Raad Van State, The Netherlands’ State Council, has overruled Dutch gambling regulator Kansspelautoriteit’s (KSA) penalty of Electronic Arts (EA) which judged that ‘loot boxes’ offered by its FIFA video game could be classified as games of chance.
EA had appealed a previous judgement sanctioned by a Hague Commercial Court that had sided with KSA’s original judgement that FIFA’s Ultimate Team packs could be interpreted as games of chance, breaching the Netherlands gambling laws.
In 2018, KSA notified EA that it would investigate its ‘loot boxes’ known as ‘packs’, virtual gifts offered by the games publisher’s most popular sports title.
Following its investigation, in 2019 KSA fined EA €5m and ordered the publisher to withdraw or modify all loot boxes from its Dutch market offering, an order the game developer would immediately appeal.
The long-standing dispute saw KSA stand by its original judgement that “coincidence determined the content of the packs and the prizes have an economic value, making the pack a game of chance”.
EA had contested that KSA held no grounds to make such a judgement, as Dutch gambling laws had no clear definition for interpreting ‘game packs’ mechanics and engagements with customers.
Presiding over the dispute, in 2020 the Hague Court ruled in favour of KSA, underlining that although distinct, loot boxes carried a ‘monetary value’ as prizes were exchangeable and that certain game pack incentives mirrored that of a gambling reward.
The Hague Court’s judgement saw KSA double its fine to €10m, with EA ordered to immediately comply with the regulator’s demand or face further penalties.
EA again challenged the loot box judgement, issuing an appeal to the Netherlands State Council, the Dutch government’s legal advisor and highest judiciary court.
A review of the firm’s appeal saw the State Council notify that the game’s publisher had outlined a clear distinction of how loot boxes are awarded to players, who must compete in ‘FIFA Ultimate Team’ (FUT) and earn FUT coins to activate prizes.
The State Council noted that EA had established competitive criteria for how it rewarded its packs that had not been considered by the Hague Court of KSA.
“KSA should not have imposed a penalty payment on the publisher of the FIFA 22 computer game in 2019. The so-called packs or ‘loot boxes’ with which virtual football players can be traded on a virtual transfer market in FIFA 22 are not games of chance that required a licence. The publisher has not broken the law,” the State Council verdict read.