary value and therefore could not be considered things of value in the gambling test. [82] Mai stands in opposition to Kater in its views on the value test. However, the case is currently up for appeal. The California Court of Appeals may overturn the district court’s ruling, giving hope to those in opposition to loot box’s current legal status.

C. Extralegal Regulation

The federal government takes a hands-off approach to regulating video games outside the purview of regulations that would apply to other forms of media like movies and television.[83] The Entertainment Software Ratings Board (ESRB) is a nonprofit organization that fills in the regulatory gaps for the federal government.[84] The primary issue the ESRB addresses is providing content ratings for video games.[85] ESRB requires developers to fill out a questionnaire regarding the maturity of their video game’s content, with a panel of at least three trained that evaluate the questionnaire’s accuracy with gameplay footage.[86] Content ratings scale from a rating of “E,” suitable for everyone, to “A,” only suitable for adults.[87] ESRB ratings are not required by law, but game companies and retailers almost uniformly require ESRB ratings for products to be sold.[88]

ESRB makes a note in the content rating whether games include the ability to purchase loot boxes.[89] The ESRB requires that games disclose whether games include loot boxes, mandating that “including random items” is stated in the rating, but this does not increase the maturity level of a game’s content rating.[90] Hypothetically, a game could have a content rating suitable for all ages that also discloses the availability of loot boxes. Federal laws do not require developers to disclose odds.[91] Still, publishers like Apple and Google require games with loot boxes to disclose odds, with smaller publishers following suit.[92]

IV. Potential Solutions

Though the courts have yet to answer the question whether loot boxes can be considered gambling, the text of the federal definition for bets as well as the decision in Kater considering in-game items as things of value supports the claim that they can be considered gambling. If the issue were to be viewed as gambling by the highest courts, what should follow such a ruling to alleviate the problems of loot boxes? Potential solutions are proposed below.

A. Stricter Age Verification

An immediate consequence of classifying loot boxes as gambling would be an increased age requirement for purchasing loot boxes. Currently, gambling age requirements are left to the state governments, and every state that permits gambling has the age limit set to either 18 or 21 years old.[93] A more serious form of age verification will need to become standardized for the purchase of loot boxes. More stringent age restrictions already exist for other matters, like how the federal Gun Control Act mandates the purchase of firearms be by adults.[94] The Gun Control Act generally necessitates that states require patrons to show at least one form of government-issued identification before purchasing a firearm.[95] States addressing a potential change equating loot boxes to gambling likely should not rely on existing methods for age verification, but should instead opt for more stringent age verification methods like those associated with the purchase of firearms. Increased age verifications for purchasing loot boxes, along with prominent scientific evidence showing the psychological harm associated with loot boxes, would likely decrease the amount of loot boxes purchased by adolescent gamers and thus reduce the overall harm incurred.

B. Loot Box Gambling Tax

Another consequence to this legal treatment of loot boxes would address how they are taxed by the states, as money spent or gained from gambling can be taxed at different rates.[96] At the federal level, any gambling winnings are taxed the same as ordinary income.[97] But if someone wants to legally gamble at a place like a casino, most states tax both the player’s winnings and the casino’s earnings at various rates (depending on the rate determined by the respective state’s tax code).[98] Under most circumstances, the contents of loot boxes do not have a monetary value that can be cashed out outside of the game, but a future tax could apply to the initial sale of loot boxes. The $15 billion plus in annual revenue from loot boxes could lead to a noteworthy increase in tax revenue if loot boxes were to be taxed at higher rates– though the overall sales of loot boxes would likely decrease with the standardization of loot box gambling restrictions.

The IRS already has guidelines and systems in place ready to track loot box spending.[99] Though the IRS has gone back and forth on whether they plan on actually tracking loot box sales and purchases, a court decision classifying loot boxes as gambling would not demand a revamping of how the IRS traces video game spending.[100] The framework for tracing such transactions in a hypothetical future where loot boxes were taxed at a higher rate like other forms of gambling, thus, would likely not place an excess strain on the IRS.[101]

With the potential for loot box taxes to be increased significantly if considered gambling, and with the IRS being capable of accurately tracking loot box spending, the total amount of money spent in the loot box economy may decrease. Game developers who wish to continue selling loot boxes could now only sell to adults, and loot boxes would become more expensive, likely decreasing consumer spending. Alternatively, for game companies that did not want the negative press associated with including gambling in their video game or did not want to lose revenue from the increased loot box taxes, they may choose to sell items directly with no degree of chance. Game developers have already followed in these footsteps, with the developer Supercell–the same developer in Mai–moving away from loot boxes in their game Brawl Stars in favor of an in-game item shop that does not include loot boxes.[102]

