The Dutch Administrative Supreme Court overturned a ruling from the KSA, previously upheld by the District Court of The Hague. According to the Administrative Jurisdiction Division of the Council of State, the gambling regulator wrongfully penalised EA for features in their FIFA games series.

The Supreme Court of the Netherlands revoked the Kansspelautoriteit’s findings that loot boxes and in-game packs constitute gambling on technicalities, and EA does not need to pay any penalties. This was EA’s second appeal regarding the penalties imposed by KSA in 2019. On 9 March 2022, the highest Administrative Judge of the country sided with EA.

Loot boxes are a highly contentious topic in the gaming industry, and studies link these in-game purchases to gambling problems.

 EA 1 – 0 KSA

On 15 October 2019, the KSA penalised the gaming developer Electronic Arts (EA) following an investigation into loot boxes and packs that players purchase in FIFA Ultimate Team (FUT), an online football game. The regulator argued that these features of the EA game violate the region’s Games Act. According to KSA, loot boxes and packs qualify as games of chance and fall into the gambling category that was prohibited in the country at that time.

EA appealed to the district court and argued that these features do not constitute gambling and the penalty of €5 million was unfounded. Following their loss in the district court in 2020, EA turned to the highest authority in The Netherlands.

EA detailed in their appeal that the Dutch Gaming Act specifies games of chance as stand-alone games, and this does not apply to FUT or its packs. The court’s findings state:

“The KSA has erroneously taken the position that obtaining and opening the packs can be regarded as an isolated game so that to that extent it is not a game of chance.”

The Supreme Administrative Court agreed with EA and overturned the district court’s findings and revoked any penalties to EA from the KSA.

 Technically Wrong

Kansspelautoriteit lost this case based on technical details that classify loot boxes and the FUT packs as in-game features. The original penalty and court finding wrongfully classified these as separate games and the regulator argued FUT is an isolated game, which EU counter-argued since it builds on other FIFA releases.

Following the quashed judgement, KSA must reimburse EA for the legal costs of the proceedings. This leaves the question of whether previous findings on similar matters may resurface. EA overturned the KSA’s findings on legal technicalities. The regulator penalised Virtual Coin Gaming in 2021 based on FUT offerings to Dutch gamers.

In this matter, the Curacao-licensed operator offered games to Dutch players that used virtual currency and exchange methods linked to FIFA Ultimate Team. At the time, KSA classified these as games of chance and the operator subsequently faced penalties of more than half a million euros.

 A Question of Ethics

These and other technicalities, like the economic value of loot boxes, keep regulators from pursuing accountability from gaming developers. The hotly debated topic of loot boxes and similar features of games accessible to children dates back to 2017, and regulators across the globe voiced their concern. Reports show that the UKGC may address it in their upcoming Gambling Act reform.

One of the major concerns is the availability of these gambling-type products to children and young adults. With studies from the University of Plymouth and Wolverhampton showing links between loot boxes and problematic gambling, we can only wonder how long governments will take before applying the rule of the law to these gaming options.