Hawley Introduces ‘Loot Box’ Bill

Bipartisan proposal part of young senator's salvo against big tech

Sen. Josh Hawley / Getty Images

Joined by two Democratic colleagues, Sen. Josh Hawley (R., Mo.) on Thursday officially floated his proposed ban on "pay-to-win" monetization in video games that explicitly target children.

The bill, which detractors have claimed could "devastate" the video game industry if passed, is meant to curb what Hawley characterized as an "addiction economy" that specifically targets children.

"Only the addiction economy could produce a business model that relies on placing a casino in the hands of every child in America with the goal of getting them desperately hooked," Hawley said. "I'm proud to introduce this landmark, bipartisan legislation to end these exploitative practices."

Hawley introduced the bill alongside Democratic cosponsors Ed Markey (Mass.) and Richard Blumenthal (Conn.). This marks Markey and Hawley's second collaboration since the latter entered Congress—they previously collaborated on a proposed revision to the Children's Online Privacy Protection Act.

The new bill targets "pay-to-win microtransactions" and "loot boxes," two game mechanics often central to the profit model of so-called free-to-play video games. A pay-to-win transaction is one where payers spend money—sometimes a little, sometimes a lot—to advance in a game or get a leg up on other players. "Loot boxes" are purchasable content that when "opened" give the player a random in-game item.

If passed, the bill would prohibit game developers or distributors from adding either feature to "minor-oriented" games (a term defined with reference to diverse features including everything from subject matter to music and audio). It would additionally block their implementation in games where developers have "constructive knowledge" that their game has players under the age of 18.

The effect of the bill, if passed, would be a sweeping restructuring of the profit model of the video game industry, which has come to depend more and more on free-to-play as a profit model in recent years.

"Today's digital entertainment ecosystem is an online gauntlet for children. Inherently manipulative game features that take advantage of kids and turn play time into pay time should be out of bounds," Markey said.

Although it is focused on game developers, the bill is really part of a larger critique advanced by Hawley since he arrived in the Senate this year. He has likened pay-to-win dynamics like the ones prohibited by the bill to gambling, taking advantage of users' cognitive biases (especially those of children unable to make full, rational judgements) to make a profit.

At the same time, the bill appears connected to Hawley's apparent skepticism of the tech industry as a whole. The senator has been a vocal opponent of "big tech" and an advocate of using antitrust law to curb what he perceives as abuses.

The loot box bill is an extension of this opposition, which seems at base to be a product of Hawley's view about what does and does not constitute a company contributing to the economy. The pay-to-win profit model that Hawley is attacking leads to minimal investment or production of "real" value. Firms in the tech and financial sector that make their profits in analogous fashion have come increasingly under scrutiny from a number of Hawley's Republican colleagues in recent months, especially Sen. Marco Rubio (Fla.).

Where supporters of the Hawley bill might see a deeper critique of present political economy, opponents see only troublesome government overreach. The wide scope of the bill—which, at a mere 18 pages, is unlikely to cover most edge cases—means that it is likely to prohibit many features that adult gamers enjoy and benefit from, while creating a headache for developers.

"The actual text of the legislation, however, appears to cast a very wide net," one critic wrote at tech-news site Gizmodo. "Ostensibly, any video game created, whether for children or not, whether containing a casino-like mechanic or not, would be in some way restricted by this law."

Hawley's office, however, seems undeterred by this criticism. According to an FAQ about the bill, it is their view that "the onus should be on developers to deter child consumption of products that foster gambling and similarly compulsive purchasing behavior, just as is true in other industries that restrict access to certain kinds of products and forms of entertainment to adult consumers."