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Gaming 'loot boxes' linked to problem gambling

Gamers who purchase 'loot boxes' - digital treasure chests filled with random items that you buy in games using real-world currency - are more likely to have a problem with gambling, according to new research. A study published in <a href="https://doi.org/10.1080/16066359.2022.2141717" target="_blank" rel="noopener">Addiction Research & Theory</a> has found that 57 percent of adults surveyed who had bought loot boxes had gambled in the same year, compared to 37 percent of a control group who hadn't bought the virtual items. While previous studies have found a link between loot box purchasing, gambling and problem gambling, this study explored whether this link was due to psychological risk factors for gambling, such as childhood neglect, emotional distress, and the tendency to act rashly when upset. After analysing the purchase history and questionnaires of 1,189 Canadian university students, along with 499 adults recruited from the community, they found that a similar proportion of the students and adults had bought loot boxes, with an average spend between $90.63 and $240.94 respectively. Among the students, 28 percent of loot box-purchasers also gambled, in comparison to 19 percent of those who hadn't bought any loot boxes. Students who reported buying more loot boxes and other 'riskier' habits were also more likely to have a gambling habit. While this wasn't seen in the adult group, the authors argue this may be due to the small sample size. "Findings indicate that loot box purchasing represents an important marker of risk for gambling and problem gambling among people who play video games," Sophie Coelho, a PhD student at Toronto’s York University, said. "The persistent associations we observed between loot box purchasing and gambling may provide preliminary support for the role of loot boxes as a 'gateway' to gambling and eventually problem gambling. "Loot boxes may prime people to gamble and increase susceptibility to problem gambling." As for the role of gambling risk factors, the authors found that adverse childhood experiences, like abuse and neglect, were "most consistently associated with an increased likelihood of past-year gambling and greater problem gambling". They concluded that those with troubled upbringings have a "heightened vulnerability" to develop a gambling problem. “This may be compounded by engaging with gambling-like features embedded in video games, such as loot boxes," they added. Loot boxes, also called loot or prize crates, have become the subject of controversy recently, with concerns that their use of random chance to give players randomised weapons, armour, and items they can use to customise their character could be a form of gambling. In some games, loot boxes became a way to “pay to win”, with items that can affect gameplay and offer a competitive advantage, driving players to pay for more loot boxes to get items that allow them to compete with other players. Some countries have begun to introduce laws to regulate loot boxes, with Belgium and the Netherlands banning loot boxes altogether. In Australia, a law to restrict the use of loot boxes in games aimed at children has been proposed which could see games with loot boxes given a rating of R18+ or RC (“Refused Classification”, so they can't be sold in Australia) and carry warning labels. Image: Sameboat, CC BY-SA 4.0 (Wikimedia Commons)

