Is There A Crafty Way to Make Money from Loot Boxes?
Can you make money from loot boxes? Probably not, but there’s an interesting development happening in Canada right now. Two Canadians are taking legal action against EA over loot boxes.
The two Canadians have registered a class-action lawsuit against EA for its alleged violation of Canada’s Criminal Code due to its use of loot boxes. “Esports and gaming law blog”, The Patch Notes, was the first to break the news after a third-party informed them of the case, which was filed in one of Canada’s court registries back in September 2020. It is unusual because the mainstream media have not picked up the story.
What’s the Charge?
The Canadians are seeking, “damages for unjust enrichment arising from defendants’ operation of an illegal gambling system through the sale of so-called ‘loot boxes’ in popular video games.” In other words, they’re suing EA because they believe loot boxes are gambling and that EA is operating illegally in Canada in respect fo loot boxes.
Why Is Gambling Illegal?
Gambling is not illegal in Canada, but it is heavily regulated. The two Canadians argue that EA is not operating its loot boxes in a way that is consistent with Canadian laws. For example, EA does not publish the odds of winning a prize when buying a loot box. They also make it difficult to progress in the game without purchasing loot boxes. The Canadians also argue that loot boxes break consumer protection laws, too.
Gamers from all around the world are angry about EA’s loot boxes. In the UK, we had thought we’d settled the issue back in 2019 when the Gambling Commission ruled that look boxes did not constitute gambling. However, a House of Lords Select Committee has advised that the UK redefines loot boxes and brings them under the control of our gambling laws.
But a Class-Action Lawsuit?
An extremely over-simplified definition of a class-action lawsuit is a lawsuit not taken on behalf of an individual but on behalf of a whole class of people. In this instance, that class is all Canadians. So the two Canadians are suing EA on behalf of all Canadians who have bought EA loot boxes since 2008.
Surely EA Will Win?
Given that EA is a huge corporation and the two Canadians are just two individuals, you might expect them to have zero chance of winning the case. But, there’s a team of highly skilled legal professionals supporting them, professionals with experience suing large corporations.
Don’t expect EA to surrender quietly, though. If they’re found to have breached gambling laws in Canada, it may only be a matter of time before other countries follow suit. Therefore, EA has a vested interest beyond winning the individual case.
What Happens If EA Lose?
Although the Canadians are suing EA for breaches to the Criminal Code, they are doing so in a civil suit. Therefore, the case will not go through the criminal courts. This means that EA will not face criminal liability.
However, that doesn’t mean that EA will walk away scot-free if they lose. They could face a hefty penalty if the civil courts rule against them.
And that’s probably the only way you’ll ever be able to make money from loot boxes! But then again, is it really making money when you’re just getting back what you spent? It depends if the courts put on a bit extra as legal redress.
Disclaimer: we are not advising any of our readers to attempt to undertake anything above. I am not a lawyer and this blog should not be considered legal advice. You should seek appropriate counsel and we disclaim to the fullest extent permitted by applicable law and all liability with respect to any mistakes, omissions, and suggestions made in this blog.