‘Gambling without limits’: How video games are fleecing kids

Kids playing popular video games are being targeted with harmful design tactics including gambling-like features, which fleece them of cash and trap them in gameplay, according to a new report.

As a result, children were being enticed to play more and spend more, said Erin Turner, CEO of the Consumer Policy Research Centre (CPRC).

“What really worries me is when we see these gambling-like features in games targeting children,” she said.

Researchers from CPRC and Monash University — who authored the report — looked at 20 “dark patterns” which they say deceived and manipulated gamers.

The design features were not in all games but 95 per cent of adult players surveyed had come across them and 83 per cent had suffered negative consequences.

Of most concern was children being exposed to gambling-like features such as “paid loot boxes” and prompted to buy items with in-game currencies.

Paid loot boxes require a player to pay to open a mystery box in the hope they receive something valuable in the game.

Unlike the electronic gaming industry which has strict rules on how much money is returned to a player who pulls the lever of a pokie machine — Ms Turner said there’s nothing forcing video game developers to even disclose that. “This is gambling without limits and real manipulation,” she said.

Researchers said paid loot boxes had the potential to “normalise and encourage” monetary gambling among children and young people.

After questioning 800 adult gamers about their concerns, the researchers found close to half spent more money than they intended, felt pressured into buying something or made a purchase by accident, they found.

They said Australian regulators had failed to keep pace with the industry’s rapid expansion — with Australians spending an estimated $4 billion annually — and a substantial overhaul was needed to keep children and adult gamers safe.

Ms Turner has called for a classification system that alerts parents and players to what harmful features are included in games.

However, the Australian industry body, the Interactive Games and Entertainment Association, has argued these design features were different from gambling because the items couldn’t be cashed out for real money.

Children targeted

Brisbane gamer Merrick Wolski, 17, spends his downtime playing and designing games on Roblox — a gaming platform which allows players to create their own games.

Roblox boasts 380 million users, with 42 per cent of them under the age of 13.

“I like making games on the platform, because I find that fun. I like coding and modelling and stuff like that,” Merrick said.

Roblox earned US$3.6 billion in revenue in 2024, much of it coming from in-game transactions using the platform’s currency Robux.

A recent study found Australian players between the ages of four and 18 spent an average of 137 minutes a day on the platform.

While Merrick is passionate about gaming he says it can quickly become “toxic”.

“A lot of games promote gambling content to their audiences… where you can pay to spin a wheel for different prizes.”

“I found myself at times when I spin and I’m just that close to it landing on the best reward on the wheel, and it goes, ‘Oh, would you like another spin for 50 Robux’.”

“Why not? And then I’m 10 spins down.”

Merrick estimated over the last year he’d spent around $150 on Roblox.

“It doesn’t feel great hearing that number out loud.”

Some of the adult gamers surveyed expressed similar concerns.

“Ninety-nine per cent of them are made to create an emotional vortex of dopamine-chasing people, especially young men with a lot of anger, get sucked down, constantly chasing positive reinforcement through micro-transactions and wins while in reality hating the experience,” an 18-year-old male said.

Not a gamer but want to understand the lingo? Click here to see our breakdown.

Researchers singled out the popular online game Stumble Guys for criticism due to its use of “trick language”.

The game which featured animated characters racing to the finish is marketed to kids but had complex calculations for a “Super Gem Sale” that would be difficult for many to understand, especially children.

“It has features that look like gambling: a wheel that for anyone who’s walked into a casino will look similar to a roulette wheel,” Ms Turner said.

“It’s got randomised rewards, an overlay of fun, colourful graphics that are really about engaging children, and lots of push to spend.”

“There’s no way we should be seeing these features in games rated for kids nine and over.”

In a statement the game’s developer, Scopely, said age ratings were set independently by platform app stores, they followed the store policies for advertising disclosures and parents were able to use controls to limit in-game spending and screen time.

“In Stumble Guys’ we take additional steps to limit access to certain features for our younger players, including disabling social media plug-ins and targeted advertising,” it said in a statement.

Globally, the industry earned revenue of approximately US$223 billion in 2023 — with around $125 billion due mostly to micro-transactions, in-game ads and product placement, the report found.

Ms Turner said some players spent thousands of dollars on “micro-transactions”

Complaints going nowhere

The gamers surveyed revealed they rarely tried to get redress when something went wrong and when they did, they failed to receive help from the game developer or platform.

That’s something Merrick can relate to.

He sent complaints to Roblox and the Australian Classification Board about gambling-like features in four games he was exposed to on the platform and believed could violate the platform’s rules and breach the classification system.

“They [Roblox] gave me a response that basically just said that there was nothing they could do about them.”

The ABC put questions about Merrick’s complaint to Roblox but it did not answer them.

Roblox said safety was its “top priority” and it took action on reports of content not meeting guidelines or Australian requirements.

Australia has just introduced new minimum classifications for games with gambling-like content.

Games with in-game purchases linked to chance, including paid -loot boxes have an M rating and aren’t recommended for children under 15.

Those with simulated gambling are further restricted — rated R for adults over 18.

However, Ms Turner was critical of the ratings only applying to new games and believed the definition of gambling-like content was too narrow.

“It has to physically look like blackjack or poker, it has to look like a casino,” she said.

Communications Minister Michelle Rowland acknowledged some active games for children still contained these purchases because the changes were not retrospective, she said if those games eventually added new purchases or rewards they would need to be re-classified.

Ms Turner wants the federal government to create an independent body that would adjudicate complaints, called a digital ombudsman — something that already exists for the telecommunications and finance sectors.

But she said that body would only be effective if consumer protections were strengthened — something the Albanese government said it is consulting on.

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University of Sydney research and game designer Mark Johnson said gaming companies had become incredibly skilled at “dodging and weaving” regulations.

“Depending on the nature of the law, it might be as simple as just changing what something is called. So don’t call it a loot box, call it something else,” he said.

Peak body, the Interactive Games & Entertainment Association (IGEA) said most games and platforms offered tools for parents and players to manage screen time, spending, interactions and access to content.

It defended the classification system calling it “robust” and stating it provided “clear, age-appropriate guidance on game content, helping parents make informed decisions.”

Gamer lingo

• Paid loot boxes: When a gamer hands over money or in-game currency for a mystery box with unknown items in the hope of receiving a reward. The contents of the boxes are randomised and give players an advantage or slick looking feature — like a new weapon.
• Grinding: When players earn in-game currency through performing repetitive tasks which can be so hard to achieve its dubbed “grinding”.
• Battle pass: A design feature that allows a player to pay for access to exclusive content. Researchers found there was a lack of transparency around what the player would receive prior to paying.
• Micro-transactions: A small payment with in-game currency like gems, tokens or real money to buy items in virtual shops. Players might buy something for their video game character known as an avatar or get a shortcut in the game or an advantage. 
• Freemium models: Attract huge numbers of users because they start out as “free”. Commonly, developers make money from ads or users who move to a paid version to “unlock” extra features.
• Pop-up ads: These trick players into thinking it’s part of the game. Some games ask for payment to play without ads or required in-game purchases to continue.
• Trick language: Terminology that is difficult for children to understand.