Belgium begins criminal investigation into EA’s noncompliance with gambling laws as lockboxes remain in FIFA

    
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Activision-Blizzard and Valve may have cooperated with European nations’ lockbox demands, but apparently EA won’t be playing ball.

You’ll recall that at the end of last year, Belgium’s and The Netherlands’ gaming regulatory bodies began in-depth investigations into the mechanics and effects of gaming lockboxes of all stripes; ultimately, Belgium’s report, endorsed by the country’s Ministry of Justice, found lockboxes in specific games – Overwatch, FIFA 18, and Counter Strike: Global Offensive – violate its laws in regard to lockbox gambling. All three games and their respective companies were threatened with prison time and fines if they didn’t comply with the law.

Valve and Blizzard have both done so, shutting down lockboxes purchases for players in affected regions – Overwatch was updated just a few weeks ago, in fact. But as RPS noted last night, multiple Dutch newspapers are reporting that EA has not complied and continues to sell lockboxes in FIFA via its – I’ll quote RPS here – “notoriously exploitative” card-collecting mechanics. One paper, Metro, noted that the public prosecutor’s office in Brussels is working on a criminal investigation of EA over the situation.

Worth pointing out is that even at the height of the lockbox outrage last year, EA persisted in claiming that Star Wars Battlefront 2’s lootcrates “are not gambling,” so it’s not a huge surprise that the company has dragged its feet here and might just be willing to face down an expensive court battle to fight for its right to lockbox its players.

Source: RPS, Nieuwsblad, Metro

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April-Rain
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April-Rain

Plain and simple they should be no payable loot boxes in any games for the under the ages of 18.

EA have taken advantage of children especially in FIFA with the card packs.

Why not have a age lock in the game, under 18 and no in game purchase or shop to browse, over 18 and gamble all you want it would not be hard to do and would be a more responsible attitude by EA.

But they will never do anything like that as the majority of purchases comes from children and dress it how you want but it is gambling or even worse a pathway to gambling and a life of misery.

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dinwitt

I just want to thank you for reporting this accurately. A lot of people are mistakenly thinking that Belgium is outlawing lock boxes because they are gambling, but the report explicitly mentions they aren’t gambling. Just that they are in violation of the Gaming and Betting act.

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J

If anyone needs to be taken down a few notches, its EA. I hope their resistance backfires in their faces and expedites the spread of such policy across the EU.

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Kickstarter Donor
Tandor

Whatever their motivation may be, I’m glad a developer with the financial status of EA is willing to contest such a restriction on freedom of choice. Not because I have particularly strong views for or against lockboxes, but because whenever a bunch of politicians decides to restrict people’s freedom of choice it is important that their actions are fully tested in an appropriate court of law.

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Bullet Teeth

Just as it’s my freedom of choice to be exploited, it’s EA’s freedom of choice to exploit the players? Is that what I’m seeing?

You forget, I’ve paid 60 dollars for the fucking game. I should be able to play the fucking game without being pressured into buying more lootbox shit. The entire lootbox idea is there to circumvent the inherent grind that MANY games have – such as SW:BF2, FIFA’s Ultimate Team concept, Destiny 2’s Eververse, etc – to get the best possible items in the game much quicker and without any effort.

So you’re telling me that the DEVELOPERS who DEVELOP the game around a grind shouldn’t be responsible for exploiting the players, but rather it be simply “freedom of choice”?

….the fuck outta here. It’s GAMBLING. You are aware what gambling is, right? You pay X amount of dollars for a CHANCE at X items. It’s not freedom of choice there, sport. It’s A GAMBLE. A WAGER. A BET. A LOTTERY. A RAFFLE. AN ANTE.

It’s GAAAAAAAAAAMMMMBLIIIIINNNNG!!!

And if you’re committing irregulated GAMBLING, it’s ILLEGAL!

See how that works?

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Arktouros

There’s a lot to untangle here.

Yes it’s your freedom to choose what kinds of business models you partake in. These aren’t necessity products or services (IE: Food, eletricity, etc). They’re a video game. An entertainment product. The big adjustment the video game players have had to make over the last decade is that video games have become more like traditional entertainment industries that try to upsell you on the base entertainment product. For example when you go to a movie theater buying tickets with more comfortable chairs or food products or 3D movie instead of the standard film. You can look at anywhere in our day to day lives where paying more gets you more advantage, it was only natural that such would make it into video games as well. They’re still optional. You are 100% free to take your business for an entertainment product elsewhere if you object to their business model.