C. Changes to ESRB Ratings

The ESRB has demonstrated it has near-complete control over how content ratings are handled in the gaming industry. The ESRB would likely change its policies regarding how it considers loot boxes to affect a game’s content rating. That being said, the ESRB is a private organization that does not need to wait for a court ruling to change how it treats loot boxes in its rating system.[103]

In fact, the ESRB’s unique position of power should encourage them not to wait for the courts to come to the decision that loot boxes qualify as gambling, especially as it is not a guarantee such a ruling will ever occur. In several of the cases discussed in this note, lawsuits challenging the legality of loot boxes consist of starkly different qualities of representation between the plaintiffs and defendants. Often, these cases are brought about by concerned parents whose children spent a few hundred dollars on loot boxes, and they are trying to challenge multimillion and multibillion dollar gaming companies with greater resources who often retain lawyers better-equipped to illustrate the issue of loot boxes in a way most favorable towards the maintenance of the loot box legal status quo.[104]

The effects of the imbalance of representation in many loot box cases is further worsened by the courts’ lack of technical knowledge needed to rule on these kinds of cases. The general concept of what constitutes a loot box and the differences between various loot boxes is enough to make this a difficult problem to solve even for those with an understanding of loot boxes or video game economies. Could the average judge keep up with the nuances of loot boxes? In the Supreme Court case Gonzalez v. Google, a case addressing complicated issues surrounding the YouTube algorithm, the justices were given the power to potentially alter social media as we know it. How well did the justices understand the material? As Justice Elena Kagan said, “We really don’t know about these things. [We] are not like the nine greatest experts on the internet.”[105]

The ESRB could circumvent the issues of the courts and provide the public with a timelier solution to loot boxes. If a game was given an increased content rating because of its inclusion of loot boxes, or if there was a new content rating dedicated to games with loot box mechanics, the stigmatization could significantly decrease the amount of loot boxes purchased, certainly by adolescents. Some parents would inevitably purchase games with the new ESRB loot box warning regardless of the content label, but the total amount of loot boxes purchased by children would still decrease. Most importantly, news coverage surrounding the new hurdles associated with purchasing video games with the loot box ESRB label could introduce the public to the psychological harm associated with loot boxes, potentially decreasing the amount of loot boxes purchased by adults as well. This extralegal solution, an overhauling of the ESRB rating system, is likely the most practical solution to address problems associated with loot boxes. Perhaps a collective concern about the dangers of loot boxes that would follow this solution would best influence a future court to consider loot boxes gambling.

V. Conclusion

The primary goal of this note was to shed light on the problems with loot boxes while providing solutions that minimizes the prevalence and harm of loot boxes. There is case law that supports the courts’ finding that loot boxes can be classified as gambling, especially if Mai is overturned and more courts recognize loot box contents as things of value. In the hypothetical future where the courts classify loot boxes as gambling, laws changed to how loot boxes are taxed and strict age verification systems could significantly reduce the harmful behaviors loot boxes facilitate, especially in children. As loot boxes become more stigmatized and the profit incentives become less and less attractive to game developers, loot boxes could become a relic of the unregulated markets of today.

With that being said, the complex legal battles of the future trying to classify loot boxes as gambling will not be the end-all-be-all solution. It is probable that the courts, with their admittedly limited knowledge of loot boxes and video games, will continue allow loot boxes to live in the legal gray zone they currently occupy. This is especially likely considering the economic incentive for game developers to hire teams of lawyers to fight these cases, going up against concerned parents whose children use their credit card to buy loot boxes. The fight against exploitative systems like loot boxes in the courts is an uphill battle, but it may not be one that has to be fought, thanks to ESRB and their ability to regulate loot boxes. If the ESRB were to take the psychological evidence and consumer concern of loot boxes into consideration, they could control the narrative for ridding loot boxes in video games through stigmatization.

Video games are a medium that allow 12-year-old kids like Elijah Ballard to spend their free time exploring fantasy worlds and completing quests, but they do not have to allow for loot boxes to introduce gambling to unsuspecting gamers.[106] What if video games could get rid of the exploitative loot box systems that have been shown to incur psychological harm akin to gambling?[107] What if tens of billions of unregulated dollars weren’t being made by these corporations that benefit off transactions like slot machines?[108] What if the United States followed in the footsteps of other countries that have condemned loot boxes or even moved to ban their sale?[109] Though the future for loot boxes in video games is uncertain, both the courts and private organizations currently have the power to step in and take action in the wild west of the loot box economy.

[1] Shaun Assael, Skin in the Game, ESPN (Jan. 20, 2017), https://www.espn.com/espn/feature/story/_/id/18510975/how-counter-strike-turned-teenager-compulsive-gambler.

[2] Id.

[3] Skins, Counter Strike Wiki, https://counterstrike.fandom.com/wiki/Skins (last updated July 8, 2023).

