The Netherlands joins Belgium in investigating lockboxes as games of chance

Earlier this week, we reported on a move by the Belgian Gaming Commission to investigate lockboxes/lootboxes in games like Star Wars Battlefront 2 to determine whether they constitute games of chance to the degree that they require regulation meant for gambling. Now it appears the Dutch have joined them.

According to NU.nl, the Dutch Gaming Authority is also investigating whether this particular game mechanic falls under the banner of online gambling, which according to the news outlet is currently banned in the Netherlands, while games of chance on the whole are subject to special licensing rules. According to the regulatory group, it is “still in a research phase.”

EA has insisted that Star Wars Battlefront 2’s lootcrates “are not gambling” for all the usual reasons online gaming studios trot out to confuse people about what games of chance are: that players win something, even if it’s lint, and that players can earn crates via play. Last night, the company announced it was disabling all microtransactions while it sorted out the continuing uproar.

Source: NU.nl via Eurogamer. Cheers, Veldan!
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60 Comments on "The Netherlands joins Belgium in investigating lockboxes as games of chance"

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Anthony Clark

It’s gambling plain and simple.

You’re buying a CHANCE to get what you really want.

It’s just a new form of digital gambling. It’s not complicated, people.

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Sally Bowls

While you can dislike a gaming company for a myriad of reasons, laws need a basis. So is a country going to regulate them because they are gambling or because they exploit consumers? The former seems to have some technical requirements.

The latter is one where Bree and I disagree. After the NY terrorist event a couple of weeks ago, I was watching ABC evening news and saw a repackaging of this.
http://abcnews.go.com/2020/video/marine-discovered-teen-son-talking-isis-recruiters-part-50923791

Texas ex-marine turns his son in after he had been radicalized by a terrorist group and before he was going to murder again. Around 6:12 in this they show clips from a video game while the reporter’s voiceover is “his fantasies of heroism from the violent video games have become reality.” There is a lot of evidence that violent video games are not that harmful. But I do think a poll would reflect that a lot (majority?) of voters think that way. I could easily be wrong but I think if a “there’s trouble right here in River City” politician were to go after video games, that lockboxes would not be the only thing attacked and probably not the first.

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Brother Maynard

So is a country going to regulate them because they are gambling or because they exploit consumers?

They can do both.

However, in this case the investigation is done specifically by institutions overseeing the gambling industry, so any action they may decide to take will in this case most likely only apply to gambling practices.

Of course that doesn’t mean that consumer protection authorities may not join in if EA (and others) are suspected of breaching the consumer protection law.

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Necromonger

No matter if its real gambling, pay to advance or any other sort of boxes it has no place in our games.

I hope more nations just use a banhammer for these games so the industry feels they have turned into a dead end and stop this nonesence.

They need to go back and make games like we have always bought games and not put effort done to unlock into spend money to unlock.

Its a cancer in any form or shape.

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drgreenhoe

What did they expect. The man wants his piece of the action. Regulate, tax inspections and fees.

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Dro Gul

And hopefully the whole lootcrate industry comes tumbling down

Skoryy
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Skoryy

Jack Thompson’s currently hitting up Travelocity for the lowest fares to Brussels and The Hague.

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rafael12104

As I said before, IF anything really does happen in terms of government oversight it will not be here. EU, yes, a possibility.

Remember their battles with Microsoft over Internet Explorer? If they grab hold, they will not let go even if out maneuvered legally.

So, we can’t count on Britain, they can’t seem to find an exit, but Germany and France? They might be willing to do it IF Belgium and Neths investigations are fruitful.

And in my view, as a trading block, the rest will follow easily.

LOL! Could it be?

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Schlag Sweetleaf

.

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rafael12104

LOL! Did you do the translation yourself? Talented.

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Schlag Sweetleaf

google fu:) I’d bet thats not how it’s said though..

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rafael12104

Well done my friend. Well done. LOL

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A Dad Supreme

“Whoaaaaaa… I think he’s right. These …*puff*… weren’t the ones we’re …*puff*…looking for. No child gambling boxes here.”

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A Dad Supreme

People. It’s the Dutch Gaming Authority.

I know these are exciting times but… let’s get a grip lol.

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Jack Pipsam

Don’t diss the Dutch.

