Canadian Judge Determines EA Loot Boxes Not Constituting Gambling
A Canadian judge has dismissed accusations that the gaming company Electronic Arts (EA) is engaged in gambling due to the sale of loot boxes in their video games.
Judge Justice Margot Fleming, presiding over British Columbia's Supreme Court, determined that for an activity to be classified as gambling, it must have real-world stakes at play. The judge noted that the virtual items and currency within loot boxes cannot be converted for actual money.
Despite this, a lawsuit against EA can progress, as the court agreed that the company may have employed deceptive tactics. This dispute stems from claims that EA's loot boxes could mislead players about their odds of winning valuable virtual objects and encourage them to spend cash on them.
Gaming Mechanics
A loot box is a consumable in-game item, concealing randomized contents that offer players the chance to win virtual items, abilities, or benefits. These packages are often acquired through in-game currencies or real money. Owing to their unpredictable elements and reward model, they have been likened to gambling.
Plaintiff Mark Sutherland purchased loot boxes in the Madden NFL series, a class action encompassing all residents of British Columbia who spent money on EA's loot boxes. This extends to approximately 70 games, most notably the FIFA series.
The lawsuit alleged that these loot boxes and their items possess inherent worth since they could be traded on third-party platforms. However, the judge concluded that only EA's in-house auction site would accept them, exchanging them for in-game currency rather than real money.
"There is no possibility of acquiring, or losing, anything backed by real-world value through the defendants' in-house auctions," stated Fleming.
EA responded by voicing their satisfaction with the court's verdict, maintaining that their games do not constitute gambling.
Controversy Abroad
This judgment largely aligns with previous legal interpretations regarding loot boxes and gambling. Belgium and the Netherlands stand as the only countries to have banned such games due to their breach of local gambling laws.
A Washington State judge had previously remarked that the virtual currencies employed in social casinos could be deemed real-world value, potentially impacting the video games sector in the state.
Sutherland's case will move forward on grounds of deceitful conduct. Among the charges, he accuses EA of misinforming players about the likelihood of attaining rare and valuable objects and of pressuring them to spend real money.
Recently, Epic Games, the creator of Fortnite, agreed to pay the US Federal Trade Commission $520 million to settle charges alleged against them in relation to deceptive practices. These offenses included manipulating players into making unintended in-game purchases and breaching children's privacy.
A class-action lawsuit against Epic Games was filed in the BC Supreme Court last Friday.
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