- within Cannabis & Hemp, International Law and Employment and HR topic(s)
Thailand's Legislation Consideration Committee of the Ministry of Interior has ruled that in-game loot boxes in online games do not constitute gambling under the Gambling Act B.E. 2478 (1935). This first-of-its-kind ruling provides useful guidance for online game operators and digital entertainment companies operating in Thailand.
Background
The ruling came in response to an inquiry concerning an online role-playing game operator that launched a campaign featuring a loot box mechanism. The mechanism allowed players to purchase a token in exchange for the opportunity to receive a virtual loot box containing randomized in-game items. The key features of this were as follows:
- The items received were digital, noncash items usable only within the game.
- The items could not be exchanged, redeemed, or converted into cash with the game operator.
- Items may differ in rarity but remain purely virtual.
The central question was whether paying money to obtain randomized in-game items constituted a risk-based activity involving the chance to receive money or property of monetary value, which would constitute gambling under the Gambling Act.
Committee Ruling
The committee reached the following conclusions regarding the characteristics of the game's loot-box mechanism:
- No cash or monetary equivalent: Players did not receive cash or property that could be exchanged for cash. The in-game items were merely usage rights within the online game ecosystem.
- No real-world monetary valuation: There was no determination of item value in real currency, and no mechanism for redeeming or converting items into money with the game operator. Any off-platform trading of in-game items between players is irrelevant to online game operators, as any value arising from such transactions is determined by the market rather than by the operators themselves.
- Service fee characterization: Payments made by players purchasing in-game loot boxes constituted fees for online game services.
Accordingly, the committee concluded that these in-game loot boxes do not constitute gambling under the Gambling Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
