My name is Jarrod Wolfe and I am the Strategic Analyst for the Compliance Division at VCGLR. I have received your correspondence in regards to gambling functionality (loot boxes) being incorporated into games. Your research and suppositions on the matter are correct; what occurs with "loot boxes" does constitute gambling by the definition of the Victorian Legislation. Unfortunately where the complexity arises is in jurisdiction and our powers to investigate. Legislation has not moved as quick as the technology; at both State and Federal level we are not necessarily equipped to determine the legality of these practices in lieu of the fact the entities responsible are overseas. Wolfe went on to say that the VCGLR has been "engaging with interstate and international counterparts" to work on policy changes that would "modernise and inform both federal and state based legislation". It's also particularly concerned with the proliferation of gambling-based mechanics being targeted at minors, which Wolfe said was "not just morally reprehensible, but is also legally questionable". The real kicker, as Wolfe wrote in a second email, is one of jurisdiction.

Gambling isn't necessarily "Unauthorised gambling" so there are a lot of variables at play. For perhaps a real world example think of overseas betting agencies. Such as Bet 365 – Australians can and do use this service; yet it is clearly administered and run from the UK. This isn't illegal. However, if that company set up "shop" in Victoria or started specifically advertising and offering gambling products to Victorians. Then we could investigate and it could be considered a breach of legislation and we would pursue, overseas or not. One of the downfalls is that using overseas based products, Victorian residents do not have us to investigate any complaints or issues they have. The VCGLR analyst noted that the regulator could potentially work with other Australian bodies to keep a closer eye on gambling elements in video games. For instance, the Classification Board could get involved. "If these companies want to include significant elements of gambling in their products then perhaps we should work with 'The Australian Classification Board' to ensure than any product that does that and monetises it gets an immediate R rating," Wolfe proposed. "I could imagine that this would send ripples through the industry and it would support the objectives of the Gambling Legislation to ensure minors are not encouraged to participate in gambling."

Game publishers EA and Activision-Blizzard have been contacted for a comment on these developments.