Glorified Gambling: Moral and Legal Issues Within the Gacha Gaming Industry

By: Kiara Hildeman

What are gacha games?

Gacha games were first developed and received popularity in the early 2010s with the release of the first notable gacha game which shifted Japanese gaming culture forever. Gacha games are video games that revolve around a “gacha” (toy vending machine) mechanic. This mechanic functions through virtual in-game currency that is traded for a randomized item to be used in the video game. Items include anything from characters to weapons and each fall on a spectrum of rarity and utility. Therefore, players are known to “roll” for the rarest items multiple times during the window of availability. 

In the United States, gacha games have been in the forefront of gaming in recent years with the release of hits like Genshin Impact. Games like these are free to download but include in-game purchases that often raise more revenue than would purchases for the game itself if it were sold for a one-time retail price. Popular games nowadays are sold for upwards of $60 and are anticipated to increase in price through the upcoming year. Since its release in September 2020, Genshin Impact has accumulated over 127 million downloads, and since then, the game has generated $3.7 billion in revenue.

How is gacha gaming harmful?

In-game currency is much like gambling chips as they are both purchased with real money. Also like gambling, gacha games are highly addictive. The chance-based mechanics of the games render them predatory and exploitative of their users. Addicts of gacha games are known to spend thousands of dollars on in-game currency, desperate for the best characters, gear, and skins. However, the difference between gacha games and gambling is that the prizes in gacha games have little real-world relevance. Gamblers and casinos have the opportunity to win a jackpot prize of real money for real purchases while gacha gamers are betting for virtual prizes that are later superseded by new items with each update to the game.

While gacha games are free to download, they are incredibly hard to succeed in if a player chooses to be “free-to-play”. Obviously, a free-to-play player will struggle when up against a “whale” who has invested a ton of money to possess the best items. The competitive atmosphere of these games influences their players to use their real money to acquire in-game items that will boost their stats. With new content being released on a weekly, monthly, or quarterly basis, a cycle is created wherein players must continue to gamble their money to maintain their status or ranking in the game.

What are the legal issues of gacha gaming?

Fundamentally, gacha games and gambling are almost identical. An alarming difference is that age restrictions for gacha games are lenient and hard to enforce. In casinos and with online gambling, the minimum age of eighteen is regularly enforced. Under Washington law, penalties for underage gambling include fines (up to $125), up to four hours of community service, court costs, and forfeiture of any winnings. Meanwhile, most gacha games have a minimum age of twelve. Genshin Impact is rated twelve and over and suggests having parental or guardian consent upon purchasing in-game currency. Still, there is no age verification process in the game, and there is no way to monitor whether a child has received parental consent. Compared to gambling, the innocent mask of a virtual game makes parents less likely to monitor the use of gacha games, increasing the likelihood that children are spending hours on these games unsupervised. There are sure to be ill effects with exposure to gambling at such a young age, including strained relationships, delinquency, and depression. If the gambling industry deems age restrictions necessary, then why should gacha games be open and accessible to teenagers and children?

A number of countries have enacted legislation that limits and restricts gacha gaming. In 2012, Japan’s Consumer Affairs Agency declared complete gacha to be a violation of the law. Complete gacha is a particular model of gacha wherein players are required to collect a series of items in order to claim a grand prize. Japan’s Consumer Affairs Agency felt that complete gacha was too similar to gambling, and the decision was a reaction to two cases where one middle schooler spent $5,000 in a month and another student spent $1,500 in three days on complete gacha rewards. China has also implemented restrictive gacha law that discloses the drop rate of items and loot boxes and a system of “pity” where a player is guaranteed an item after a certain number of purchases. The UK Gambling Commission has stated that video game loot boxes are a reason behind the rise in underage gambling and more children being classified as “problem gamblers”. Currently, only a handful of countries have active gacha regulations, and these games are fully banned in Belgium and the Netherlands.

In the United States, the circuit courts are split over whether gacha games constitute gambling. For one, judges cannot decide what the intrinsic value of virtual currency should be. Second, the nature of gacha games results in injuries that are often intangible and not addressable through the current court system and statutory framework. For example, if gacha games are not considered gambling, then plaintiffs cannot reasonably bring their claims under their state’s anti-gambling statutes. However, this has not stopped claims against these video games. In Taylor v. Apple, Inc., plaintiffs sought to hold Apple liable for having games on their app store with “features legally equivalent to slot machines.” A plaintiff’s minor son felt that he had been “induced” to make “in-game” purchases on loot boxes while playing Brawl Stars. The California federal district court dismissed the complaint and suggested seeking legislative remedies as loot boxes are not plainly prohibited by statute. In recent years, several states including Washington have introduced bills to regulate loot boxes in games (though all have failed). In 2019, the Protecting Children From Abusive Games Act was introduced in the Senate with intentions to regulate pay-to-win microtransactions and loot boxes in minor-oriented games. All these unanswered questions are understandable when it comes to the new realm of gacha gaming, but the United States will have to make a decision sooner or later as young and unsuspecting Americans continue to download these games and fall victim to their tactics. 

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