A P2E project risks being treated as gambling if players pay in, the outcome depends on chance and the reward can be sold. Since 2021 the risks have gone beyond gambling: securities law, MiCA, loot box rules and app store requirements now apply too. We go through how to test a game against the gambling elements, how to assess tokens and NFTs as financial assets and what lowers the risk.
Checked on 21 October 2026. Rules and sources are current as of this date.
What has changed since 2021
P2E peaked in 2021, and the audience of the best-known projects has since shrunk sharply: according to CoinGecko data as of November 2023, 75.5% of the 2,817 Web3 games launched in 2018–2023 had shut down. The market is moving from “play for income” to ordinary games with asset ownership.
The market cooled while regulation became more specific: gambling, securities, MiCA and child protection apply to P2E at the same time. So a project has to be tested under several regimes at once.
Is play-to-earn gambling? The three elements
In most jurisdictions, from the US to the EU, gambling is defined by three elements. Wording differs: some places need only a material element of chance, others require it to predominate, and in the EU much depends on national law and the regulator’s position. Check the law of every country where you have players.
Consideration
The player pays or risks something of value: buys starter NFT (non-fungible token) characters, stakes tokens to enter a tournament, pays for loot boxes with tradable assets. If entry requires money, this element is almost certainly present.
Chance
The outcome is set by luck rather than skill: RNG (random number generator) in breeding, drops from chests, PvP wins decided by critical hits. This is the most subjective test: roulette versus chess.
Prize
The reward has monetary value: tokens traded on exchanges, rare NFTs sold on marketplaces. In P2E it is almost always present, so risk is reduced through consideration and chance.
Beyond gambling
Securities and MiCA
In 2023 the US SEC (US Securities and Exchange Commission) treated NFTs as investment contracts under the Howey test in the Impact Theory and Stoner Cats cases. In the EU, MiCA does not cover unique, indivisible NFTs, but fractionalising an NFT or issuing large series of interchangeable items may bring them into scope (MiCA recital 11).
Loot boxes
Belgium banned them as gambling. Since 17 March 2026 Brazil’s Law No. 15,211/2025 (ECA Digital) bans loot boxes in games aimed at or likely to be accessed by children and adolescents. The law’s general sanctions include fines of up to 10% of the group’s revenue in Brazil, capped at R$50 million per infringement. A Digital Fairness Act proposal is expected in the EU in Q4 2026. The UK does not treat loot boxes as gambling.
App stores
Since 2023 Google Play allows NFTs if declared in Play Console, but bans selling a chance to obtain NFTs of unknown value, staking NFTs for real-world prizes and promoting earnings from playing or trading. Apple requires NFT sales through in-app purchase and does not let NFTs unlock app features. Steam has not accepted games with crypto or NFTs since 2021.
A licence in every jurisdiction where you have players, AML/KYC, 18+ or 21+ age limits, geo-blocking, fines and criminal liability for founders, removal from app stores.
We will review your situation and propose a solution for your project.
Red flags
High barrier to entry
Expensive NFTs are needed, with no way to play without investing.
ROI-led marketing
Ads promise “10x”, “fast earnings” and “return on investment” instead of gameplay.
Chance dominates
Core earning mechanics, such as loot boxes, are entirely random.
Sham free-to-play
A free mode exists for show and offers no real path to earn, so a regulator may call it illusory.
Economy built on new players
Payouts to existing players depend on new money coming in: the hallmark of a pyramid scheme.
How to reduce the risk
Build on skill
Success depends on strategy and player actions, with chance secondary. Record this in your Whitepaper.
Start hereOffer a genuine free-to-play route
Players can start and earn, even if more slowly, without investing. This helps against the consideration element.
Rework loot boxes
Players know what they will get, or items are cosmetic and do not affect balance or earnings. Account for rules on minors.
Audit your marketing
Talk about gameplay, asset ownership and community, not income and ROI (return on investment).
UrgentGet a legal opinion before launch
Counsel reviews the mechanics, tokenomics and Whitepaper and names the risks in each target jurisdiction.
Do not wait for a regulator’s letter. An opinion before launch costs less than changing the mechanics after it.
A regulator does not ask whether it is a game. It asks what you are really selling: entertainment or a chance to earn.The LegalBit team
Frequently asked questions
Can a P2E game be treated as gambling?
Yes, if consideration, chance and a prize are all present. A prize is almost always there in P2E, so risk depends on paid entry and how much chance the mechanics contain.
Does a P2E game need a gambling licence?
If the game is deemed gambling, a licence is needed in every jurisdiction where you have players. Skill-based mechanics, free entry and careful marketing reduce the risk.
Are in-game tokens and NFTs securities?
It depends on the jurisdiction and design. In the US NFTs have been treated as investment contracts, and in the EU fractionalised NFTs or large series may fall under MiCA.
See also: Loot Boxes and Secondary Markets: When a Game Mechanic Becomes Gambling Under EU and US Law; Legal Support for Token Sales Procedure; P2E game token: security, payment instrument or in-game currency. Services: legal support for GameDev and GameFi.
This is what we do
How we help projects with this topic:
