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Video game 'loot boxes' lawsuits suggest gaming, criminal violations

Loot boxes contain virtual items to be used in the game and can be accessed through gameplay, or purchased with virtual currency or real-world money.
Video game loot boxes are the subject of Canadian legal actions.

A series of B.C. and Quebec court class actions is suggesting so-called video game 'loot boxes' could violate both Canada’s Criminal Code and provincial gaming regulations.

One such case was certified as a class action by Justice Margot Fleming in B.C. Supreme Court March 14, meaning the case will go to trial.

Loot boxes are virtual items players can use in a game and are "accessed through gameplay, or purchased with virtual currency or directly with real-world money.”

The B.C. claim “identifies a loot box as a game of chance and skill inside a video game, by which a player plays for a digital 'roll of the dice' and the possibility of obtaining desirable virtual rewards.”

The B.C. litigation targets gaming giant Electronic Arts Inc. and Electronic Arts (Canada) Inc. (EA).

Representative plaintiff Mark Sutherland alleges EA has engaged in deceptive and unconscionable acts or practices under B.C.'s Business Practices and Consumer Protection Act. He further alleges the company has violated the Criminal Code provisions on unlawful gaming or gambling by offering and operating loot boxes. 

The claim is being brought forward on behalf of all B.C. residents who paid directly or indirectly for loot boxes in over 70 of EA's games since 2008.

Sutherland’s amended notice of civil claim said, “loot boxes are considered part of the compulsion loop of game design to keep players invested in a game. Such compulsion loops are known to contribute towards video game addiction and are frequently compared to gambling addiction.”

The court documents state the system is similar to that of slot machines.

The defence

The defendants said no facts had been presented in support of an allegation anyone had been deceived or that there had been a false representation of facts.

“There is no allegation of any incorrect odds representation being made or that there was not a random chance element in the virtual item received,” the defence said in written submissions. “Moreover, it is pleaded that users (knew) that certain virtual items were 'rare,' which by common sense, cannot have given rise to any misapprehension about the scarcity of items.”

Fleming said the defendants overstated the requirements for a deceptive act or practice.

“It is is apparent the pleading alleges the defendants mislead class members by omission by failing to disclose, or inadequately disclosing, that they structured loot boxes to make obtaining valuable or desirable items difficult or nearly impossible, while at the same time promoting the purchase of loot boxes to improve game performance and enjoyment, with the effect that class members were deceived or mislead into spending money in a fruitless attempt to obtain those items,” Fleming said.

However, Fleming agreed with the defendants that the loot boxes have a form of "real world value."

“I agree with the defendants that these statements are bald and conclusory or unsupported by material facts,” she said.

The judge also agreed with the defendants that nothing was pleaded to support the allegation that the defendants’ conduct “forced” players to obtain loot boxes.

In a statement to Glacier Media, EA said, “We’re pleased that the trial court rejected, as a matter of law, the allegations of unlawful gaming.  The court’s decision reaffirms our position that nothing in our games constitutes gambling.”

The law firm

Law firm Slater Vecchio has been filing such claims since 2020. Its lawyers are involved in the Sutherland-EA case.

Firm partner Sam Jaworski said the Sutherland decision “is the first step towards addressing the legal issue of loot boxes in video games, and the negative effect it can have on consumers. This is likely to be a long road, but is one in which we will continue to advance the interests of consumers." 

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