Dutch State Council overrules KSA view of loot boxes as games of chance

The Netherlands’ State Council has quashed the gambling regulator KSA’s €10m fine against EA Games over FIFA22.

The Netherlands.- The Dutch gambling regulator Kansspelautoriteit (KSA) is of the view that video game loot boxes count as games of chance, and it’s an opinion backed by the Hague Commercial Court. However, the Netherlands’ State Council has decided otherwise, overruling a penalty issued against EA Games.

In 2019, the KSA fined EA Games €5m and ordered it to withdraw or modify loot boxes in its FIFA22 game in the Netherlands. That came after an investigation in which the KSA concluded that the loot boxes could be classed as games of chance.

It said that “coincidence determined the content of the packs and the prizes have an economic value, making the pack a game of chance”.

EA immediately appealed, arguing that Dutch gambling legislation contains no clear definition to interpret the mechanics of ‘game packs’ (its term for loot boxes) nor customer engagement with them.

The Hague Commercial Court agreed with the KSA, noting that loot boxes carried a monetary value since prizes were exchangeable. That decision led the KSA to double its fine to €10m. EA then appeal to the Netherlands’ highest court, the State Council.

The State Council found that EA had competitive criteria for how its loot boxes were rewarded and that this had not been considered by the Hague Court.

It decided: “KSA should not have imposed a penalty payment on the publisher of the FIFA22 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 FIFA22 are not games of chance that required a licence. The publisher has not broken the law.

“With this, the highest administrative court has reached a different decision than the District Court of The Hague, which ruled in October 2020 that the publisher did offer a game of chance while he did not have a licence to do so.”

Spain has been looking into passing legislation on loot boxes. Meanwhile, the UK’s Department for Digital, Culture, Media and Sport received more than 30,000 responses to its call for evidence on the regulation of loot boxes.