Dutch court rules FIFA loot boxes not a game of chance, revokes EA penalty

On 9 March, the Netherland's Administrative Jurisdiction Division of the Council of State concluded that a penalty payment was wrongly imposed on Electronic Arts (EA) for FIFA Ultimate Team loot boxes. This conclusion was based on the finding that loot boxes in the FIFA video game are not games of chance.

FIFA video game

FIFA is a video game that imitates football leagues with the most recent edition, FIFA22, released on 1 October 2021. Within FIFA, there are different ways to play the game. The most popular mode is the FIFA Ultimate Team mode (FUT mode), which is an online mode where FIFA players can create their own team of footballers and play virtual football matches. A player begins with a starter kit and can then customise and improve his or her team. This can be done by trading virtual footballers or in-game items on the virtual transfer market for 'FUT coins' or by trading them with other players. In addition, a player can acquire a pack (i.e. a digital package also known as a 'loot box'), the exact contents of which are not known in advance, that contains virtual footballers or other in-game items. The contents of the packs or "loot boxes" can be traded on the virtual transfer market.

Fight against loot boxes

According to the Dutch Betting and Gaming Act, games of chance cannot be offered without a licence In the Netherlands. Since 2018, the Dutch Gambling Regulator (KSA) has focused on loot boxes, particularly in game packs within FIFA video games, after research revealed a link between loot-box games and gambling addiction. In 2019, the KSA imposed a penalty payment of up to EUR 5 million on the publisher of FIFA, Electronic Arts Inc. and Electronic Arts Swiss SARL. The KSA penalised EA because its popular FIFA football game included illegal loot boxes, which contained players determined by chance (i.e. the contents cannot be influenced). The fact that football players often have a high value and can occasionally be traded represents a violation of the Dutch Betting and Gaming Act, according to the KSA.

Court cases

EA disagreed with the penalty and initiated legal proceedings. According to EA, the packs or loot boxes are not a separate game, but are a part of the FUT modus of the FIFA video game. EA emphasised that most packs can only be acquired through gameplay, which applies to 92% of the packs.

In 2019, the District Court of The Hague ruled in favour of the KSA, stating that the regulator correctly identified loot boxes as "games of chance".

In a surprising judgment, however, Netherlands’ highest administrative court overturned the decision of the District Court and ruled that the use of loot boxes in FIFA games cannot be considered a game of chance. The Administrative Jurisdiction Division of the Council of State ruled that under the Betting and Gaming Act the concept of a game of chance must be interpreted broadly, but does not regard the acquisition and opening of virtual player packs in the FUT mode of the video game FIFA as an independent game. Instead, the court considered this part of a broader game of skill.

In the opinion of the Administrative Jurisdiction Division, obtaining and opening packs is not a game in its own right, but is a part of a game of skill and only adds an element of chance to it. Gamers use the contents of the packs to build teams, play matches and fulfil in-game assignments. While packs cannot be opened while playing matches and quests, they can be opened in the same FUT mode. The fact that the packs are opened separately from the match or in-game tasks does not make them separate games. The vast majority of packs are obtained and used for game participation. Because the packs are not stand-alone games, they are not games of chance and do not require a licence.

According to the court, EA therefore has not violated the Betting and Gaming Act and the KSA should not have imposed a penalty payment on EA. As a consequence, the Administrative Jurisdiction Division revoked the penalty payment.

Conclusion

After this judgment, the KSA announced on its website that it will examine the consequences of this ruling regarding its approach to loot boxes.

It should be noted, however, that the Administrative Jurisdiction Division ruled specifically on player packs in the FUT mode of the FIFA video game, which will not automatically apply to other games and the loot boxes they contain. In other video games, the question will mainly revolve around whether loot boxes are part of game play or should be seen as a separate game element, in which case it would be considered an illegal game of chance.

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