Gambling-style features in computer games, which encourage players to pay for items such as loot boxes that may be worth very little, warrant stricter oversight by the Gambling Commission to prevent them becoming a “gateway” to betting addiction, Labour’s deputy leader, Tom Watson, said.

Speaking as he proposed much tighter controls on online gambling, including caps on the amount that consumers can gamble, Watson said not enough was being done to deal with gambling through games.

Watson, who has led the party’s review of gambling legislation and is a keen gamer, said features such as skins and loot boxes needed monitoring: “The natural lookout post for the controls on loot boxes would be the Gambling Commission.

“I don’t want gaming to become the gateway to gambling. It does seem to me that this might end up with the Gambling Commission.”

In an apparent reference to internal divisions in the Labour party and the decision by several of its MPs to form a breakaway group, Watson added: “I can be an obsessive gamer, usually at times of crisis, so I’ve been playing a lot lately.”

Skins are in-game items, such as weapons or outfits, that can be won and traded for money, while loot boxes invite players to pay a certain amount for a mystery reward whose value can be small or relatively large.

Critics said the element of chance, coupled with the ability to spend real money, means children are being exposed to products that are essentially gambling by another name.

The Gambling Commission has no special responsibility for regulation of skins and loot boxes but can intervene if it believes the way they are sold or marketed is covered by the Gambling Act.

A spokesman said the regulator was concerned by the the increasing number of examples where the line between video games and gambling has become blurred.

“Where we are clear that a product has passed the line into gambling and is posing a risk to players, we will take action,” the Commission said. It pointed to a 2017 prosecution against FutGalaxy for providing skins gambling to the underage.

“We have joined forces with other regulators to call on video games companies to address the clear public concern around the risks gambling and some video games can pose to children.

“We encourage video games companies to work with their gambling regulators and take action now to address those concerns to make sure that consumers, and particularly children, are protected.”

Where in-game items that are derived from loot boxes can be readily exchanged for cash, the loot boxes themselves are likely to fall within the definition of gambling, according to the Commission.

A spokesman for the department for digital, culture, media and sport, said: “The Gambling Commission has shown it will take action and prosecute unlicensed gambling that features in-game items, becoming the first regulator in the world to do so.

“The commission is also working with the video games industry to raise awareness of this issue. We will continue to look closely at the evidence and associated risks.”