ASA raps Hutch Games over loot boxes

The UK’s Advertising Standards Authority (ASA) has issued an official warning to Hutch Games following a failure to properly disclose the presence of loot boxes in two of its mobile racing games. This decision underscores the growing scrutiny of gaming practices and their potential implications within the gambling sector.

Two formal complaints were filed with the ASA concerning Hutch Games, both highlighted by Leon Xiao, an academic researcher affiliated with the Centre for Digital Play at the IT University of Copenhagen. Xiao confirmed to iGB that he submitted the complaints following his research into game regulation.

The first complaint centered on *F1 Clash – Car Racing Manager,* available on the Apple App Store as of May 2023. The game’s listing indicated it was free to download, yet it also mentioned that some in-game items could be purchased using real money. The complainant argued that the listing failed to clarify that the game included random item purchasing features, better known as loot boxes. These mechanics enable players to use real money to unlock random in-game items, raising important discussions about transparency in gaming advertising.

Hutch Games’ Misinterpretation of Advertising Guidelines

In their defense, Hutch Games asserted that players could progress within the game without spending money and thus believed that they had adequately disclosed all material information necessary for consumers to make an informed choice about downloading the game. They pointed to the Committee of Advertising Practice (CAP) guidance, which states that if in-game virtual currency can be earned through gameplay, there is no obligation to advertise related item purchases.

Despite their initial position, Hutch Games later acknowledged a misinterpretation of the CAP guidelines and committed to updating the product listing on the Apple App Store to provide clearer information.

ASA’s Ruling: Misleading Advertising Identified

Upon reviewing the case, the ASA acknowledged Hutch Games’ argument regarding the earnability of in-game currency; however, they clarified that this principle pertains strictly to in-game storefronts and not product listings on app stores. The ASA highlighted that such listings fall under the purview of the CAP code, emphasizing the significance of transparency for consumer decision-making.

The ASA contended that the advertisement did not provide sufficient details about the nature of the in-game purchases, particularly regarding the existence of loot boxes. “The omission of material information regarding the presence of loot boxes is critical for consumers considering downloading the game,” stated the ASA. Consequently, they ruled the advertising materials breached CAP code (edition 12) rules 3.1 and 3.3 concerning misleading advertising. Hutch Games was instructed to refrain from using the advertisement in its current form and to disclose whether other games feature loot boxes.

A Parallel Case: Additional Complaints Addressed

The second complaint involved *Rebel Racing,* where concerns were raised about the lack of disclosure regarding loot boxes as well. Hutch Games presented a nearly identical defense, reiterating that players could advance without real-money transactions and that the in-game Keys currency could also be earned. However, they once again admitted a misunderstanding of CAP advertising regulations.

Similar to the previous ruling, the ASA concluded that the advertisement for *Rebel Racing* lacked adequate information about in-app purchases, specifically the inclusion of loot boxes. “The absence of clarity regarding loot boxes is crucial to informed consumer choices,” noted the ASA, which mandated that the advertisement must not appear as it had previously. Hutch Games received the same directive to clarify potential loot box features in other titles.

A spokesperson for Hutch Games stated, “Following discussions with the ASA, we recognize an error was made regarding our store listings for both *Rebel Racing* on the Google Play Store and *F1 Clash* on the Apple App Store. This discrepancy has been addressed promptly, and we are dedicated to ensuring that all future listings reflect accurate information.”

The Growing Concern: Loot Boxes and Gambling

The association between loot boxes and gambling has garnered substantial attention, particularly due to concerns that these mechanics introduce gambling elements—exchanging real money for random items—into video games often enjoyed by children. This has sparked dialogue among regulators, industry leaders, and parents alike.

In July 2023, UK Interactive Entertainment (Ukie), the representative body for the UK games industry, released guidelines on the management of loot boxes, which include recommendations for age-restricting access to those 18 and older. These guidelines emerged as a response to the technical working group established by the Department for Culture, Media and Sport (DCMS) in July 2022, which was initiated following government findings from a 2020 inquiry into loot boxes.

The debate over loot box regulation is not limited to the UK. Recent discussions in Germany’s Federal Congress on Gaming and Gambling have examined similar issues, reflecting a broader international concern. Robert Hess from Gluecksspielwesen.de summarized the current landscape on loot boxes, while WestLotto, the state lottery of North-Rhine Westphalia, has advocated for collaborative conversations involving policymakers, scholars, and industry stakeholders aimed at formulating comprehensive regulatory frameworks.