[4] Andrew E. Freedman, What Are Loot Boxes? Gaming's Big New Problem Explained, Tom’s Guide (Feb. 27, 2018), https://www.tomsguide.com/us/what-are-loot-boxes-microtransactions,news-26161.html.

[5] Sparkles, OG Case Opening! (2013 Only), YouTube (Apr. 29, 2023), https://www.youtube.com/watch?v=_LI7MnubSQM.

[6] Video Game Loot Boxes to Generate Over $20 Billion in Revenue by 2025, but Tightening Legislation Will Slow Growth, Juniper Rsch. (Mar. 9, 2021), https://www.juniperresearch.com/press/video-game-loot-boxes-to-generate-over-$20-billion [hereinafter Video Game Loot Boxes].

[7] Assael, supra note 1.

[8] Id.

[9] See Aaron Drummond & James D. Sauer, Video Game Loot Boxes are Psychologically Akin to Gambling, 2 Nature Hum. Behav. 530, 530 (2018).

[10] Id.

[11] Id.

[12] Id.

[13] Freedman, supra note 4.

[14] See generally Jason Egielski, Don't Hate the Player, Hate the Game: Video Game Loot Boxes, Gambling, and a Call for Administrative Regulation, 50 Hofstra L. Rev. 175 (2021) (considering whether loot boxes can be considered gambling under current federal regulations).

[15] Id. at 177.

[16] Id. at 182.

[17] Id; see also Chris Bam Harrison, The User Experience of Lootboxes, Medium (Jan. 25, 2018), https://blog.prototypr.io/the-user-experience-of-lootboxes-fcfe92206a6b.

[18] theScore esports, What is a Loot Box? The Dangers Behind Gaming's Most Delightful Addiction, YouTube (Mar. 31, 2019), https://www.youtube.com/watch?v=qlTWHDsRCc8 (with 88,410 views as of May. 1, 2023).

[19] Id.

[20] Id.

[21] Id.

[22] See Mike Williams, The Harsh History of Gaming Microtransactions: From Horse Armor to Loot Boxes, VG247, https://www.vg247.com/the-harsh-history-of-gaming-microtransactions-from-horse-armor-to-loot-boxes (last updated Oct. 11, 2017).

[23] Id.

[24] Lonesome Road (add-on), Fallout Wiki, https://fallout.fandom.com/wiki/Lonesome_Road_(add-on) (last updated Dec. 10, 2023).

[25] Id.

[26] Freedman, supra note 4.

[27] Video Game Loot Boxes, supra note 6.

[28] Community Market FAQ, Steam Support, https://help.steampowered.com/en/faqs/view/61F0-72B7-9A18-C70B#withdrawfunds (last visited May 3, 2023).

[29] Id.

[30] Id.

[31] FAQ, Bit Skins, https://bitskins.com/info/faq (last visited May 2, 2023).

[32] Id.

[33] Anomaly 3, HOW TO WITHDRAW MONEY FROM STEAM (2022), YouTube (Jun. 7, 2022), https://www.youtube.com/watch?v=n7kSximJil8 (with 475,047 views as of Jan. 9, 2024).

[34] Drummond & Sauer, supra note 9.

[35] See David Zendle et al., Adolescents and Loot Boxes: Links with Problem Gambling and Motivations for Purchase, Royal Sci. Publ’g 1, 14-17 (2019), https://royalsocietypublishing.org/doi/pdf/10.1098/rsos.190049 (examining the psychological harm loot boxes cause on children).

[36] Id. at 17.

[37] Id. at 6.

[38] Id. at 15.

[39] Id. at 2-3.

[40] See David Zendle, Paul Cairns, Herbie Barnett & Cade McCall, Paying for Loot Boxes Is Linked to Problem Gambling, Regardless of Specific Features Like Cash-Out and Pay-to-Win, 102 Computs. Hum. Behav. 181, 190 (2020) (finding a correlation between purchasing loot boxes and negative behaviors associated with gambling).

[41] Id.

[42] Id.

[43] Select Committee on the Social and Economic Impact of the Gambling Industry, Gambling Harm--Time For Action, 2019-21, HL-79, at 115 (UK) (recommendations for stricter loot box regulations to British parliament).

[44] Zendle, supra note 40.

[45] Id.

[46] Id.

[47] Esports and Games: Legal Considerations for Loot Boxes, Sheppard Mullin, https://www.mygamecounsel.com/wp-content/uploads/sites/32/2020/11/Legal-Considerations-for-Loot-Boxes-1120.pdf (last visited Jan. 9, 2024).

[48] Id.

[49] Id.

[50] The Ultimate Loot Drop: The Netherlands is Planning to Ban Loot Boxes in Video Games, Clifford Chance (Sept. 6, 2022), https://www.cliffordchance.com/insights/resources/blogs/talking-tech/en/articles/2022/09/the-ultimate-loot-drop-the-netherlands-is-planning-to-ban-loot.html.

