Friday, May 20, 2022
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Spain to Take Aim at NFTs, Play-to-Earn Games, and Loot Boxes

Spain continues to up the ante when it comes to protecting consumers. The latest move by the Ministry of Consumer Affairs charts a new way to address and talk about play-to-earn games, loot boxes and non-fungible tokens (NFTs).

Lawmakers have been asking for years to lump regulation of such games and digital goods with gambling laws, and there seems to be support for this in Spain. A band of MPs in the United Kingdom launched similar appeals for the upcoming Gambling Act Review, urging fellow legislators to consider adding loot boxes, P2E games and crypto together with gambling laws.

Spain has been at it for some time. Back in March 2021, the country launched a public consultation, seeking input from citizens and independent experts as how to proceed with loot boxes, an in-game microtransaction that has been likened to gambling in several studies commissioned by prominent gambling regulators around the world.

Minister for Consumer Affairs Alberto Garzón has even gone so far as to give examples of loot boxes that could be linked to gambling harm. Now, he is advocating for tighter control over such digital goods. At the same time, the Netherlands and Belgium have completely suspended loot boxes, citing the same fear of loot boxes becoming addictive and advertising underage gambling.

Out of the Loot Box and into the Play-to-Earn Model

While loot boxes have been the apple of discord, new contentious topics are emerging, and they seem to be equally pressing matters. Play-to-earn games have been gaining a lot of momentum around the world. Axie Infinity, a game designed on the blockchain, has made some Filipino players so rich they were able to afford real estate in life.

However, the advance of P2E games and their marketing to audiences has been ill-defined to say the least. The Spanish Ministry of Consumers Affairs has been on the trail of understanding these new assets that have proven particularly popular with customers.

How the institution moves forward, though is unclear. It’s true that the ministry used the pandemic as a pre-text to roll in ad-hoc marketing restrictions on gambling. The rules were soon after incorporated in the country’s gambling law.

The ministry seems to realize that addressing NFTs and other blockchain assets should be done with care lest it stifles innovation. Loot boxes, though, have been a hot-button topic for many governments around Europe, and Spain’s approach may serve as the basis of regulating these assets in other jurisdictions. More clarity is still needed to understand what the Iberian nation is after.

Recently, a lawsuit against Apple was tossed out of court. The judge presiding over the case explained that the company had breached no laws and urged the plaintiffs to seek and begin a legislation change that may define loot boxes as a form of gambling.

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