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Leon Xiao on Why Trading Card Packs Should Legally Be Considered Gambling – A Comprehensive Guide

By jili tutorial · October 7, 2026

Leon Xiao on Why Trading Card Packs Should Legally Be Considered Gambling – A Comprehensive Guide

Trading card packs—from Pokémon and Magic: The Gathering to sports cards like Panini and Topps—have long been seen as harmless collectibles. But a growing body of research and regulatory scrutiny suggests the line between collecting and gambling is not only blurring, but may already be crossed. In a detailed Q&A with Gambling Insider, Assistant Professor Leon Y. Xiao (City University of Hong Kong and Visiting Research Fellow, King’s College London) argues that many card pack products satisfy existing legal definitions of gambling, yet regulators around the world are failing to enforce the law. This guide expands on his findings, providing context, examples, and practical implications for consumers, lawmakers, and the industry.

The Blurring Line Between Collecting and Gambling

Traditionally, physical trading cards occupied a separate regulatory category from sports betting or casino games. The core activity—buying a sealed pack to discover which random cards are inside—was viewed as a transaction for a collectible item rather than a wager. However, the rise of high-value “chase” cards (e.g., a rare Charizard card worth thousands of dollars), limited-edition collector boxes, and new business models like online card breaking and mystery repacks has transformed the landscape.

Xiao notes that according to a “common-sense definition,” if people are risking money for a random result—some outcomes making them happy, others unhappy—that is gambling. Under most legal frameworks, gambling requires three elements: a stake of money or value, a random or chance-based outcome, and a prize with real-world monetary value. “Card packs should constitute gambling under both the common-sense definition and the legal definition,” he says, “but regulators are not enforcing gambling law properly.”

To understand the regulatory gap, it helps to compare how different jurisdictions define gambling.

JurisdictionKey Elements of GamblingApplication to Card Packs
United Kingdom (UK Gambling Act 2005)Pay to play, chance element, prize of money or money’s worthIf the prize (card) can be sold for cash, legal definition is met.
United States (various state laws)Consideration, chance, prize (often requiring “something of value”)Many states classify “chance-based” purchases of sealed packs as illegal if the prize is cash-equivalent.
Hong Kong (Gambling Ordinance)Betting on a game of chance, with a prize that has monetary valueXiao’s study found packs satisfy this definition, but enforcement is absent.

The critical factor is whether the card can be resold for real money. Because secondary markets for rare cards are robust and often worth thousands of dollars, the prize clearly has monetary value. Xiao emphasizes that the legal line is already drawn at transferability—but that line is not being enforced.

Empirical Evidence: Study of 50 Card Packs in Hong Kong

Xiao’s recent study, published in the Journal of Behavioral Addictions, examined 50 physical trading card game and collectible sports card packs sold in Hong Kong. Key findings include:

This lack of transparency is especially concerning because many of these packs are sold to children. For comparison, loot boxes in video games have faced similar criticism, and regulators in Belgium and the Netherlands have forced publishers to disclose odds or remove them. Yet for physical card packs, such requirements are virtually nonexistent.

Example: A popular sports card pack might state “Includes one rookie card per pack” but never reveal that the chance of pulling a specific numbered parallel card is 1 in 10,000. Even when odds are printed (e.g., on the back of a pack for a special insert), they often lack the granularity needed for informed consumer choice.

The Gamblification of Collectibles: Drivers and Examples

Why Are Card Packs Becoming More Expensive?

Xiao identifies several factors driving the trend toward “gamblification”:

Real-world example: The Pokémon TCG’s Evolving Skies set features an “Umbreon VMAX Alternate Art” card that, in 2024, sold for over $1,000 raw. A single booster pack costs $5–10, meaning a buyer has a ~0.1% chance of pulling that card. This resembles a lottery ticket far more than a typical collectible purchase.

