Austria’s Evolving Legal Landscape on Loot Boxes and In-Game Purchases

The Austrian Court and EA’s FIFA Ultimate Team Packs: Not Gambling

A recent court ruling in Austria (we reported earlier on loot boxes in Austria and the case law) provided Electronic Arts with a legal win regarding FIFA Ultimate Team (FUT) packs, which are randomized in-game items players purchase to enhance their teams. The court found that FUT packs do not meet the legal criteria for gambling under Austrian law, allowing EA to maintain its business model. The reasoning behind the decision hinges on Austrian gambling definitions, which require players to stake money for a chance to win money or items of equivalent real-world value. EA argued that FUT packs do not hold real-world monetary value since they cannot be officially converted back into cash.

Despite this ruling, the debate around FUT packs is far from over. Advocates for stricter loot box regulations point out that while players cannot legally sell their virtual FUT items, black markets still thrive where players sell entire accounts or specific in-game items for cash. This grey area raises questions about whether the court’s decision fully addresses potential gambling-like risks associated with such randomized in-game purchases.

The ruling in EA’s favor is a significant precedent in Austria, particularly for developers of games with similar mechanics. While this decision may temporarily shield EA, legal experts suggest that regulatory bodies in Austria and other European countries might still push for clearer guidelines to regulate loot boxes. This effort is motivated by growing concerns about their impact on younger gamers who may not fully grasp the nature of these transactions.

Valve’s CSCase Ruling: Mandatory Refund for Illegal Case Purchases

While EA saw a favorable outcome, Valve, the developer behind Counter-Strike: Global Offensive (CS), encountered a contrasting result. In a case filed by an Austrian CSplayer, the court ruled that the game’s loot box system constituted gambling under Austrian law and mandated that Valve refund the player approximately EUR 15,000 spent on in-game cases. CScases function similarly to loot boxes, where players pay to open cases that yield random weapon skins, some of which can be quite rare and thus valuable in secondary markets.

The CSruling illustrates a key difference in how Austrian courts assess in-game purchases. Unlike FIFA packs, where items cannot legally be sold for cash, CSskins have a robust and highly lucrative secondary market where they are bought and sold for significant sums. This ability to monetize virtual items was a critical factor in the court’s decision. By allowing a cash-out mechanism, even indirectly, CScases resemble traditional gambling under Austrian law, where there is a financial stake and a chance to win items with real-world value.

Valve’s situation highlights an interesting aspect of Austrian law: cases involving loot boxes or in-game purchases are assessed on a case-by-case basis. The determining factor often hinges on the item’s ability to be traded or sold outside of the game environment. Legal experts predict that this ruling could lead to a wave of similar claims in Austria, potentially incentivizing regulators to create a unified framework for these types of in-game purchases.

Sony’s PlayStation Store Loot Box Refund Mandate

Another notable ruling involves Sony, which was ordered to issue refunds to players who purchased loot boxes through the PlayStation Store. In this instance, the Austrian court determined that certain loot box mechanics used by Sony resembled gambling, thus entitling players to refunds. Like the Valve case, the Sony ruling underscores the court’s focus on whether players could potentially receive items with real-world value from their in-game purchases.

Sony’s case brings up important considerations for platform holders like PlayStation and Xbox, as it suggests that courts may hold them accountable for third-party loot box transactions. Sony’s case could set a precedent where platform providers are seen as equally liable for potentially gambling-like purchases on their platforms. This prospect could prompt companies to reassess the risk of hosting games with randomized in-game purchases, especially in jurisdictions with strict gambling laws.

Key Takeaways: The Fragmented Legal Landscape and the Future of Loot Box Regulation

These Austrian rulings showcase a fragmented legal landscape for loot boxes and in-game purchases, with outcomes largely dependent on specific game mechanics and the ability of players to monetize their purchases. For the gaming industry, this uncertainty presents operational risks and strategic challenges. Game developers and platform providers now face potential liability based on the specific design of their in-game purchases and the ease with which these items can be traded or sold outside the game.

The rulings highlight several critical points for stakeholders in the gaming industry:

1. Mechanics Matter: Courts scrutinize whether players can monetize items acquired through loot boxes. Games with marketplaces or trading capabilities are at higher risk of being classified as gambling.
2. Liability of Platform Providers: As seen in Sony’s case, courts may hold platforms liable for third-party loot box transactions. This could compel platform providers to exert greater oversight over games that incorporate loot box mechanics.
3. Consumer Protection and Refunds: Austria’s rulings indicate a willingness to side with consumers, mandating refunds for in-game purchases deemed gambling. This trend could encourage similar claims across Europe.
4. Evolving Regulatory Landscape: These cases illustrate the need for consistent legal frameworks across countries to address loot boxes. As each ruling is heavily influenced by specific game features, developers face growing uncertainty without harmonized regulations.

A Call for Clearer Guidelines

Given the rising number of claims and differing outcomes, developers and regulators alike are calling for clearer guidelines. Some countries, such as Belgium and the Netherlands, have outright banned certain loot box mechanics, while others continue to assess cases individually. The European Union is also considering unified legislation to clarify the legal standing of loot boxes and protect consumers across member states.

In conclusion, Austria’s rulings present an increasingly complex challenge for game developers and platform providers. The varying decisions underscore the importance of closely examining in-game monetization strategies, particularly regarding the resale potential of virtual items. For the esports and gaming communities, these cases serve as a reminder of the growing scrutiny on gaming mechanics and the need for industry stakeholders to adapt to an evolving legal landscape. As the debate on loot boxes continues, Austria’s cases may shape future legislative efforts across Europe, potentially creating a more predictable and fair gaming environment for players worldwide.

With material from Härting Rechtsanwälte and Gamesindustry.biz

ELN inquired the Austrian courts for copies of the decisions.