A study of loot boxes in ten videogames conducted in 2018 by the Netherlands Gaming Authority—the Kansspelautoriteit, or Ksa—determined that four of them were in violation of the country's gambling laws (opens in new tab), and would have to be changed. No names were provided at the time, but the agency warned that "enforcement action" would be taken if the required changes weren't put into place by June 20 of that year.
In a statement (opens in new tab) released today, the Ksa said that most of the companies involved in the matter complied as required, but Electronic Arts did not, and as a result it's now facing fines of up to €10 million ($11.7 million): €5 against EA itself, and €5 million against EA Swiss Sàrl, a division of the company that processes payments in some countrries.
"Electronic Arts Inc. and Electronic Arts Swiss Sàrl are violating the Gambling Act through its Packs in the FIFA videogame. The law stipulates that games of chance may not be offered without a license," the Ksa said. "This is not without cause; games of chance are high-risk products that can only be offered under strict conditions. Electronic Arts Inc. and Electronic Arts Swiss Sàrl are not licensed to offer games of chance."
"The orders subject to a penalty were imposed in order to compel the companies to put an end to the violation. The Ksa considers the violation of the law to be particularly serious given that a large number of children and young adults have access to Packs in the FIFA game and are particularly vulnerable to developing gambling addictions."
The fine was actually imposed in 2019, but EA took the matter to court, arguing (via Google Translate (opens in new tab)) that loot boxes in FIFA games are not games of chance as defined by the Betting and Gaming Act, and are therefore not in violation of the law. EA also argued that FIFA is a game of skill, not chance, and the addition of an element of chance does not change that fundamental nature, and that the items inside FIFA packs have no monetary value outside of the game itself.
The District Court of the Hague disagreed, however, ruling that FIFA meets all necessary requirements to be defined as a game of chance under the Betting and Gaming Act, clearing the way for Ksa to impose penalties.
"Plaintiffs offer online a game of chance (loot box) that is included in a game of skill. The Gaming Authority (Ksa) has rightly concluded that the definition of games of chance within the meaning of the Betting and Gaming Act has been met," the court ruling states.
"In view of this qualification and in view of the prohibition on offering online games of chance without a license, the Ksa is authorized to proceed with enforcement. Correct use has been made of this power. The coercion decision is legal and proportionate ... The appeals are unfounded."
"The Ksa believes it is crucial to shield vulnerable groups, such as minors, from exposure to gambling. Adults likewise stand to benefit in this regard, as they should be aware of what kind of game they are playing. This is, in part, why the Ksa feels that a strict distinction must be made between games and games of chance. Games of chance are high-risk products, and offering them without a licence is prohibited," the regulatory body said in its statement.
It also threw a little shade at EA, advising FIFA players who have a problem with how any of this has worked out to take it up with them.
"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."
Update: Electronic Arts has confirmed that it will appeal the ruling. "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," EA Benelux country manager Dirk Scholing told VGC (opens in new tab).
“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."
Thanks, GamesIndustry (opens in new tab).