Why you need to get your ads right - Three not-so-randomised ASA rulings on loot boxes

On 20 March 2024, the Advertising Standards Authority (ASA) upheld complaints against three separate social media ads for online games that failed to disclose the inclusion of loot boxes. All three complaints were made by Leon Y. Xiao, a PHD Fellow at the IT University of Copenhagen, after he published a report in January 2024 which highlighted that 93% of games that contained loot boxes did not disclose these in their social media ads, therefore failing to comply with CAP Guidance on loot boxes.

The ASA examined all three ads and upheld that each ad had breached rules 3.1 and 3.3 of the Non-broadcast Advertising and Direct & Promotional Marketing (CAP) Code on misleading advertising. In each case the ASA outlined that the items supplied in a loot box were based on chance, as the consumer did not know what items they would receive in their box until after the transaction. CAP Guidance states that the presence of random-item purchasing (loot boxes), is material to a consumer’s decision to purchase or download a game, especially for those with specific vulnerabilities. In each ad it should therefore have been made clear that the game contained in-game purchasing and loot boxes.

As noted in our previous Law-Now article here, the position in the UK remains (for now) that loot boxes will not be regulated under the Gambling Act 2005. These rulings may turn the spotlight back onto loot boxes, prompting questions of whether the current industry-led approach is working in favour of further legislative intervention. 

The nuance of each ruling is explored below. The learning points are relevant to all those working in commercial and legal roles at sports or entertainment organisations whose commercial revenue comes from advertising campaigns (and in particular paid for adverts) and who wish to avoid similar complaints in the future.

• Ruling on Jagex Ltd
• Ruling on Miniclip (UK) Ltd
• Ruling on Electronic Arts Ltd t/a EA