That also means there are those of us who would rather not have a politician or a government telling us what we can and can’t do because you (and others) don’t happen to like the particular business model. Most people default to crying out scenarios like “Think of the children / addicts!” however the truth is the number of real world cases that those are problems in are relatively minor. No business is realistically looking to prey on or hook children, they’re often times a bigger headache than they’re worth.

Finally we come to gambling. I get the argument, but the difference between what feels like gambling and what actually is gambling is huge legally speaking. The biggest issue presented is that many cases gambling revolves around the items received as having value. Most video game developers stick by the argument that virtual property has no value therefore it can’t be gambling because you’re spending money and getting nothing of value (lol, yea, it’s funny). If they have value then that creates a whole can of worms on the value of virtual property. Like if I pay $100 for items in game that now suddenly have value, and they want to ban me, can they ban me and steal my $100 worth of property? That’s why in the case of the Netherlands they said it’s only gambling if the items can be traded beacuse by being traded the items get value.

Belgium of course wanted to be extra special and said so long as anyone values something it’s valuable which that wonderfully vague nonsense creates all sorts of legal issues with game design.

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Schmidt.Capela

Belgium of course wanted to be extra special and said so long as anyone values something it’s valuable

Not quite. They just decided that, for the definition of gambling, “gain” doesn’t require monetary value; it only requires that the gambler values it. Which, as I said in another post, creates a catch-22 situation for lootboxes in that if someone is willing to pay for a chance to get something, it automatically means the person values it.

This decision, thus, doesn’t open the Pandora Box of equating virtual property with real property.

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Schmidt.Capela

This isn’t about restricting any freedom; it’s merely about acknowledging that lootboxes are gambling and treating them as such.

BTW, in Belgium the core reason for regulating gambling seems to be to prevent gambling addiction, which is why they focus more on the addictive qualities of gambling (which lootboxes intentionally attempt to replicate) than on the nature of the prize.

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Arktouros

It 100% is about restricting freedoms though.

Basically the government stated that here’s this thing they think is harmful so they’re going to protect their people by removing their ability to have it. Now you can take that scenario and apply it to any number of things that are potentially harmful and any number of them will boil back down to the basic scenario where we’re taking away people’s freedoms so they can be safe from the negative side effects of those freedoms.

Now you can certainly 100% also say that the cost of giving up that freedom is worth it but personally speaking I just don’t see it is. Thankfully I live in a country where such overly protective nonsense fails to go anywhere after a few clever sound bites.

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Schmidt.Capela

Not removing; rather, regulating. As I said in another post, gambling (including online gambling) is legal in Belgium, it just has to comply with that country’s regulations.

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Stropp

Thats the case with all law though. Laws by their very nature dictate what you can and cannot do and apply penalties for non-compliance. All laws are restrictions on freedom. The law states that you do not have the freedom to kill someone you dont like, or steal someones stuff because you want it, or copy a game because you cant afford it.

In this case the people of Belgium have decided (through their representatives) that lootboxes are gambling and that they need to be regulated to prevent the exploitation of children. They are saying that no company has the automatic freedom to let children gamble.

This of course can be tested in the courts, and EA is free to do so. But what they are not free to do is to ignore the laws of the country they are doing business in.

Moreover if the people of belgium disagree they are free to change their reps to a more sensible bunch. Tthough this issue isnt likely to be much of a vote changer.

Also as a sidenote, the US is also guilty of litigating over protective nonsense. The recent attacks on craigs list by various state attorney generals for allowing sex workers to advertise their services is a case in point. Jo one is immune to the nanny state.

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Sally Bowls

As a gamer, I hope this is not the case. Gaming addiction is also a WHO listed condition. Why would a country that cares about its citizen try to protect them from gambling addiction but not gaming addiction? Both/neither seem logical, but once they are starting to protect the citizenry (a/k/a “remember the children”), why would they only address the addictive harm of gambling but not gaming? E.g., restricting gaming to only 21+-years old would seem to protect minors from both addictions.

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Brother Maynard

Why would a country that cares about its citizen try to protect them from gambling addiction but not gaming addiction?

Some do – see the recent articles about China.

why would they only address the addictive harm of gambling but not gaming?

Because there’s a large number of steps you have to take to go from a regular game for kids to full-on online gambling. Thankfully, most regulators are very well aware of the distance that separates the two extremes.