Money & Banking

Woman shares why she planned to sue after winning multi-million dollar jackpot

A UK woman who won over a million dollars through the lottery has described it as a “twisted fairytale” rather than a dream come true. Jane Park, who won the £1 million Euromillions lottery in 2013, said winning big isn’t all it’s cracked up to be, revealing that she has been blackmailed and threatened with violence ever since, per <a href="https://www.thesun.co.uk/money/19570621/jane-park-lottery-pleas-money-strangers/" target="_blank" rel="noopener">The Sun</a>. “The lottery should come with a health warning similar to smoking or drinking,” she said. “I understand they can’t make winning sound awful but they have a responsibility to not mislead the public.” After threatening to sue Camelot, the company that sold her the fateful ticket when she was just 17, prompted changes preventing those under 18 from having a gamble, she said the change doesn’t go far enough. Ms Park also wants ads for the game to be aired later at night - rather than during time slots that kids will be watching - and thinks that Lotto chiefs shouldn’t wait until someone wins to warn players of what’s in store. “The adverts should be aired later in the evening and advertising should be out of the way from children,” she said, “It sounds silly but children dream of either being famous or winning the lottery, and if it wasn’t so glamorised maybe there would be more ambition rather than gambling. “People always refer to the lottery as ‘playing the lottery’, but it’s not ‘playing’, it’s just plain gambling, apart from picking some number there is no game element to it. “How it wasn’t held to the same legislation as gambling from the beginning baffles me.” Ms Park revealed that she is bombarded with pleas for help in the form of cash from strangers and that she’s even proposed to on a weekly basis. “It may be parents with terminally-ill children or needing life-changing surgery. Uni students want me to pay for their education,” she explained. “I also get a lot of marriage proposals, I’d say I get at least one a week. It’s not from anyone interested in me, it’s from people interested in the money.” The Edinburgh native has previously spoken about her fight to increase the age limit, which she had planned to take to court until her cause became the subject of media attention. “I was prepared to go to court to get my argument known, but the media attention it received got my point heard by the right people and I didn’t need to go that far in the end,” she explained. “I know that is directly because of the attention I brought to the subject. “Part one of my mission was to have the age range increased, part two is to try and make advertising the lottery more truthful.” She added that it’s “wrong” that the lotto is glamorised as “dream come true money”, when in reality she described it more as a “twisted fairytale” where strangers ask about her bank balance daily. “I’m proud that I have invested my money wisely and nine years later I’m still living a good life,” she said. “It just feels like people are waiting for the day I become broke and homeless, but I won’t let that happen.” A spokesperson for the Department of Media Culture and Sport said the law was changed so that only those over the age of 18 could take part in the National Lottery, up from the previous minimum age of 16. “The National Lottery is regulated by the Gambling Commission and we will not hesitate to act further if we consider it necessary,” they said. Image: @janeparkx (Instagram)

Money & Banking

Woman's $940k theft from vet hospital to play pokies app

A woman has pleaded guilty to stealing $940,000 from her employer, after using the funds to fuel her addiction to an online gambling game that doesn’t pay out real money. Tasmanian woman Rachel Naomi Perri appeared before Hobart’s Supreme Court on Monday facing 25 charges of computer-related fraud and one count of fraud. Ms Perri, 49, stole the money over the three years she worked at the Tasmanian Veterinary Hospital as an account manager. The “anomalies” in bank transactions were only discovered after Ms Perri was made redundant. The full extent of her theft was uncovered after a full investigation. Crown prosecutor Simone Wilson told the court that Ms Perri made 475 fraudulent transactions over the course of three years and four months, with the final amount totalling $940,221. Ms Wilson told the court that Ms Perri was the only person managing the hospital’s bank accounts and transferred money from the accounts to a variety of credit cards, personal loans, and other bank accounts in her name. Police also discovered that Ms Perri had fraudulently taken out a $30,000 credit card in her husband’s name in 2015, racking up $24,000 in debt without her husband’s knowledge. When she was interviewed by police in 2019, Ms Perri “immediately said, ‘I’m guilty’.” The court heard that Ms Perri told police she had been playing a game called Heart of Vegas for the past four years, which is where all of the money had gone. “It is similar to playing pokies and you shop to purchase coins or credits,” Ms Wilson told the court. “[But the] credit purchased never turned into actual money. She couldn’t explain why she was playing that game when there was no return.” Heart of Vegas claims to feature “real Vegas slot machines just like the ones you know and love”. Its terms and conditions also state that players “may be required to pay a fee to obtain virtual items”, but that “virtual items may never be redeemed for ‘real world money’”. Ms Wilson read out Ms Perri’s interview with police to the court and said she was in her “own little world” while playing. “I got myself into so much trouble but decided I’d keep going until [I] got caught,” she <a rel="noopener" href="https://www.abc.net.au/news/2021-11-23/woman-pleads-guilty-to-stealing-940k-from-her-workplace/100639450" target="_blank">said</a> in the record of the interview. “I knew I couldn’t get away with it. I was waiting for a knock on the door from police.” Greg Barns, Ms Perri’s lawyer, told the court that the accused had a “lengthy history of gambling” that started when she turned 18 in Launceston. “She began to use poker machines and she won $26 from placing a dollar into a machine and, as she described it, it went from there,” he told the court. Mr Grant said his client had moved from Launceston to Hobart for a fresh start, but began gambling 2008-09. “She described spending consecutive hours on poker machines,” he said. “One session she spent 16 hours continuously playing on the machine.” When Ms Perri discovered Heart of Vegas, Mr Barns said she became so addicted that she would keep spending money just to “keep playing the game”. “She got so addicted that she’d play it first thing in the morning,” he told the court. “She would set it up at night so it played in auto.” Ms Perri was diagnosed as having a severe gambling disorder by forensic psychiatrist Dr Michael Jordan. “He considered that Perri’s gambling disorder was the most significant factor in her fraud activity,” Mr Barns told the court. “[Her gambling was mindless, with no hope of any financial gain.” Mr Barns told the court that Ms Perri voluntarily entered therapy and would need to continue once she was in prison. He said it was unlikely that his client would be able to pay back the veterinary services, after they instituted civil proceedings to recover the money. Ms Wilson said the accused’s behaviour was “planned” and “calculated”, and that she only stopped because she was made redundant. “The prospects of her recovering are slim to non-existent,” she told the court. Ms Perri has been remanded in custody until she is sentenced next month. Image: Getty Images

