Loot box regulation
FUT FIFA AT A GLANCE Fifa Ultimate Team is a free-to-play collectible card game mode in the FIFA series launched by gaming giant, EA in March 2009. 3 FUT employs a gacha-style business model, allowing players to build their own dream teams by purchasing virtual card packs with a random assortment of players before competing with other players. 4 Each pack is classified as Gold, Silver, and Bronze, etc. and consists of random players with different ratings, as well as consumables such as position modifiers to change a player’s position, chemistry style cards to help improve player’s physicality and skills, and healing cards to heal players’ injuries. 5 The packs are obtained as rewards or purchased from the game’s shop with in-game currencies earned by playing matches. Alternatively, packs can be purchased with real-world money that can be converted into FIFA points. 6 Critics have pointed out that such a conversion may be likened to buying poker chips at a casino, thus “obfuscat[ing] the amount of real money you’re spending on each transaction, making it easier to part with.” Moreover, the packages are randomly allocated and the contents of the packages remain undisclosed until a purchase has been made. For the foregoing reasons, EA has been met with criticism that FUT packs are illegal loot boxes that promote gambling. ORIGINAL RULING OF THE DISTRICT COURT OF THE HAGUE In the wake of the controversy, the Netherlands Gaming Authority (KSA) issued a landmark decision affirmed by the Hague District Court, finding that FUT packs violated the Dutch Betting and Gambling Act. Under the Act, loot boxes are deemed a game of chance, which contain the following two elements: (1) prizes or premiums that can be
won; and (2) winners determined by a process over which, generally, they cannot exercise a dominant influence. 7 The KSA likened FUT packs to loot boxes because their contents were determined by chance, where the player cards were obtained in exchange for high value and were tradeable as a commodity. Moreover, the selection process of the contents could not be outwardly influenced. 8 In particular, the KSA expressed concern over shielding vulnerable groups like minors from exposure to gambling. In response, EA argued that the packs do not constitute a game of chance within the meaning of the Act because the packs cannot be directly converted into real-world money (and thus are not items of value), and that FIFA is inherently a game of skill rather than chance. 9 EA’s argument comes as no surprise, reflective of the fact that FUT has proven to be a tremendous driver of the company’s revenue. In 2017 alone, FIFA made up about 40 percent of EA’s revenue, and more than half of the revenue came from microtransactions in FUT . 10 Nonetheless, the Court ultimately agreed with KSA, finding that the value of FUT cards may amount to €2,000, from which players can profit in other ways, and that the FUT packs can be played as their own sort of game. Hence, the Court permitted KSA to order EA to remove gambling elements from its system, subjecting it to a fine of €250,000 for every week it failed to comply with its order, allowing for a maximum fine of up to €10 million. FUT RULING OVERTURNED ON APPEAL Upon appeal, however, the highest court in the Netherlands – the Dutch Administrative Jurisdiction Division – overturned the lower court’s ruling and revoked the fine. In its decision issued in March, the Division ruled that loot boxes do not constitute gambling. It found that loot boxes could not be deemed a stand-alone game of chance where
3 Paul, C. (2020). Free-to-Play: Mobile Video Games, Bias, and Norms. Page 72. 4 Matthew, B. (2021, August 31). DECONSTRUCTING FIFA 21 ULTIMATE TEAM: IS THE FUTURE OF FOOTBALL FREE? Department of Play. https://de- partmentofplay.net/deconstructing-fifa-21-ultimate-team-is-the-future-of-football-free/. 5 Plant, M. (2020, July 31). FUT for Beginners: Cards and the Transfer Market. Early Game. https://earlygame.com/fut-for-beginners-cards-and-the-transfer- market. 6 Ip, C. (2020, November 17). Why FIFA Ultimate Team is often hated and very successful. Engadget. https://www.engadget.com/fifa-21-ultimate-team-loot- boxes-love-hate-153036039.html. 7 Littler, A. (2022). The Gambling Law Review: Netherlands. The Law Reviews. https://thelawreviews.co.uk/title/the-gambling-law-review/netherlands#:~:tex- t=While%20land%2Dbased%20gambling%20is,force%20on%201%20April%202021. 8 Hao, D. (2020. October 29). Netherlands court rules FIFA Ultimate Team’s player packs as illegal, EA to appeal. Dot eSports. https://dotesports.com/news/ netherlands-court-rules-fifa-ultimate-team-as-illegal-ea-to-appeal. 9 Sinclair, B. (2020 October 29). EA fined €10m over loot boxes as Dutch court sides with gambling authority. GamesIndustry.biz. https://www.gamesindustry. biz/articles/2020-10-29-ea-fined-10m-over-loot-boxes-as-dutch-court-sides-with-gambling-authority. 10 Paul, supra, note 3 at 76.
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