You have to distinguish between normal game play (not just digital – any type) through which humans learn and explore the possibilities of social interaction; and targeted predatory practices exploiting the weak in order to further increase the profits of a few individuals.

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Necromonger

No this is pure praying on those weak minded players who cant stop themselves from buying this cancer.

It is gambling, tons of people have problems with gambling, it is extremely addictive to a certain amount of people and for this reason they should ban those boxes.

You might not havea single problem, I might not give 2 shits about boxes but your brother or sister might have a major problem with it.

I hate goverments, i really do especialy in the EU but this thing is a good thing as that shait should not be in our games.

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draugris

It´s not freedom what you want, there is another word for it, it´s Anarchy. People have to be protected from shady business practices of multi million $ corporations.

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Kickstarter Donor
Serrenity

As I’ve said before, what I think will be the downfall of lock-boxes isn’t going to be that suddenly and magically become gambling because reasons, at least in the US. Most of the existing cases against lock-boxes fail on the standard of a “thing of value,” meaning that the reward from the lock-box must have value. Currently, shady games try to circumvent this by saying in their ToS that the rewards have no monetary value, and then in court rely on an inherent bias that digital goods don’t have value.

There’s also some argument that there’s no consideration because everyone who uses lock-boxes also creates a fake digital currency between the actual legal tender and the lock-box reward. BUT there’s already precedence to indicate that fake digital currency already qualifies as consideration.

SOOOOOOOO what I think will happen is that in a completely unrelated case a higher court will determine that digital goods inherently have value. Based on that precedent, rewards have value from lockboxes — consideration has been satisfied by the fiat currency, we already know there’s a chance / lack of skill involved, and there’s value in the reward. At that point, gamblingboxes then meet the legal definition of gambling and the whole house of cards collapses.

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Schmidt.Capela

Most of the existing cases against lock-boxes fail on the standard of a “thing of value,” meaning that the reward from the lock-box must have value.

This is where the Belgium Gambling Commission has changed the game, at least in Belgium; they decided that “thing of value”, as defined by the Belgium laws regarding gambling, is anything the person values, regardless of whether or not it has monetary value. This leads to a catch-22 situation in that if the player is willing to pay for one or more lootboxes in order to get a prize then that in itself is proof that the player values the prize, and thus the lootbox automatically fulfills the “thing of value” gambling test.

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Arktouros

However this is just Belgium and only Belgium. In every other country this topic has been presented so far they have decided otherwise. In the next nearest case was in Netherlands, which they said items only had value if they could be traded. In other parts of the world, such as in the US, such legislation has stalled or was never created as relevant government agencies regarded them as not gambling.

I’d really love to see someone like Youtuber Law weigh in on the topic from a legal perspective on what that potentially means as you have something illegal in one part of the EU but not anywhere else.

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Schmidt.Capela

The Netherlands report does make it clear their Gambling Commission will lobby to get the law changed in order to regulate lootboxes, though. Similarly, the Belgium Gambling Commission says they will work to change the law should they lose in court. This could have a ripple effect across the EU; it’s too soon to tell, but the amount of support and political will does make this scenario possible, perhaps even plausible.

On the other hand changing the laws is a slow process, so I would expect this to take at least a few years even if the Netherlands Gambling Commission and the Belgium Gambling Commission are successful.

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Sally Bowls

But doesn’t a thing of value then hit the taxable test? E.g. for many decades the IRS has said that things like bartering which have value result in taxable events. If virtual goods are “things of value” then if I earn them in game, why don’t I owe taxes? If I sell a thing of value, then why don’t I owe sales tax. For a long time, people have been trying to get around paying taxes and the government has been quite strict about shutting down loopholes. I can see arguing that virtual items in a game have no value to both the gambling commission and taxing agencies. Or arguing that it has value to both. But I am skeptical about how it is valuable enough to constitute gambling and not valuable enough to be taxed.

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Schmidt.Capela

You are focusing on the monetary aspect of gambling. The Belgium Gambling Commission seems to focus instead on the addictive aspect of gambling. So, the underlying idea seems to be to regulate anything that you need to pay in order to partake in and that triggers the same kind of pleasure, and addiction, as traditional gambling; whether or not what is gained would have the kind of value that makes it taxable is of no consequence for that assessment.

This approach allows regulating lootboxes as gambling without having to assign monetary value to what you get from them.

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Brother Maynard

But doesn’t a thing of value then hit the taxable test?

