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Video games with gambling-type features could soon have mandatory age ratings as federal parliament hears a proposal for reform.
A loot box is a feature where players can pay for the chance to win extra advantages to use during the game.
Many of the most popular video games such as Star Wars, Call of Duty, FIFA and Mario Kart have had the feature.
But Tasmanian independent MP Andrew Wilkie has proposed reforms which would classify all video games with loot box features as R18+ and ban their sale to children.
Mr Wilkie said the feature was an "insidious gateway to gambling" and Australians kids were being targeted.
He said the strong links between loot boxes and problem gambling had been demonstrated in multiple studies and could not be ignored.
"These companies are very smart and are making billions of dollars and that's wrong ... we cannot continue to let our children be groomed for future gambling in this way," he told parliament on Monday.
"Tempting young players with the potential to win game-changing items is encouraging risk-taking behaviour for a possible reward, delivering random prizes on an intermittent basis and encourages players to keep spending money.
"It's clear that loot boxes give rise to many of the same emotions and experiences associated with poker machines and other traditional gambling activities."
Mr Wilkie was backed by Liberal MP Andrew Wallace who said he would stand "shoulder to shoulder" with the independent to put big tech and gambling companies on notice.
"I'm not advocating for gambling to be made illegal but there is so much we need to do to protect vulnerable Australians," Mr Wallace said.
"It's uncomfortable for some people, it's uncomfortable for (political) parties, but together we can do this and this is a sensible start."
The proposed reforms would also require video games to have clear labelling about their features to ensure parents and carers are informed.
