By Richard / December 2025. In today’s digital gaming world, seemingly harmless features like “loot boxes” and “skins” are raising growing concerns among parents, educators, researchers, and regulators. While these elements might look like just part of the fun in video games, evidence increasingly shows they mimic gambling behaviours—and children may be taking part without fully realising it. At Understand Tech, we want to break down exactly how loot boxes work, why they are so dangerous for young people, what the law says, and most importantly, how you can protect your children from spending hundreds of pounds (sometimes without your knowledge) on randomised, addictive digital items.

1. What Are Loot Boxes and Skins? (And Why Parents Should Care)

Loot boxes are virtual treasure chests that players can buy or earn in games, containing randomised rewards such as character skins, weapons, cosmetics, or other in-game items. The key word is randomised—when you open a loot box, you do not know what you will get. This is identical to how a slot machine works.

Skins are cosmetic customisations that change the appearance of characters or gear but do not affect gameplay. In most games, skins hold no physical ownership value outside the game. However, in some games and markets, skins can be traded, sold, or even cashed out for real money on third-party websites—which is where the gambling problem becomes severe.

How Loot Boxes Work in Practice:

Imagine your child sees a YouTuber using an incredibly rare or exclusive skin. That skin looks cool, and they want it. In the game’s store, they see this skin is only available in a “Premium Loot Box” that costs £7.99. When they buy and open the box, there is a 3% chance they get the skin they want, and a 97% chance they get something else. They do not get the skin. They try again. And again. By the time they finally get the skin they want, they may have spent £40, £50, or even £100 without your knowledge.

2. The Psychology: How Loot Boxes Are Designed Like Slot Machines

Loot boxes are not accidentally similar to gambling—they are deliberately designed with gambling principles at their core. Understanding this design is crucial because it shows you what your children are actually dealing with.

The Six Pillars of Gambling Psychology in Loot Boxes:

• Randomness (Variable Reward Schedule): You cannot predict what you will get. This unpredictability is what makes slot machines addictive, and it is exactly what loot boxes replicate. Your brain releases a dopamine hit with every unopened box, and the uncertainty keeps you coming back.
• Near Misses: Some loot box systems show you what you “almost” won. This psychological trick is borrowed directly from slot machines. Seeing that you were close to winning (but did not) makes people want to try again immediately.
• Loss Chasing: When you do not get what you wanted, you buy another box to try again. This is called “loss chasing”—a core feature of gambling addiction. A 2025 study from GambleAware found that 50% of people who use loot boxes experience “at any level of risk” from their spending.
• Artificial Scarcity (FOMO): Loot boxes are often only available for a limited time (“This skin expires in 24 hours!”). This creates Fear of Missing Out (FOMO), pressuring children to buy immediately without thinking.
• Psychological Rewards (Excitement): Opening a loot box mimics the arousal of pulling a slot machine lever. The ritual, the anticipation, the reveal—it is all engineered to feel exciting.
• Hidden Currency: Most games use abstract “coins” or “points” that you buy with real money. This layers of abstraction makes it psychologically easier to spend. Your child is not thinking “I am spending £7.99,” they are thinking “I am spending 800 of these colourful points.”

How This Affects the Adolescent Brain Specifically:

Adolescents (aged 12–18) are particularly vulnerable to loot box spending because:

• Impulse control is still developing: The prefrontal cortex (responsible for impulse control and long-term planning) is not fully developed until age 25. Teens struggle to resist immediate gratification, even when they know it is a bad decision.
• Reward sensitivity is heightened: Teen brains are more sensitive to rewards than adult brains. The dopamine hit from opening a loot box is more intense for a 14-year-old than a 40-year-old.
• Social pressure is powerful: If all their friends have a particular skin, the social pressure to buy it is intense. FOMO is not just a saying for teens—it is a genuine emotional experience.
• They struggle with value assessment: Teens have not yet developed a strong sense of money’s real value. Spending £50 on a digital item feels abstract and consequence-free to them.

3. The Research: What Studies Show About Loot Boxes and Problem Gambling

If loot boxes were just harmless cosmetics, this would be a non-issue. But the research linking loot boxes to problem gambling is robust and growing.

