Is In-Game Gambling Breaking the Law? A Deep Dive

A close-up image of decorative gaming dice arranged on a black keyboard.

Did you know that playing some of your favorite video games could be breaking the law? Sounds pretty unlikely, but through their item shops, many of the games commonly played by high school students work to continually circumvent several acts meant to protect users from the negative effects of online gambling.

In 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed by the U.S. This act specifically regulated most forms of online gambling, only excluding certain instances of sports betting. Alongside this act, many states passed their own laws outlawing online gambling altogether. Why is it then that when you walk in on a sibling/relative playing their favorite shooter game, you see them rolling what is essentially a slot machine for weapon skins, all while draining your or their credit card? The answer is relatively simple.

The companies behind these games capitalize on the opportunity to generate substantial revenue by selling “mystery boxes” or “loot crates” that promise lucrative rewards, albeit with slim chances of actually winning one of these items. In-game mystery boxes are not typically marketed as gambling, making it much more challenging to recognize the addictive mechanics that inspire item shop purchases. It’s due to this fact that these companies typically aren’t held accountable for this issue.

Screenshot of the Purple Prison Minecraft server's store page advertising summer crates with pricing and a promotion. — Website selling crate keys. These keys are essentially gambling tickets.

So, let’s say you play games without in-game gambling. You’re probably in the clear, right? Not exactly; this issue extends much further than the game itself. Third-party websites and servers worldwide have adopted the effectiveness of in-game gambling, mirroring the tactic in their own item shops. These shops are much harder to regulate, as they aren’t typically connected to a large, identifiable corporation. They are very easy to set up from a different IP if their original website is taken down, and more often than not, they are (or at least claim to be) located outside the U.S in countries where online gambling is legal. It’s also worth noting that, since reputable companies don’t host these item shops, it is clear that the chance of ever winning anything worth your money is slim to none.

For a good example of these predatory third-party gambling shops, look no further than the extensive list of servers available to play on in Minecraft. Servers such as the infamous “Purple Prison” often sell crate keys on their websites. These keys are used on their servers to access loot crates that roll a random prize varying in rarity. Typically, before the roll, the crate will show you what items you have a chance to earn. By showing you the potential payout, these servers hope to convince players to keep buying more crate keys, effectively building a gambling addiction. Not only is this against the law in most states, but it’s also in direct violation of Minecraft’s end-user license agreement (EULA).

A virtual gaming environment with chests labeled 'PURPLE CRATE' and 'GOLD CRATE,' showcasing a loot system in a Minecraft server. — Loot crates are available on the infamous pay-to-win Minecraft server Purple Prison.

We’ve already established that gambling in games is often shady and potentially illegal, but what’s the harm in it? After all, gambling is an exciting and popular pastime, but therein lies the issue. Because of how exciting it is to try to win big, gambling is highly addictive. This is only a fraction of the problem, as to see why in-game gambling is really so harmful, you need to consider the target demographic of these games.

Most of the users on these video games are teens, and a developing teenage mind is even more susceptible to developing an addiction than that of an adult. Teens who start gambling are likely to carry this issue into their later life, making it very difficult for them to achieve financial stability.

If this is such a big issue, what can we do to stop it? Until these companies acknowledge the immorality of this problem and take corrective action, there really isn’t anything we as individuals can do other than to stop playing these games. If these games lose users as a result of their gambling mechanics, they will realize that it’s in their best interest to remove gambling entirely. For now, when you feel yourself start to pick up the credit card, put down the controller. Not only is it better for your health, but it might just inspire change.