Electronic Arts Gets Fined In The Netherlands For Loot Boxes!

A Netherlands District Court ruled loot boxes as gambling, which is why Electronic Arts is in a tough situation in one of the Benelux states.

The court sided with the Netherlands Gambling Authority (Kansspelautoriteit, or KSA for short) to proceed in fining the publisher for ten million euros, as they violated the country’s Betting and Gaming Act. „The KSA believes it is crucial to shield vulnerable groups, such as minors, from exposure to gambling. For that reason, the Ksa supports a strict separation between gaming and gambling. Gamers are often young and therefore particularly susceptible to developing an addiction. As such, gambling elements have no place in games,” the regulator claims.

KSA informed the devs in April 2018 that they considered loot boxes as violators of the Betting and Gaming Act. They gave Electronic Arts (or EA for short) eight weeks to make their games compliant. However, the fine was imposed in October 2019, but EA contested both that and the KSA’s desire to reveal the case in full to the public. The three-judge panel ruled against the publisher, allowing the KSA to levy the maximum allowable fine of 5 million euros to Electronic Arts, and an additional 5 million to Electronic Arts Swiss Sàrl, and to announce them as well.

The judgement revealed that EA argued that FIFA loot boxes would not count as gambling under the Betting and Gaming Act, as the FIFA Ultimate Team (UT) packs (the loot boxes) don’t offer items of value: they can’t be directly converted into money, and that FIFA is inherently a game of skill rather than chance, adding that there is no scientific evidence linking the UT packs to gambling addiction. However, the court noted that there are ways for people to benefit from the UT cards (which can be worth up to two thousand euros), plus they can outright ignore the proper FIFA gameplay to only deal with Ultimate Team, which can thus be considered as a separate game. The judges ruled that it’s not necessary to prove each new game as a potential troublemaker, as the Betting and Gaming Act is based on the assumption that games of chance carry with them a risk of gambling addiction. They pointed to an increasing body of scientific research and experts warning about loot boxes, plus the reports KSA received by individuals who got affected by them.

The publisher argued that the KSA’s decision forbidding FIFA Ultimate Team packs in their prior form violated EA rights to property and freedom of expression. The judges, on the other hand, noted that the KSA allowed EA to amend the FIFA games without receiving a fine, but they never got around to do it, adding that EA still owns the game, and they have control over how the games in question can comply with the law. And about the KSA censoring FIFA’s game designers’ creativity, the judges again pointed to the Betting and Gaming Act, which assumes that the interests of society to regulate games of chance outweigh the interest to preserve people’s freedom to express themselves through games of chance.

Electronic Arts also argued that disclosing the fine to the public would disproportionately harm its business and hurt its reputation. The court rules that the public interest in announcing the fines and warning the public about unlawful commercial practices outweighed EA’s interest in preserving its reputation. Where can the Dutch players direct their complaints? The KSA claims they should contact EA: „The game’s providers are the parties that decided to include a gambling game within the game, thereby breaking the law. The KSA has pointed this out to Electronic Arts Inc. and Electronic Arts Swiss Sàrl repeatedly. Electronic Arts Inc. and Electronic Arts Swiss Sàrl are therefore itself responsible for changing the game such that it is no longer in contravention of the law. How exactly it accomplishes this is at their discretion,” they said.

The publisher has six weeks to appeal the decision, and they will, according to an EA spokesperson’s statement on Gamesindustry: „Players all over the world have enjoyed FIFA and the FIFA Ultimate Team mode for many years and as such, we are disappointed by this decision and what it may mean for our Dutch community. We do not believe that our products and services violate gambling laws in any way. We are appealing this decision and we seek to avoid a situation impacting the ability of Dutch players to fully experience and enjoy FIFA Ultimate Team. Electronic Arts is deeply committed to positive play. We seek to bring choice, fairness, value and fun to all our players in all of our games. We remain open to discussions with the Netherlands Gambling Authority and other stakeholders to understand and explore solutions to address any concerns.”

But what value does a digital card (that gets outdated in a year, as the new FIFA game will still have Ultimate Team…) have?!

Source: Gamesindustry

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