Key Findings from 2024–2025 Research:

• GambleAware (2025): Found that 50% of people who use loot boxes experience “at any level of risk” from their engagement. This is shockingly high—equivalent to saying half of loot box users are at risk of harm.
• Plymouth University (2025): NHS England raised official concerns about loot boxes exposing children to gambling-like experiences. The health service explicitly called for restrictions.
• 5 Rights Foundation (2025): 32% of UK children regret money spent on games. 43% regret purchases made on games. This suggests widespread financial harm among young people.
• NIH Study (2019, replicated 2024–2025): Found that adolescents who spent more on loot boxes showed stronger links to problem gambling than adults. The relationship was of “moderate to large magnitude.” Adolescents are MORE vulnerable, not less.
• Computers in Human Behavior (2025): A study of 1,400+ adults found that loot box purchases are linked to real-world gambling behaviours, gaming addiction, anxiety, depression, and stress. The researchers concluded that loot boxes share “similar health risk factors with other behavioural addictions.”

What Does “At Risk” Actually Mean?

When researchers say someone is “at risk” from loot box spending, they mean:

• Spending more than intended or losing track of spending.
• Continuing to spend despite negative consequences (grades dropping, sleep loss, financial stress).
• Chasing losses (buying more boxes to try to recover from a bad purchase).
• Prioritising loot box spending over other needs.
• Experiencing withdrawal symptoms (anxiety, irritability) when unable to spend.

4. Real Spending: How Much Are Children Actually Spending?

The numbers are staggering. Research and anecdotal evidence from parents and gaming communities reveal the scale of the problem:

• Average annual spending (Problem Gamblers): Teens identified as “problem loot box spenders” report spending £300–£1,200 per year on loot boxes alone.
• Extreme cases: The gaming subreddit r/gaming regularly features posts from parents discovering their children have spent £500–£2,000+ on a single game’s loot boxes in a matter of weeks.
• One recent case: A 14-year-old secretly used their parents’ credit card to spend £3,400 on FIFA (now EA Sports FC) Ultimate Team packs in four months before the parents noticed the credit card charges.
• Normalisation: Among heavy gaming communities, spending £20–£50 per week on loot boxes is considered normal. This is normalised addiction.

5. The “Big Three” Problem Games (And How to Control Them)

Why These Three?

These games were chosen because they (1) are extremely popular with UK children, (2) have aggressive loot box or spending mechanics, and (3) have proven track records of children spending hundreds of pounds on them.

6. Platform-by-Platform Parental Control Setup Guide

PlayStation 5 (Complete Setup)

Step 1: Create a Child Account

• Go to Settings → Users and Accounts → Other Users → Create User.
• Select Create a Child Account.
• Follow the prompts and link it to your Parent Account.

Step 2: Set Spending Limits

• From your Parent Account, go to Settings → Family and Parental Controls → Family Management.
• Select the child’s account.
• Go to Spending Limits → Monthly Spending Limit.
• Set to £0.00 to block all purchases, or set a limit (e.g., £5/month).

Step 3: Restrict Content

• In the same menu, select Playtime Settings.
• Set Playtime Duration Limits (e.g., 2 hours on school days, 4 hours on weekends).
• Set Bedtime (e.g., 10 PM) and Wake Time (e.g., 6 AM). Console cannot be used between these times.

Xbox (Series X/S)

Using Xbox Family Settings App:

• Download the Xbox Family Settings App on your phone.
• Create a child account and link it to your account.
• In the app, go to Spending → Spending Limit.
• Set “Ask to Buy” for every purchase (most restrictive option).
• Alternatively, set a spending limit of £0.

Playtime settings:

• In the app, go to Playtime.
• Set daily playtime allowance (e.g., 2 hours on school days).
• Set bedtime (console locks after specified time).

Nintendo Switch

Using Nintendo Switch Parental Controls App:

• Download the official Nintendo Switch Parental Controls App on your phone.
• Create a child account on the console and link it to the app.
• In the app, go to Restrictions → eShop.
• Set to Cannot use eShop (blocks all digital purchases).