The Rise of “Jackpot” Cards

Just as slot machines advertise progressive jackpots, card packs now explicitly market “chase” cards as the ultimate prize. Manufacturers release “collector’s editions” or “elite trainer boxes” costing $50–$100, which contain a few packs plus guaranteed extras—but the real value still hinges on pulling a rare card. This structure mirrors a high-stakes raffle.

Card Breaks and Repacks: Heightened Risks and Fraud Concerns

Beyond individual packs, new business models have emerged:

Xiao states, “My opinion is that these products, including the original card packs, are gambling according to the legal definitions of most jurisdictions.” He adds that card breaks and repacks are “riskier because more money is risked” and because fraud is a major concern—for instance, a repack seller might legitimately include only common cards and claim “bad luck.”

Example: Platforms like Whatnot or Fanatics Live host thousands of card-break streams daily. A 2022 investigation by The Guardian found multiple cases where breakers manipulated the odds by using pre-searched boxes or simply pocketing the money. Because these activities are not regulated as gambling, consumer protection laws are the only recourse—and they often fall short.

Regulatory Blind Spots: Company Type Irrelevant, Enforcement Lacking

When asked whether the identity of the business offering card breaks matters (e.g., a traditional gambling company entering collectibles), Xiao dismisses the notion: “I don’t think the business entity behind the product is necessarily relevant here. Any business offering illegal gambling products should be duly prosecuted.”

This highlights a core problem: regulators often focus on the seller’s intent or business classification rather than the product’s inherent characteristics. A toy company selling card packs gets a pass, while a betting site selling the same packs would be shut down. Xiao argues this is arbitrary and undermines consumer protection.

Current Regulatory Response (or Lack Thereof)

Where Should the Line Be Drawn? Transferable Value and Nuance

Xiao acknowledges that “the current line being drawn in law is whether the prizes can be transferred to a third party and thus possess real-world monetary value.” He considers this “a reasonable line to draw, but it is not currently properly enforced.” He also suggests that the line could be made more nuanced:

This nuanced approach would allow regulators to focus resources on the most harmful practices without overregulating harmless collectibles.

The Role of Probability Disclosures: Necessary but Insufficient

One common regulatory response is to mandate probability disclosures—similar to how video game loot boxes must display odds in many countries. However, Xiao is clear: “Probability disclosures are not enough. Providing them is likely required under pre-existing consumer law and is a bare minimum.”

Why disclosures alone fail:

  1. Incompleteness: Disclosing the chance of a “rare” card does not help if the term is undefined. For example, a pack might say “1 in 6 packs contains a rare” but not differentiate between a $5 rare and a $500 rare.
  2. Accessibility: In Xiao’s study, even when odds were provided, they were often in fine print, on a website URL printed on the pack, or in a language not understood by the target buyer.
  3. Behavioral impact: Research on loot boxes shows that even when odds are visible, many children and problem gamblers continue to spend excessively. Transparency is no substitute for harm-reduction measures like age limits or spending caps.

Protecting Children: Urgent Need for Enforcement

A central concern in Xiao’s research is the availability of card packs to minors. Unlike casino games or sports betting, children can walk into any grocery store or hobby shop and buy packs without age verification. The combination of random rewards, high-value prizes, and no regulatory oversight creates a perfect environment for early gambling habits.

Xiao calls for “more enforcement action urgently… particularly to protect children.” Potential actions could include:

Conclusion and Call to Action

Leon Xiao’s research makes a compelling case that many physical trading card products already satisfy legal definitions of gambling—yet regulators are turning a blind eye. The rise of high-value chase cards, card breaks, and repacks has only intensified the harm, especially for children. While probability disclosures are a necessary first step, they are far from sufficient. Stronger enforcement of existing gambling laws, combined with thoughtful nuance for edge cases, is urgently needed.

For consumers, the takeaway is clear: buying a pack of trading cards is not simply purchasing a collectible—it is participating in a random draw with real financial stakes. Until regulators step in, the burden of awareness falls on parents, educators, and the buyers themselves.

Key Takeaways