Legal

Gaming or gambling: study shows almost half of loot boxes in video games constitute gambling

<div class="copy"> The Australian Senate has <a href="http://trade-media.com.au/news/read/australian-senate-passes-motion-investigate-loot-boxes/">passed a motion to investigate</a> whether purchasable random rewards in video games (known colloquially as loot boxes) constitute a form of gambling and whether they are appropriate for younger players. Our recent <a href="https://rdcu.be/ZXTg">paper</a>, which was cited in the senate motion, explores exactly these questions. We found that the loot boxes in almost half (45%) of the 22 games we analysed met the criteria to be considered psychologically similar to gambling, even though they are rated as appropriate for adolescent players under the age of consent for gambling. <h2>What is a loot box?</h2> Loot boxes are digital containers of randomised rewards, and are available in a number of video games. The box may contain rewards ranging from cosmetic items which alter the appearance of in-game characters to functional items that increase the player’s power in some way (for example a gun that fires faster or does more damage). In our research, we sought to answer two questions: are loot boxes like gambling and, if so, what should be done about it? First up, we want to clarify that video games are not evil. Games companies are not evil. Making money from video games is not evil. And playing video games with loot boxes is unlikely to result in young people flocking in great numbers to casinos. However, simultaneously, it may also be true that loot boxes represent a troubling and potentially inappropriate monetisation strategy, with the potential to cause short and long-term harm to some players. Our intent is to educate readers about loot box mechanisms, and promote a reasoned, evidence-based discussion about ethical practice in video games. Loot box rewards may be highly desirable or valuable (for example, a particularly valuable cosmetic item or very powerful weapon), or virtually useless and undesirable (items referred to as “vender trash”). Most importantly, the contents of the box are determined by chance. Some (but not all) loot boxes are purchasable for real money. In some cases, items earned from a loot box can also be “cashed out” for real world money. <h2>The gambling problem</h2> The problem is that spending real money on a chance outcome that results in some people “winning” and others “losing” is fundamental to gambling activities. Thus, we analysed the loot box features in 22 console and PC games released in 2016 and 2017, with a view to understanding how psychologically similar they were to gambling. We used five criteria to distinguish gambling from other risk-taking activities. These have been developed by Nottingham Trent University psychologist <a href="https://www.ntu.ac.uk/staff-profiles/social-sciences/mark-griffiths">Mark Griffiths</a> in his work on behavioural addictions and gambling disorders. To be considered psychologically similar to gambling, loot boxes must involve: <ul> <li>an exchange of money or valuable goods takes place</li> <li>an unknown future event determines the exchange</li> <li>chance at least partly determining the outcome</li> <li>non-participation avoiding incurring losses</li> <li>winners gaining at the sole expense of losers.</li> </ul> We took a reasonably strict interpretation of the final criterion; assuming that people only “won” if they gained some form of in-game competitive advantage (for example more powerful weapons). Arguably, this approach ignores the subjective value that might be created by the scarcity of, or player preference for, certain cosmetic items. However, it appeared to us to most closely resemble Griffiths’ intent. Loot boxes in just under half of the games (45%) met all five of Griffiths’ criteria and, thus, could be considered psychologically akin to gambling. All of the loot boxes operated on a variable ratio reinforcement schedule – a technical term for a reward given to a person on