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Armsbend

Who is part of the EU.

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Utakata

It would be if PEI (Prince Edward Island) where to legalize crystal meth…and despite it being a tiny tiny island, I am pretty sure the rest of Canada (my jurisdiction) will have something to say about that, for example. So Mr. Supreme should not be discounting the size of the country in having sway over the rest of the Union (if that what he’s doing).

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Utakata

…or maybe that wasn’t the best example. :(

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Gadgets-4G

We live in a society filled with people chomping at the bit to scream about something. Anything. This could well be the next thing. And I for one think that these companies should sell skins without the random. Let’s see how it plays out.

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teppic

I knew this would start happening soon, and since game studios will keep using these shitty lootboxes to rake in the cash until there’s regulation, it can’t come soon enough.

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jay

Honestly this news is amazing. I abhor lockboxes, and will be more than glad to see them go. The question that remains though, what other way will these studio’s figure out to part players with hundreds of dollars a month?

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Serrenity

oh I’m sure they’ll come up with some way — EA and the like aren’t likely to die quietly, or quickly. But we can hope that once the first domino falls, that the legislation will be quick(er) to respond to further attempts to exploit gamers.

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Indigo Salma

So basically everyone was waiting for one of the others to stand up and do something about this then slowly others are following.

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Gadgets-4G

They were waiting for something to force them to do something. the BF thing just pushed the last button.

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Darthbawl

Their stock is/was feeling the burn as well. I hope the folks at EA have their asbestos undies on, things are heating up.

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TheDonDude

Out of curiosity, why don’t traditional gambling methods (lotteries, slot machines) use this ‘trick’? i.e. have a slot machine that costs a dollar to play but always awards at least 10 cents back.

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Sally Bowls

Because the three $0.10 has obvious monetary value. The three requirements for gambling in the US are consideration, chance and prize. Prize must have value, including but limited to money.

A slot machine that sometimes gave you $0.10 is clearly gambling

A slot machine that sometimes gave you a one ounce silver coin is clearly gambling, there is a valuable allbeit not cash prize.

A slot machine that sometimes only gave you a friendly beep is clearly not gambling, there is no monetary/valuable prize.

The question to be decided by the courts is what if the slot machine sometimes only gave you a GW2 mount? Is a GW2 item deemed valuable by the government for these and taxing purposes?
If it is not “valuable” in the legal sense, then it is hard to see how it is gambling – there is no monetary prize.
If it is “valuable” in the legal sense, then it is hard to see how random drops from a boss are not just as taxable as random drops from a lootcrate.

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Gadgets-4G

“Prize must have value, ”
Must have value as the items are also sold on markets. They cant say skin A has no value and then disallow the selling of skins because it constitutes gambling which they decided about CsGo I think last year.

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Serrenity

I think the determining factor in the CS:Go was that the gambling was a violation of ToS in after-markets, which is how they escaped culpability.

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Serrenity

The question to be decided by the courts is what if the slot machine sometimes only gave you a GW2 mount? Is a GW2 item deemed valuable by the government for these and taxing purposes?

Current precedent in the cases I looked at for my blog pieces were that the GW2 mount did NOT have value because it couldn’t be translated back into legal currency. I think when (not if) a judge decides that digital good are inherent valuable, things get hairy for gambling mechanics.

If it is “valuable” in the legal sense, then it is hard to see how random drops from a boss are not just as taxable as random drops from a lootcrate.

I think boss battles are missing the ‘risk’ component as the ‘risk’ also has the value requirement applied and I think in most cases the cost of the game / time probably aren’t going to satisfy ‘risk’ in that regard.

The ‘chance’ component gets a little iffy too because there’s a certain amount of skill required to earn the drop — it would just be up to the courts to determine if ‘chance’ is a preponderance of an impact on the outcome, even if skill is involved (I read a court opinion on this, but I can’t recall which one of the 20 or so I read it was). I think it’s important to note that random chance does not automatically qualify a mechanic for gambling and I think you’d find a judge hard-pressed to make that kind of blanket statement.

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Sally Bowls

If loot has monetary value under the law (which the game companies view that it does not seems to be the current law), I was not saying a boss drop was gambling – I was saying it was taxable. Risk & chance no longer matter; this is no longer about gambling.

