Lootboxes and Skin Gambling under Swiss Gambling Law

On 17 September 2018, 16 gambling authorities issued a declaration committing themselves to a closer examination of lootboxes and skin gambling (online betting with skins). This is due to the assumption that these in-game features could be qualified as games of chance and would thus fall under the gaming regulations of the individual countries.

Lootboxes

A Lootbox is a virtual "box", i.e. a box that you can unlock, find or buy within a game (e.g. Counter Strike: Global Offensive or Dota 2) to get a random selection of certain objects or skins.

Whether a Lootbox falls under the current or future Swiss Gambling Law depends crucially on its design and the form in which it is acquired: Lootboxes obtained by performance or by chance do not require a stake in the sense of art. 3 FGA (Federal Act on Games of Chance and Casinos) or art. 3 let. a GA (Federal Act on Gambling, which comes into force in January 2019). They are therefore not subject to the current or future gaming laws. In the event that Lootboxes can be purchased for real money or, in some cases, for in-game money, the condition of a stake is met. However, to be considered a game of chance or money game within the meaning of the FGA or the GA, the content of the box must in addition be influenced mainly by chance and the player must be able to win a prize from the box which corresponds to a cash prize or any other financial advantage.

Skin Gambling

Skin Gambling refers to the use of skins as a virtual currency to bet on the outcome of (e)sports events or to use them as a stake for gambling. Skins are virtual goods that are used for the gameplay in video games. They are mostly of a cosmetic nature and thus do not have a direct influence on the outcome of the game performance.

Skins, which are played or won in the game without a monetary stake being necessary, are not considered a stake in the sense of art. 3 FGA or art. 3 let. a GA, analogous to the Lootboxes. The use of skins, which are acquired in a game for money, as a stake for sports betting or online casino games, can fall under the money gaming legislation. Without a license, Swiss providers of skin gambling face criminal prosecution and (as of 1 January 2019) the access to websites of foreign providers can be blocked by the Swiss authorities.

Conclusion

In connection with the qualification of in-game features such as Lootboxes and Skin Gambling, characteristics and possible uses of such features vary depending on the provider. For a final assessment of their legality under Swiss law, their specific characteristics must be examined individually.

The Federal Gaming Board of Switzerland has not signed the above-mentioned declaration issued by the 16 gambling authorities, and currently sees no need to examine video games and gaming on social networks more closely (cf. NZZ am Sonntag of 8 September 2018).

More information on the declaration of the 16 gambling authorities can be found here.

October 2018 | Authors: Andreas Glarner, Alexandra Körner, Carlo Schmid

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