average every so many times they engage in a particular behaviour. This type of reward schedule results in people quickly learning new behaviours (for example buying loot boxes) and repeating them often in the hope of receiving a <a href="http://journals.sagepub.com/doi/full/10.1111/j.1467-9280.1990.tb00220.x">reward</a>. The strategy is effective because the next time a box is opened it might be the “big win”. Perhaps most concerning was the fact that at least five of the games had mechanisms available to on-sell virtual items, allowing players to cash out their winnings (though four of these five had terms and conditions explicitly prohibiting this). The ability to cash out winnings is something that many consider a legal requirement for an activity to be considered gambling. Although the legality of loot boxes is a question for individual regulators and governments, exposure to mechanisms which closely mimic gambling in a psychological sense is concerning to us, especially since all of the games we examined were rated as appropriate for those under the age of consent for gambling. The short and long-term consequences of engaging with these mechanisms are unknown. Plausibly, short-term consequences may include overspending on loot boxes. The potential for long-term consequences also concerns us because males (a <a href="http://www.theesa.com/wp-content/uploads/2017/09/EF2017_Design_FinalDigital.pdf">particularly large group within gamers</a>) exposed to gambling when young are particularly at <a href="https://link.springer.com/article/10.1007%2Fs10899-008-9088-6">risk of developing problematic gaming behaviours</a>. <h2>What to do about it</h2> There is cause for hope. Electronic Arts (one of the largest game studios in the world) has recently announced the <a href="https://variety.com/2018/gaming/news/no-loot-boxes-anthem-1202838734/">removal of loot boxes</a> from upcoming titles. This suggests the games industry is taking consumer and expert feedback seriously, and may take steps to self-regulate. In our view, this is the optimal solution, given the diverse policy landscapes across the countries in which video games are sold. Where industry is not willing to self-regulate, and loot boxes are most similar to gambling, regulators may need to consider additional steps, although this should be undertaken selectively. Belgium and the Netherlands have <a href="https://www.eurogamer.net/articles/2018-04-25-now-belgium-declares-loot-boxes-gambling-and-therefore-illegal">declared at least some loot boxes to be illegal</a>, while the US and UK have decided that they are <a href="https://www.bbc.com/news/technology-43906306">not a form of gambling</a>. As noted above, the Australian Senate unanimously supported a vote on the 28th of June to refer an inquiry into the legality of loot boxes in video games to the <a href="http://trade-media.com.au/news/read/australian-senate-passes-motion-investigate-loot-boxes/">Environment and Communications References Committee</a>. Most importantly, we recommend that loot box mechanics should be added to content warnings to give users and parents the information they need to properly assess whether particular games are appropriate for themselves or their children. Ensuring that users can make well informed decisions about the appropriateness of content remains one of the strongest consumer defences. We hope that this work will form the basis for a well-reasoned, evidence-based policy discussion about ethical and sustainable practices in video games. Our intent is not to stigmatise games or gamers, but to spark a discussion about what mechanisms are and are not appropriate for particular audiences, games and the industry more broadly. Image credit: Shutterstock </div> <div id="contributors"> This article was originally published by <a rel="noopener" href="https://cosmosmagazine.com/people/social-sciences/gaming-or-gambling-study-shows-almost-half-of-loot-boxes-in-video-games-constitute-gambling/" target="_blank">cosmosmagazine.com</a> and written by The Conversation. </div>

