Betting-style features in video games, such as so-called loot boxes, are “polluting” young peoples’ lives and should be reclassified as gambling for over-18s, the Royal Society for Public Health (RSPH) has warned.

In a wide-ranging report, the charity added its voice to growing calls for a complete overhaul of gambling regulation in the UK, urging Boris Johnson to follow through on the Conservatives’ manifesto commitment to review it.

The RSPH singled out video games and sport as areas of concern, warning that products with gambling-style mechanisms, as well as increasingly subtle marketing tie-ups, allow betting firms to “sweep over the safeguards” intended to protect children.

Its report raised concerns over video game loot boxes – where players buy or earn randomised in-game rewards – and the rise of betting with “skins”, the term for items such as weapons and outfits that can be bought for money. The Conservatives’ election manifesto branded existing gambling legislation, introduced under Tony Blair’s Labour government in 2005, as “analogue law in a digital age” and promised to examine whether to crack down on loot boxes.

The RSPH called on the government to introduce legislation to classify such features as gambling, meaning video games developers would have to ditch loot boxes – a market worth £700m in the UK alone - or accept age restrictions on certain titles.

RSPH chief executive Shirley Cramer said: “Young people have told us that gambling and gambling-like activity are slowly but surely polluting hobbies and pastimes that have traditionally been beneficial to their wellbeing. Today, the vast majority of young people take part regularly in video-gaming and no doubt many will receive video games as Christmas presents.”

She added: “However, we, and the young people we’ve spoken to, are concerned at how firmly embedded gambling-type features are in many of these games. The rise of loot boxes and skin betting have seen young people introduced to the same mechanisms that underpin gambling, through an industry that operates unchecked and unregulated on the back alleys of the internet, which young people can access from their bedrooms.”

Clamp down on Fifa 'loot boxes', urges children's commissioner Read more

The RSPH cited research, funded by fellow charity GambleAware, that found that two in five young gamers bought loot boxes and that more than half believed video games could induce them to gamble. The youngest survey respondents were most likely to accept gambling-style products as a normal part of gaming.

A government spokesperson said: “Problem gambling can devastate lives, which is why we are absolutely committed to protecting young people from gambling-related harm. We have committed to a review of the Gambling Act and take concerns around loot boxes in video games very seriously.”

Dr Jo Twist, chief executive of video games body trade body Ukie, said the industry “takes its responsibility to its players seriously” and that while loot boxes were not classified as gambling, it would engage with the government on a review of regulations.

Ukie pointed out that sites that allow players to use skins as a currency to gamble were illegal in the UK without a gambling licence.

The intervention from the RSPH echoes a similar call issued this year by MPs on the digital, culture, media and sport (DCMS) select committee. The RSPH report, entitled Skins in the Game, also called for legislation to loosen the bonds between gambling and sport.

It said that sports professionals should be barred from endorsing gambling-related activity. Such a change in the law could affect deals such as the tie-up with online casino 32Red that saw England’s record goalscorer Wayne Rooney wear the number 32 shirt at Derby County.

It might also preclude a publicity stunt launched by Paddy Power his year, in which it produced hoax Huddersfield Town shirts with a huge version of the company’s logo emblazoned on the front.

Facebook Twitter Pinterest Paddy Power’s hoax Huddersfield Town shirts. Photograph: Huddersfield Town

The report said such deals weakened efforts to protect young people from being influenced by gambling marketing.

“The visibility that they afford means that high-profile sponsorship arrangements between sports clubs and gambling operators can sweep over the safeguards designed to protect children and young people from gambling harms,” the report found.

“At a time where 55,000 children in Great Britain are classed as problem gamblers and we have seen the National Problem Gambling Clinic commission specialist services for 13-25 year olds, the close relationship between the industries is not one that should remain unaddressed.”

The RSPH also wants to see legislation banning sports teams from having a betting company as their “title sponsor”, which includes firms that have stadium naming rights.

Legislation preventing such deals could affect teams such as Stoke City, whose home ground is called the Bet365 Stadium. Both the club and the online betting firm are owned by the Coates family, led by the UK’s highest-paid boss, Denise Coates, who paid herself £323m last year.

A spokesman for industry trade body the Betting and Gaming Council said the industry was developing a sponsorship code of conduct, including safer gambling messages alongside brand images.