It does and it passes the test very easily. All online sales (including in-game stores) are already taxed in the EU.

And I imagine that at some point it will work in the other direction as well, as soon as the tax authorities realise the amount of online trades going on between individuals. No tax system in history would allow such a tasty fish to slip the net…

The fact that this second type of digital transactions has not yet been captured by the tax system does not mean it’s not covered by the legal provisions. It’s simply a matter of tax authorities waking up one day to the new digital reality and going ‘hello, what do we have here?’.

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Robert Mann

To be blunt, they probably DGAF. The people in charge of that aren’t anywhere near Belgium, and they likely won’t care what Belgium has to say until/unless our own laws make it an issue.

Extradition would require that, after all. The treaty in question applies to Belgium and the EU as a whole, and has this line in it: “An offense shall be an extraditable offense if it is punishable under the laws in both Contracting States by deprivation of liberty for a maximum period of more than one year or by a more severe penalty. ”

Since the U.S. has no such offense, no extradition would be made, and Belgium would have made a pointless affectation of a court trial where EA might not even bother to show up, even via digital channels or a proxy. At which point the only thing Belgium could do is ban sales, and their own people would just be upset (although I still can’t fathom why people would be upset at not being abused by EA).

*Our own laws prevent that extradition from happening if we do make a change, as one cannot be punished for things done prior to the law prohibiting them in our nation.*

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Kickstarter Donor
Serrenity

International politics isn’t my forte, but I would think even without extradition, it would block the ‘operators’ (whomever that is in this case, which is its own problem) from traveling anywhere in the EU, wouldn’t it? And Blocking the sale of all EA games (which is likely what would happen instead of a one-off scenario) would be a much bigger deal to EA in the long run.

Again, just spitballing and refusing to believe that EA can just “naw I’m not doing that! NEENER NEENER NEENER!” without consequences.

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Brother Maynard

Since the U.S. has no such offense, no extradition would be made

I’m pretty sure it’s illegal in the US to break gambling laws – just like in Belgium…

It’s not that difficult to issue an international arrest warrant, either.

Edit: wrong post, meant to reply to Robert Mann

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Schmidt.Capela

I believe arrest warrants by EU members are valid across the whole of the EU. Otherwise, given the free transit within the EU, it would be far too easy to avoid punishment by crossing an unguarded, open border.

Also, EU countries are pretty fond of applying fines calculated as a percentage of the company’s global revenue; AFAIK the Netherlands were threatening the companies that sell illegal lootboxes with such fines. So, getting slapped with a fine by any EU country can really sting even if it’s by a small country you almost don’t do business with.

Which leaves me scratching my head, as I believe just ignoring the Gambling Commission was the most idiotic possible response EA could choose, with the potential to cause the largest damage to the company.

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Brother Maynard

I believe arrest warrants by EU members are valid across the whole of the EU.

Not all of them. National authorities must issue a european arrest warrant to have suspects pursued across borders. There are many cases in which national warrants continue to be used and those cannot be applied in another member state – after all, we’re still talking about sovereign countries.

But in any case, I meant the international arrest warrants issued by the national police and managed through Interpol.

EU countries are pretty fond of applying fines calculated as a percentage of the company’s global revenue

That usually happens with EU-wide regulations, though. I don’t really know about any such fine at the national level – individually, none of the member states are large enough to be able to enforce such fines effectively, as their domestic market is too small (Germany could perhaps be an exception, but even that would be debatable).

It’s a different matter when acting collectively, of course, when you have a single market of 28 countries.

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Arktouros

So far, most other efforts to regulate lock boxes as gambling have stalled out or have some specific variation to their laws. Only Belgium has given an overly broad interpretation that lockboxes are gambling.

The outcome of this will be interesting mostly because we’ll get to find out if EA is fighting this issue to send a message to other would be countries who will regulate it or Belgium is such an irrelevant portion of their revenue that they just don’t care.

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Alex Malone

All to support to Belgium! Anything to get such a terrible business model (for the consumer) out of the industry is a good thing.

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rafael12104

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Schlag Sweetleaf

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rafael12104

Oooh, look! We can also buy skins for our loot boxes!

xpsync
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xpsync

lmao, That was good Raf!

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Robert Mann

Meanwhile at EA HQ: “Just think, if this doesn’t inspire enough lockbox purchases we can make the ball really oddly shaped with the physics of a cohesive gelatin blob in order to get people to buy to change that!”