Money & Banking

Why you should think twice before playing slot machines

Slot machines, video poker machines and other electronic gaming devices make up the bulk of all the economic activity in the gaming industry. At casinos in <a href="https://irgc.iowa.gov/sites/default/files/documents/2017/03/annual_report_2016.pdf">Iowa</a> and <a href="http://dor.sd.gov/Gaming/Industry_Statistics/PDFs/Stats%20by%20Denom%20for%20cy2016.pdf">South Dakota</a>, for example, such devices have contributed up to 89 percent of annual gaming revenue. Spinning-reel slots in particular are <a href="http://www.principlesofcasinomarketing.com/Introduction-to-Casino-Management.php">profit juggernauts</a> for most casinos, outperforming table games like blackjack, video poker machines and other forms of gambling. What about slot machines makes them such reliable money makers? In part, it has something to do with casinos’ ability to hide their true price from even the savviest of gamblers. The price of a slot An <a href="https://www.investopedia.com/terms/l/law-of-supply-demand.asp">important economic theory</a> holds that when the price of something goes up, demand for it tends to fall. But that depends on <a href="http://investinganswers.com/financial-dictionary/stock-market/price-transparency-3233">price transparency</a>, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them. Slots may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down. Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different. For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus from the management’s perspective, the “price” it charges is the 10 percent it expects to collect from gamblers over time. Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels and receives no payout, that’ll be the price – not 10 cents. So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players. <a href="https://digitalscholarship.unlv.edu/grrj/vol15/iss1/2/">A player could never know this</a>, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino’s <a href="https://digitalscholarship.unlv.edu/grrj/vol15/iss1/2/">long-term advantage to become evident</a>. Short-term vs. long-term This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I’ve learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them. Let’s consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him. Of course, the first outcome is far more common than the other two – it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners – which is why so many people play in the first place. Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll. What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying. Raising the price Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management’s perspective, such as 4 percent, it can and often does win all of George’s Tuesday night bankroll in short order. This is <a href="https://doi.org/10.1177/1938965508315368">primarily due to the variance</a> in the slot machine’s pay table – which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage – that is, the long-term price of the wager. This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players – if they can get away with it. Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the “price” too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino. This terrifies casino operators, as it is difficult and expensive to <a href="https://digitalscholarship.unlv.edu/grrj/vol15/iss1/2/">recover from perceptions</a> of a high-priced slot product. Getting away with it Consequently, <a href="https://doi.org/10.1177/1938965518777223">many operators resist</a> increasing the house advantages of their slot machines, believing that players can detect these price shocks. <a href="http://journals.sagepub.com/doi/10.1177/1938965518777223">Our new research</a>, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in <a href="http://journals.sagepub.com/doi/abs/10.1177/1938965518787454">a second study</a>. Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere 3 feet away. Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout. Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/100700/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Written by Anthony Frederick Lucas, Professor of Casino Management, University of Nevada, Las Vegas. Republished with permission of <a rel="noopener" href="https://theconversation.com/how-slot-machines-work-and-why-you-should-think-twice-before-playing-them-100700" target="_blank">The Conversation</a>.

Retirement Income

Man named ‘Gambles’ wins lottery twice with same numbers

Larry Gambles, a 65-year-old man from US state Illinois, has won the lottery twice in nine years, incredibly using the same numbers on each occasion. The aptly-named Gambles was overjoyed to hear that he had won the $1.3 million Lucky Day Lotto and spoke of his strategy when presenting his winning ticket. “Nine years ago, I won $50,000 playing the numbers from the jerseys of my high school basketball team,” Gambles told the Lottery. “I can’t believe they paid off again!” Gambles is a retired school administrator and plans to share the winnings with friends and family. When asked about his strategy for success, the now two-time winner said, “Pick your favourite numbers and stick with them. It worked for me!” What an incredible story, and it seems as though he’ll put that money to a good cause. Do you know anyone who’s been lucky enough to win the lottery? Share your story in the comments. Related links: <a href="/travel/international-travel/2016/06/senior-female-solo-travellers-on-the-rise/">Senior female solo travellers on the rise</a> <a href="/travel/international-travel/2016/06/10-of-the-best-travel-photos-from-2016-so-far/">10 of the best travel photos from 2016 so far</a> <a href="/travel/international-travel/2016/06/beautiful-european-cities-you-never-thought-to-visit/">15 beautiful European cities you never thought to visit</a>

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Gaming 'loot boxes' linked to problem gambling

Woman shares why she planned to sue after winning multi-million dollar jackpot

Woman's $940k theft from vet hospital to play pokies app

Gaming or gambling: study shows almost half of loot boxes in video games constitute gambling

Why you should think twice before playing slot machines

Man named ‘Gambles’ wins lottery twice with same numbers