Playtime settings:

• Set daily playtime limits.
• Set quiet hours when the console cannot be used.

PC/Steam

Steam has less restrictive parental controls than consoles:

• Go to Steam → Account Details → Family Library Sharing.
• Do NOT enable library sharing if you want to restrict spending (sharing enables purchases).
• Instead, use a separate child account.
• Do NOT link a payment method to the child account.
• Require them to ask you to add funds via Steam cards (physical cards you purchase, not automatic).

Better alternative: Use third-party parental control software like Bark or Qustodio on PC, which give you finer control over spending and purchases.

7. UK Law & The Regulatory Landscape (2025)

As of December 2025, the UK legal position on loot boxes is complex and evolving.

Current Legal Status:

• Loot boxes are NOT classified as gambling (yet): The UK Gambling Commission does not regulate loot boxes in games as gambling, provided the rewards cannot be “cashed out” for real money outside the game. This is a critical loophole.
• However, there are exceptions: If skins or loot box contents can be traded or sold for real money on third-party sites (e.g., CS:GO skins being sold on betting sites), that DOES constitute gambling and is subject to Gambling Commission enforcement.
• The government called for self-regulation: In July 2022, the UK government responded to evidence on loot boxes by calling on the gaming industry to self-regulate rather than introducing legislation. However, industry self-regulation has been inadequate.

What Experts Are Calling For:

• Ban for minors: The NHS, 5 Rights Foundation, and various MPs have called for loot boxes to be unavailable to anyone under 18 without parental permission.
• Display odds: Calls for all loot box pull rates to be displayed prominently (like phone app stores are required to show).
• Age verification: Requiring ID verification for accounts on games with heavy monetisation.
• Spending caps: Mandatory spending limits for accounts linked to minors.

What Might Change in 2026:

Several factors suggest stricter regulation is coming:

• Increasing evidence of harm (especially 2025 research showing links to problem gambling).
• Multiple calls from health bodies (NHS, Mental Health Foundation) for action.
• Possible future Gambling White Paper that might expand definitions of gambling.
• European regulation (if EU classifies loot boxes as gambling, UK may follow).

8. Real Parent Case Studies: What Actually Happens

9. Red Flags: When Loot Box Spending Becomes Addiction

Immediate Red Flags (Intervene Within Days):

• Unexpected charges: You find charges on your credit card or bank statement you did not authorise. Do not ignore this.
• Obsessive checking of account balance: Your child constantly checks how many coins/Robux/V-Bucks they have left.
• Asking for money specifically for “skins” or “packs”: They are explicitly asking to buy cosmetics or loot boxes.
• Emotional distress when unable to buy: They become anxious, angry, or disproportionately upset when they cannot spend.
• Attempts to hide spending: You find evidence they are trying to hide purchases (deleting emails, using different devices).

Medium-Term Red Flags (Intervene Within 1–2 Weeks):

• Repeated spending “to get one specific item”: They keep buying packs, repeatedly saying “just one more.”
• Academic impact: Homework neglected, grades dropping because they are focused on games/spending.
• Sleep disruption: Staying up late gaming/spending, being exhausted at school.
• Social withdrawal: Less interest in real-world friends or activities; spending money instead of time with friends.
• Borrowing money: Asking friends or family members for money to spend on games.

10. Frequently Asked Questions

11. The Parent’s Complete Action Plan

Final Takeaway: Loot Boxes Are Gambling, And Your Children Are The Targets

The gaming industry has built a multi-billion-pound business on loot boxes, and they are deliberately targeting children with psychological manipulation. They argue it is just cosmetics, but the research is irrefutable: loot boxes cause real harm.

Your job as a parent is not to ban gaming—gaming is here to stay. Your job is to protect your children from exploitation by setting hard boundaries, using parental controls, and educating them about how these systems work.

The good news? When parents are informed and take action, children adapt quickly. They develop healthy scepticism about loot boxes. They make intentional purchasing decisions. They learn that real fulfillment does not come from cosmetic items.

Start today. Remove your payment methods from their devices. Set spending to zero. Have the conversation. This is one of the most important digital literacy conversations you will have with your child.