Austrian court rules loot boxes as illegal gambling

The District Court of Hermagor in the Austrian state of Carinthia has ordered Sony Interactive Entertainment Network Europe to repay players after breaking Austrian gambling law by taking payments for FIFA Ultimate Team (FUT) loot boxes (packs).

The court has ordered Sony to repay €338.26 (£299.28) and that FUT packs should be classified as “gambling games that require a licence”.

According to the court, the prizes garnered from FUT packs are down to chance and represent “financial benefit within the meaning of the Austrian Gaming Act” as the football players obtained from the packs can be traded on the in-game transfer market, and it’s possible to make a profit.

The ruling comes in response to a lawsuit against Sony in 2020 in which several players, including a minor, spent more than €400 on the packs.

The case was against Sony and not FIFA’s publisher, Electronic Arts, because Sony was responsible for processing the payment for the packs.

Sony has not responded to the case at the time of writing, but the ruling is not final, therefore the firm still has the right to appeal the decision.

Richard Eibl, MD of the litigation financier Padronus, said: “The verdict is a bombshell for the entire video game industry. Neither in Austria nor in Germany has there been case law on the question of the legality of loot boxes and the reclaimability of payments made.”

Eibl argued that loot boxes should be considered gambling if the purchase is primarily based on a game of chance and secondly has an economic benefit attached to it.

He commented: “The court proved us right and explained plausibly why this was the case with FIFA packs. In terms of staging, Sony is also strongly oriented towards conventional games of chance when buying the loot boxes.

“Audiovisual enticement elements such as fireworks are used to trigger a dopamine release in predominantly male adolescents. It was only through talking to our customers that we realised how addictive the FIFA packs are and how pathological the purchasing behaviour of some players is.”

Padronus has claimed that more than 1,000 FIFA players have approached the firm so far, with the average claim being around €800; in one case, an individual had spent almost €85,000.

At the time of writing, only two European countries, Belgium and the Netherlands, classify loot boxes as gambling.

In the UK, loot boxes are not considered gambling, but in July 2022, former Culture Secretary Nadine Dorries urged game developers and platforms to take more action regarding loot boxes in video games.

This came after Dorries said the forthcoming white paper on the Gambling Act 2005 review would not ban loot boxes.

The government launched a call for evidence into loot boxes in 2020 and, after reviewing the evidence, pushed responsibility away from the government and on to the industry.