Electronic Arts (EA) face a fine of up to €10 Million EUR over “illegal loot boxes” in FIFA games, after a Dutch court ruled them to be gambling without a licence.
De Kansspelautoriteit (also known as the Netherlands Gambling Authority, or Ksa) announced The District Court of The Hague have ruled in favor of the Ksa against EA, over their“illegal loot boxes” in FIFA games.
This comes after their 2019 administrative order against EA (a penalty of up to €5 million EUR) for violating gambling laws, and the Ksa’s own 2018 study finding a correlation between playing a game with loot boxes, and developing a gambling addiction.
At that time, the Ksa asked developers to change the contents of their games to not violate the Dutch Gambling Act. They state that while “a number of companies heeded the Ksa’s call. However, Electronic Arts Inc. and Electronic Arts Swiss Sàrl did not.”
Based on the court’s webpage (Translation: Google Translate) Electronic Arts Inc. and Electronic Arts Swiss Sàrl both face a fine of “€ 250,000 per week or part of the week, with a maximum of € 5,000,000” over the lootboxes in FIFA 18 and FIFA 19.
As Electronic Arts Swiss Sàrl is a subsidary of EA, this means EA faces a total fine of €500,000 EUR per week, or a maximum fine of €10 million EUR. Both have also been ordered to cease the activities which violate the law.
The ruling states that since the loot boxes can have soccer players with better stats, they are desirable. Combined with the random nature of loot boxes and that the goods could be sold (albeit through third-party services), this means it falls under the Dutch legal definition of gambling.
EA did not possess the licence to sell a gambling game, which in turn would impose strict laws on the age of who may play the game. In the Netherlands, players must be 18 or over.
The Ksa state that if players feel they have been wrong due to the game’s contents changing, they must contact EA.
“Players who wish to file a complaint about the operation or modification of the game can contact the game’s providers. The game’s providers are the parties that decided to include a gambling game within the game, thereby breaking the law. The Ksa has pointed this out to Electronic Arts Inc. and Electronic Arts Swiss Sàrl repeatedly. Electronic Arts Inc. and Electronic Arts Swiss Sàrl are therefore itself responsible for changing the game such that it is no longer in contravention of the law. How exactly it accomplishes this is at their discretion.”
EA have six weeks to appeal the court’s decision. In a statement to Video Games Chronicle, Dirk Scholing (EA’s Benelux Country Manager) confirmed EA would appeal.
“Players all over the world have enjoyed FIFA and the FIFA Ultimate Team mode for many years and as such, we are disappointed by this decision and what it may mean for our Dutch community.
We do not believe that our products and services violate gambling laws in any way. We are appealing this decision and we seek to avoid a situation impacting the ability of Dutch players to fully experience and enjoy FIFA Ultimate Team.
Electronic Arts is deeply committed to positive play. We seek to bring choice, fairness, value and fun to all our players in all of our games. We remain open to discussions with the Netherlands Gambling Authority and other stakeholders to understand and explore solutions to address any concerns.”
In earlier news, EA are also facing a class action lawsuit in Canada over loot boxes across several sports games. These include the Madden NFL series, and EA Sport’s NHL series.
In the ongoing controversy surrounding loot boxes, several governmental bodies within nations, and their politicians [1, 2, 3, 4] threatened to take legal action against developers.
EA removed premium currency from FIFA 18 and FIFA 19, after Belgium authorities deemed loot boxes as being on-par with gambling. In addition several companies pulled their games from service within Belgium.
In 2018, the UK Gambling Commission refuted the claim made by some media outlets that loot boxes are akin to gambling. In 2019 the UK Digital, Culture, Media and Sport Committee recommended the UK government ban the sale of loot boxes to children, after its nine month inquiry into “immersive and addictive technologies.”
The inquiry involved speaking to industry representatives, and while some felt the proceedings were intentionally badgering there were blunderous comments by some.
EA representatives claimed loot boxes were “surprise mechanics,” while an Epic Games representative said they “would disagree with the statement that Epic makes money from people playing the games.“ The report laments that “some representatives” chose to lie, in the committee’s opinion.
While the UK’s National Health Service (NHS) would recommend a ban on games with loot boxes aimed at children in January of this year, UK trade body The Association for UK Interactive Entertainment (UKIE) reiterated many tools and methods are already in place.
In early June, the UK’s Department for Digital, Culture, Media and Sport then called for evidence that loot boxes should be deemed gambling. This later lead to the UK’s House of Lords Select Committee calling on the UK government to “act immediately” and classify loot boxes as gambling.
In late July, an European Union Report recommended tackling loot boxes via new consumer protection regulation, rather than via gambling based ones.
Image: Origin
