Taking a gamble: Proposed reforms to the National Classification Scheme

The federal government has recently announced proposed reforms to the National Classification Scheme (Scheme) and released the Review of Australian Classification Regulation (Review).

Key proposed changes include:

the introduction of mandatory minimum classifications for games which contain simulated gambling and paid loot boxes. A loot box is a feature in a computer game where digital items, such as in-game weapons, can be purchased usually using in-game currency. Loot boxes are a common feature of today's computer games to encourage spending of in-game currency
updated regulatory arrangements to align with the modern digital media environment
expanded options for the industry to self-classify content.

This article considers the proposed reforms and their likely impact on the film, video and games industries.

What is the National Classification Scheme?

The Scheme sets out a regulatory framework for classifying films, publications and computer games in Australia. It is established under an intergovernmental arrangement between the Australian, state and territory governments, whereby the Australian Government is responsible for classifying content and the states and territories are responsible for regulating the sale, hire, exhibition and advertising of classifiable content.

The Scheme is legislated under the Classification (Publications, Films and Computer Games) Act 1995 (Cth), with each state and territory enforcing the Scheme using their own legislation.

Importantly, any changes to the National Classification Code and the Classification Guidelines require unanimous agreement from the Australian Government and the state and territory ministers responsible for classification matters.

Is there a need for reform?

Australia’s classification scheme was developed at a time when physical media was predominant and censorship was a key focus. Today, this focus has shifted to providing parents with information to guide decisions around the suitability of content for children and to provide consumers with information to make informed decisions.

A number of reviews on the classification arrangements have taken place, in particular, the Australian Law Reform Commission’s report in 2012 and the Australian Competition and Consumer Commission’s Digital Platforms Inquiry report in 2019. These reviews examined the deficiencies with the current classification arrangements and highlighted the need for significant changes to take into account the increase in digital media and the convergence of media platforms.

Extensive consultation with industry, community members and interested stakeholders as part of the Review has informed the need to update the Scheme to:

reflect modern content and delivery platforms
cater to the needs of the industry
continue to provide appropriate information and protections for consumers of all ages.

We outline the proposed changes that seek to implement the recommendations from the Review below.

What are the proposed changes?

The federal government has announced its intention to reform the Scheme in two stages, with a number of changes to take place soon while further reform is considered.

The first stage aims to align regulation with the digital media environment and address concerns regarding the classifications of games that simulate gambling. In particular, the government seeks to:

introduce mandatory minimum classifications for games which contain simulated gambling (to a classification of R 18+) and paid loot boxes (to a classification of M). This is aimed at strengthening protection for those most vulnerable to gambling in the community, and to affirm that these games are not appropriate for children
expand options for the industry to self-classify content. The Classification Board will maintain an important role in supporting industry classification decisions, however this will make it simpler and more cost-effective for the film, video and games industries to classify their content
reduce unnecessary regulation, including to remove the need to re-classify content that has already been classified for television and implementing exemptions for foreign language films.

The Review, conducted by Mr Neville Stevens AO in 2020, as well as recent research, has informed these changes, which you can read in the final report.

How does this impact industry?

These proposals, if enacted, are likely to be welcomed by the film, video and games industries.

Although industries in this sector will need to put measures in place to ensure that any new regulations are complied with, the introduction of a clear and streamlined self-classification scheme will undoubtedly provide greater flexibility and be more cost and time effective for the industry. Harmonising processes across platforms so that the industry has greater responsibility for undertaking classification will also reduce processing timeframes of the Classification Board and bring greater clarity as to what content requires classification.

Parameters around the mandatory minimum classifications for games containing simulated gambling and paid loot boxes are, at present, unclear. Developers of games containing these devices may decide to remove gambling and paid loot boxes altogether to avoid any adverse implications.

Where to from here?

The proposed changes and recommendations from the Review are likely to have a positive impact on Australia’s classification system although how and when many of the changes will be introduced is yet to be determined.

If you have any questions about the proposed changes, please get in touch with a member of our Technology, Media & Telecommunications team below.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Sarah Butler

Shenaye Ralphs