If ANet gives me a check for $1000, then that is a taxable event. If ANet gives me mounts valued (“arms-length, fair-market) at $1000, then that seems like a taxable event as well. I just don’t see the IRS buying the argument that “I got $1000 worth of mounts but should not owe taxes because I was top DPS”

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Serrenity

I shrug. No idea how to navigate that

Alfredo Garcia
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Alfredo Garcia

Makes sense. Once you start monetizing individual game assets then those assets, by definition, have measurable monetary value.

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Serrenity

Because there are 3 pillars in the legal common understanding of gambling: Consideration (risk), Chance, and Reward. The common requirement is that that reward be potentially greater than the risk — the ‘win’ state isn’t really important. its the potential value of the win-state that matters. So even if slot machines always gave back $0.10, they would still be gambling because the potential reward is many times the original consideration (risk).

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TheDonDude

Neat! But I mean more along the lines of what loot boxes do. i.e. imagine a $1 slot machine that might give back $100, but is much more likely to give back 10 cents. Thus the potential reward would be greater than the risk.

edit: oh wait, maybe I understand. Do you mean that the difference is that loot boxes cannot give back more value than what was risked? i.e. even if you get a mega super ultra rare piece of gear, it isn’t technically worth more than the $5 you paid for the loot box?

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Serrenity

re: value of the reward. That’s actually the kind of the rub, and how currently publishers like EA are avoiding gambling laws right now — they claim that there is no ‘reward’ because the reward from the lockbox has no value. They justify this a couple ways – relying on the assumption that digital goods have no value inherently, and that digital goods have no value because they can’t be exchanged back into legal currency without violating the ToS of the game (via an underground third-party market.)

So in your example, the current legal precedent is that you spent $5 on a lootbox, no matter the contents, the value is effectively $0, meaning it doesn’t satisfy the “reward” aspect of the pillars of gambling because the reward must be something of value — and value is determined by legal currency.

Other courts have found that lockboxes aren’t gambling because they say they fail the ‘consideration/risk’ test because you always, always, always purchase lock boxes with in-game currency, not legal currency. Moreover, that in-game currency cannot be turned back into legal currency without violating the game’s ToS in almost every case — so because you aren’t risking anything when you purchase with in-game currency, it’s not gambling.

Now there are some pretty obvious oversights in the courts current thinking, and the second some judge decides that virtual goods DO have legal value, things get a lot more complicated for these types of mechanics because it’s then a lot harder to claim they don’t meet the risk / reward requirement.

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Kherova

EA got themselves into a real mess. They completely underestimated player reaction to a buy-to-win system. Whether it is gambling I’m not so sure. This will altogether hopefully cost them more than what they got from it. Hope the whole gaming industry takes notice!

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Armsbend

I think they only underestimated the fact that some national publications decided to run with the story. Gamers react all the time and it blows over most of the time.

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Gadgets-4G

In over twenty years of gaming, the only thing that even came close was the NGE and no one was talking about the legality just the stupidity.

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shear

It’s definitely gambling by the definition of gambling.
“take risky action in the hope of a desired result.”
I am looking forward to seeing what comes out of this though.

venatis
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venatis

I have very little hope anything will be done, at least nothing major. There might be a small shakeup, but whether they will be removed any time in the future is debatable. A small shakeup is better than nothing I suppose, but when businesses lose one way to exploit people they always find another, but this is something that has gone on for far too long.

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Simon F

“EA has insisted that Star Wars Battlefront 2’s lootcrates “are not gambling” for all the usual reasons online gaming studios trot out to confuse people about what games of chance are: that players win something, even if it’s lint, and that players can earn crates via play.”
Now you’ll be guaranteed to get at least 10% of your money back when playing at a casino. Therefore it isn’t gambling. Good and solid logic.

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Gadgets-4G

I think that skin business with CSGO kind of gave this a little more legroom. By defining the betting of skins on matches as gambling they by definition gave those skins an inherent value. You cant say skins in one game are different from those in another so one of the three tenants is set.

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Sally Bowls

I don’t understand the claim that “You cant say skins in one game are different from those in another”

Valve also designed a separate marketplace called Steam Community Market (‘Steam’) which allowed users to purchase virtual items for real money and also trade in those items with other users.

