Are Lootboxes a game of luck?

Loot boxes are a phenomenon that comes from the Free2Play area in Asia, and is now found in almost all mobile games. There are many problems with loot boxes, both in terms of business and law.

Questions of the legal nature are mainly the question of gambling and the question of whether the implementation violates standards intended to ensure proper price information, in Germany the price information regulation is predominant.

In the next few days I will ask myself a variety of questions about this. Today, the question arises as to whether loot boxes might be gambling elements and, in this case, whether the games in question could be subject to rules of the Gambling State Treaty.

There is a successful article on this question in the legal newspaper ZfWG – Magazine for Betting and Gambling Law. The article starts from the legal definition

After that, there is a gamble,

‘where a fee is required in the course of a game for the acquisition of a chance to win and the decision on the profit depends, in whole or predominantly, on chance. The decision on the profit
depends in any case on chance if the uncertain occurrence or outcome of future events is decisive.”

The article manages to subsume cleanly that even according to the current understanding, the use of loot boxes (at least) in their most common variants is regularly to be evaluated as an offer of gambling.

Even if there are points of attack, as it can also depend on whether items from the loot boxes have an economic value – which in turn may depend on other game design – the risk for mobile game providers can be great and it can be it is recommended that this question may be examined by a specialist.

In any case, it is the case that the supervisory authorities are becoming more and more attentive, the discussion, also inflamed by the events in the Benelux with regard to the admissibility of loot boxes. This is particularly true when one considers that the criterion of ‘economically equal or higher value’ profit does not result directly from the law, but constitutes an unwritten element used by the case-law. It would therefore be conceivable that such an adjustment could be made in the near future by merely clarifying the case-law. There would be no need to change the law of its own. Timely legal regulation is to be expected and providers should take precautions to do so.

The complete, very legal article can be found here.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.