Understanding the Dutch ‘lootbox’ judgment: Are all lootboxes now illegal in the Netherlands?

December 9, 2020 | Blog

The judgment of the Hague District Court on the use of lootboxes by Electronic Arts in FIFA 2019 drew global headlines. Computer and console game enthusiasts around the world greeted the news with what can only be described as a mixture of joy about a regulator stepping in to prohibit a hated practice (micro-transactions), and schadenfreude about the fact that gaming giant Electronic Arts lost the case. Yet there seems to be some confusion about the exact implications of the judgment. A lot of comments and reactions seemed to be slightly misinformed about the judgment and its wider implications. Time for a quick recap: what did the Dutch court actually say, and what does it imply for other lootboxes - and other games and gamers?

The Dutch Law on the matter

You cannot really understand the judgment without understanding how Dutch law regulates gaming. To avoid confusion: Dutch law does not specifically regulate computer games, but it does regulate ‘gaming’ as in: providing games of chance (usually called ‘gambling’ by the public).

Dutch law, more in particular the Betting and Gaming Act [Wet op de kansspelen], prohibits the provision of ‘games of chance in which you can win a prize’ without a permit. A game of chance is legally defined to be a ‘game in which the winner is defined by some form of chance and wherein the players generally do not control the result for the most part’. Not exactly a handy definition, but in layman’s terms this means that practically any form of game in which you cannot determine the outcome by being really good (or bad) at it is defined as a game of chance. And yes, that definition includes games where players have some influence over the result by virtue of their skills, such as poker.

The problem with FIFA 2019

In FIFA 2019, you can play in FIFA Ultimate Team mode (‘FUT’), in which mode you can earn, buy and trade players online with other gamers. A part of FUT are the lootboxes, which are called ‘Packs’ in FIFA 2019. Gamers could buy a lootbox and receive random items (including players) that they could then use or trade. The Dutch Gaming Authority looked at the matter and concluded that these lootboxes were a game of chance in which you can win a prize, which effectively makes these lootboxes illegal in the Netherlands.

What was EA’s (primary) defence?

Although the outcome of the football matches in FIFA 2019 is indisputably something you can influence by being really good (leaving aside my own attempts, considering my past double-digit defeats, some people are really good at it), the lootboxes do provide random content in return for payment. Not exactly a game of skill then. EA’s primary line of defence was an attempt to convince the Court that the lootboxes needed to be seen as an integral part of FIFA 2019. EA argued that since FIFA 2019 is overall a game of skill and not one of chance, the lootboxes were not prohibited. EA even got a professor to study FIFA 2019 and declare it was indeed a game that you can win by skill (I assume by playing it a lot). EA also argued that the content of the lootboxes was not a ‘prize’ in the sense of the Betting and Gaming Act, because the prizes only have value in the FIFA 2019 game.

So is it a game of chance?

The Court was not convinced by EA and concluded that the lootboxes are a game of chance. The Court noted the following:

  • The lootboxes can be bought and opened separately from the FIFA matches (which are a game of skill). You do not need to play the matches to buy and open lootboxes.
  • A gamer can choose to just buy and open lootboxes to get the players he wants.
  • The fact that most gamers do not play in this way is not relevant: the mere possibility to play in this way is what matters.
  • The lootboxes are therefore a standalone game of chance and are not an integral part of FIFA 2019.

The professor’s professional opinion about FIFA 2019 was deemed irrelevant, because he had not just looked at the lootboxes, but had given his opinion based on the entire game. Since the Court found that the lootboxes constituted a separate game, the opinion was not relevant. No need to feel sorry though, I am assuming the professor got paid, basically to do a lot of gaming. Not exactly a bad deal.

And what about the ‘prize’ that you can win?

The Court went on to say that the contents of the lootboxes can be considered a prize because they represent real world economic value and can be converted into real world currencies by selling the players to other gamers (via a digital black market). In Dutch law this is settled precedent, because the Dutch Supreme Court ruled in the Runescape case that forcing someone to transfer items (in that particular case: a rare amulet and mask) in Runescape under threat of violence is robbery, since these digital items had demonstrable real world value. The Court also specifically points out that a special edition ‘Ruud Gullit’ player was offered for 9.700.000 FUT coins by EA, which translates to € 1,994 based on the price EA asked for FUT coins. On a side note: although this case was not about robbery, that does sound an awful lot like the daylight version of it.

Are other lootboxes also prohibited?

Because the lootboxes in FIFA 2019 are a standalone game of chance and you can win prizes with that game of chance, the Court ruled that the lootboxes are in violation of the Betting and Gaming Act. However, whether other lootboxes are illegal depends on the game. The Court found the following combination of elements relevant (in my words):

  • Gamers can participate by buying and opening lootboxes
  • Doing so, gamers can win items that represent – possibly significant – economic value
  • Participants cannot influence the contents of the lootboxes by skill
  • The prizes can be traded by the gamers

It stands to reason that lootboxes in other games could fall foul of Dutch law for the same reasons. However, this case does not necessarily mean that every lootbox is illegal in the Netherlands. Lootboxes that cannot be bought but have to be earned are likely an integral part of a game of skill. Along the same lines, lootboxes with worthless content (ironically: some DLC – downloadable content – could very well fall under this category) are not prohibited either. Their specific combination is what makes the FIFA packs prohibited under Dutch Law.

Now what?

EA can (and probably will) appeal the District Court judgment before the Dutch Council of State – the highest court for this kind of administrative cases. This means that we have not heard the last of this case. It certainly is not a given that the District Court’s judgment will survive on appeal. To be continued!

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