[51] Id.

[52] Esports and Games, supra note 47.

[53] Nicholas Straub, Every Country with Laws Against Loot Boxes (& What The Rules Are), Screen Rant (Oct. 5, 2020), https://screenrant.com/lootbox-gambling-microtransactions-illegal-japan-china-belgium-netherlands/.

[54] Id.

[55] 31 U.S.C. § 5362.

[56] How Slot Machines & Coin Slots Work, Vegas Slots Online, https://www.vegasslotsonline.com/work/ (last visited May 5, 2023).

[57] A History of American Gaming Laws, HG.org, https://www.hg.org/legal-articles/a-history-of-american-gaming-laws-31222 (last visited April 7, 2024).

[58] 31 U.S.C. § 5362.

[59] Legal Gambling vs. Illegal Gambling, HG.org, https://www.hg.org/legal-articles/legal-gambling-vs-illegal-gambling-49748 (last visited April 7, 2024).

[60] Art Raymond, Online Gambling Has Exploded Amid Pandemic, so how do You Enforce the Law and Fight Addiction?, Deseret News, (Feb. 20, 2021, 9:00 PM), https://www.deseret.com/utah/2021/2/20/22249185/online-gambling-exploded-covid-19-pandemic-what-mean-utah-las-vegas-wendover-casinos-addiction (discussing state-level bans on internet gambling).

[61] 31 U.S.C. § 5362.

[62] Egielski, supra note 14, at 188.

[63] 886 F.3d 784, 788 (9th Cir. 2018).

[64] Id. at 785.

[65] Id. at 786.

[66] Id.

[67] Id. at 785-86.

[68] See id. at 787-88.

[69] Id. at 788.

[70] Id.

[71] Id. at 787.

[72] Id. at 785-86.

[73] Id. at 787.

[74] Id. at 786.

[75] Id. at 788.

[76] Id.

[77] No. 5:20-cv-05573-EJD, 2021 U.S. Dist. LEXIS 178949, at *1-2 (N.D. Cal. Sept. 20, 2021).

[78] Id.at *2

[79] Id.

[80] Id.

[81] Id.

[82] Id. at 6-8.

[83] Egielski, supra note 14.

[84] About ESRB, Ent. Software Rating Bd., https://www.esrb.org/about (last visited May 2, 2023).

[85] Id.

[86] Id.

[87] Id.

[88] Id.

[89] Stephen Duetzmann, The ESRB Rating System: What Parents Need to Know, Engaged Fam. Gaming (Feb. 18, 2023), https://engagedfamilygaming.com/parent-resources/the-esrb-rating-system-what-parents-need-to-know/.

[90] Id.

[91] See Fed. Trade Comm’n, FTC Video Game Loot Box Workshop (2020).

[92] Id.

[93] Bart Shirley, Legal Gambling Age by State, Play USA (Aug. 30, 2022), https://www.playusa.com/us/gambling-age/.

[94] 18 U.S.C. § 922(b)(1)-(2); 27 C.F.R. § 478.99(b).

[95] Frequently Asked Questions, State of Cal. Dep’t of Just., https://oag.ca.gov/firearms/dlrfaqs (last visited May 2, 2023).

[96] Ginita Wall, Gambling Winnings Tax (How Much You Will Pay for Winning?), Intuit (Apr. 10, 2023), https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/.

[97] See id.

[98] Id.

[99] Brian Fung, IRS Quietly Deletes Guidelines That Fortnite Virtual Currency Must Be Reported on Tax Returns. CNN Business (Feb. 14, 2020, 1:59 PM), https://www.cnn.com/2020/02/13/tech/fortnite-taxes/index.html.

[100] Id.

[101] Id.

[102] Evgeny Obedkov, Supercell Pulls Loot Boxes from Brawl Stars to Make Things “More Fair and Predictable” for Players, Game World Observer (Dec. 13, 2022), https://gameworldobserver.com/2022/12/13/brawl-stars-loot-boxes-removed-supercell.

[103] About ESRB, supra note 84.

[104] See, e.g., Mai v. Supercell Oy, No. 5:20-cv-05573-EJD, 2021 U.S. Dist. LEXIS 178949 (N.D. Cal. Sept. 20, 2021).

[105] Mack DeGeurin, Supreme Court Justices Admit They Don't Know Much About Social Media, Gizmodo (Feb. 21, 2023), https://gizmodo.com/google-gonzalez-supreme-court-justices-dont-know-social-1850141373.

[106] Assael, supra note 1.

[107] Drummond & Sauer, supra note 9.

[108] Video Game Loot Boxes, supra note 6.

[109] Straub, supra note 53.