I.e., there is/was a marketplace to buy/sell/trade and an API so others can do an efficient job of discovering a fair market value.

The CSGO skins have monetary value. There is little difference between going to a website and betting/risking $1 cash versus betting/risking a skin that is worth $1 – i.e. that sells for $1 in a skin marketplace.
38 Million people visited the website CSGOlounge.com in March, 2016. Of the total esports gambling market of USD 8 Billion in 2016, around USD 7.4 Billion was through Skin Gambling and only around USD 600 million was gambled through cash.

In my experience, that is/was unique to CSGO. Someone with CSGO skins could easily cash them out or use them to gamble. I do not know of anything similar for other games. IMO, someone with $1,000 of GW2 (or other game) items would have a far, far harder time to bet/monetize them than a CSGO skin owner. IMO, IANAL, there is a large difference between other games and CSGO skins to affect the legal status.

Coolit
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Coolit

Good on them, hopefully more and more governments will do the responsible thing.

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Rhime

Awesome! Buh bye lootbox and (hopefully) cash shop bullshit. Hello subscription and full games for players.

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cerement

As long as gaming companies treat us like marks rather than human beings, we’re going to continue seeing this shit. They’re going to spend more time trying to circumvent the restrictions rather than behaving.

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Sorrior Draconus

SOME games can do f2p right see warframe and be careful might impact oldschool expansions and all that.

However overall agreed we NEED more full games and for lootboxes to go.

Maybe limit business model s to b2p, or f2p with micro or p2p but no combo therin

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Armsbend

We are so far away from that. But we will get there. Equating it to gambling and tying in children is the key. A disaster is coming for the industry I’ve been waiting on it for quite some time.

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Serrenity

I would guess about 18+ months, and maybe a few in change to studios to make adjustments once legislation goes into effect. The gaming industry will definitely shrink once all this shit hits the fan, but I have faith we’ll come out better on the other side of all of this.

I mean, not that I have any faith the current state of American politics is especially interested in protecting it’s citizens from much of anything at this point. But the rest of the world ought to be doing pretty good by the end of all of this.

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Dušan Frolkovič

The thing i am most afraid of, is that will first try and add some form of minigame to the lockboxes. Go the “skill vs chance” route, which would open a whole other can of worms.

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Serrenity

Possible, but one of the cases I read where they explored this (tangentially related to gaming), the skill vs. chance ratio was pretty fuzzy. For example, the court found that poker was still gambling despite the fact that they estimated poker to be 75% skill and 25% chance (or some similar ratio). That would be a super risky path to go because there’s no clear demarcation.

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Dušan Frolkovič

That is exactly why i am afraid, cause if they force a precedence, how long till card game tournaments (Netrunner, AGOT) or board game tournaments get marked gambling. I am not sure i want my local gaming store be labeled a casino because of that.

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Serrenity

FWIW – that line has to exist someplace. For example, there are tons of random chance events in most sportball games – but we don’t consider those gambling despite the fact there’s both skill and chance involved. I feel like there’s some undefined ‘gambliness’ virtue that exists that helps us make these determinations.

I think I’ll write a blog post about it actually (doing one right now on next steps now that EA was caught with their pants down) but I think it’s really really interesting that there’s some distinction there between games and gambling that we seem to inherently understand, but can’t define

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Dušan Frolkovič

I would say there is a similarity with other things like e.g. drugs.
You can very easily tell between extremes, but the closer you get to the middle zone, the harder it will become to define, down to people just having different opinion of what still constitutes the thing and what does not. For sure a highly interesting topic.

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Armsbend

Come on France, Germany, UK…YOU GOT THIS! I believe in you my European brothers and sisters!

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rafael12104

It could happen. It really could.

Line
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Line

Looking at the people in charge, the UK is laughing heartily, while France and Germany will only do so when it will let them undercut the opposition…

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rafael12104

Ah, but then there is Brexit.

What I mean is, and this is pure fantasy at this point but weirder things have happened, with UK’s exit, the EU may take a stand against this as a method to unify.

Not likely? How likely was it that EA would pull there lootbox scheme at the last minute? Some times the dominos fall the right way.

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Cypher

Sad but true.

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