Netherlands Court Rules Against EA in Loot Box Case
A Dutch court has sided with the Netherlands Gambling Authority in a case regarding Electronic Arts and loot boxes.
This week, a Netherlands District Court ruled against Electronic Arts (EA) regarding loot boxes in a FIFA game. The ruling allows the Netherlands Gambling Authority (KSA) to fine the company €10 million for being in violation of the Betting and Gaming Act of the country.
Loot Box Argument
For some time, gaming companies, gambling operators and regulators have been arguing over whether or not loot boxes in games are considered a form of gambling. Players earn loot boxes by completing certain tasks in games, or they can purchase them as they play. For gambling regulators, they feel the boxes represent a form of gambling as players are risking something to see what is inside the box. Game creators do not see it that way.
In the recent ruling, the KSA said that they feel that vulnerable groups, like minors, should be shielding from being exposed to gambling. The regulator supports the separation between gaming and gambling and were happy with the ruling by the court.
The KSA pointed out that young gamers are susceptible to developing an addiction. And gambling elements have no place being added in video games. Back in April 2018, the KSA ruled that loot boxes are considered a violation of the Betting and Gaming Act. Developers had eight weeks to make games compliant to the new rules.
The fine against EA was originally put in place in October but EA fought against it. A panel of three judges ruled against EA and allowed KSA to place the maximum fine on the company, which is €5 million. An additional €5 million was tacked on for Electronic Arts Swiss Sarl.
EA argued that the loot boxes in FIFA do not count as gambling based on regulations because the loot boxes, known as FIFA Ultimate Team packs, do not offer items of value as they cannot be converted into money. FIFA is a game of skill instead of chance and there is no evidence that directly links the loot boxes to addiction.
The court did not agree and noted that people can profit from the Ultimate Team cards as they can have a high value. The court also said that players ignore the proper gameplay rules and will ‘play’ the packs as their own game.
The judges said that scientific evidence was not needed to prove that a game of chance can cause addition problems. The judges also stated that there is increasing research on the subject and experts feel that loot boxes are affecting players negatively.
Property and Freedom of Expression
EA also argued that the decision by KSA to forbid the packs in their previous form was in violation of the company’s rights to both property and freedom of expression. In response to the property section, the judges said that KSA provided EA with a chance to change the games to meet the requirements without a fine or a sanction. The publisher did not make any such changes. They also pointed out that EA owns the game and has control over any changes made.
This is a landmark decision and may change how games are created in the future. Loot boxes are all the rage around the world for gamblers and a big part of game production. EA does have the ability to appeal the decision, given six weeks to do so by the courts.
It will be interesting to see if they pay the large fines or if the company tries to fight the decision and how that fares. An appeal could go either way, but the court has already strongly ruled in favor of the KSA.