Loot box lawsuit claims Electronic Arts ran an 'unlicensed, illegal gaming system'

Electronic Arts is the target of a class action lawsuit filed in Canada over the use of loot boxes in its games. The lawsuit, available in full from The Patch Notes, describes loot boxes as "a game of chance inside a videogame," which the defendants claim constitutes a form of unlawful gambling.

"Gaming is strictly controlled and licensed in this country. In breach of these laws, the defendants have operated an unlicensed, illegal gaming system through their loot boxes," the lawsuit states. "Through this suit, Canadian consumers seek to hold the defendants accountable for this unlawful conduct, and to recover their losses."

The suit has been filed on behalf of two plaintiffs, one in British Columbia and the other in Ontario, who have previously purchased loot boxes in EA's Madden NFL and NHL series. It covers a much wider variety of games released between 2008 and the certification of the suit, however, including:

• FIFA 09-21
• Madden NFL 10-21
• NHL 11-21
• NBA Live 14-19
• UFC 2 and 3
• Apex Legends
• Battlefield 4
• Battlefield Hardline
• Battlefield 1
• Dragon Age Inquisition
• Mass Effect 3
• Mass Effect Andromeda
• Need for Speed Payback
• Plants vs Zombies: Garden Warfare and Garden Warfare 2
• Plants vs Zombies 2: It's About Time
• Star Wars: The Old Republic
• Command & Conquer: Rivals
• Heroes of Dragon Age
• Star Wars: Galaxy of Heroes
• The Sims Mobile
• Warfriends

Interestingly, Star Wars Battlefront 2, the game that really helped kick off a mainstream backlash against loot boxes, is not in the list (perhaps because the system was reworked). There's a catchall phrase, too: "such other games developed and published by the defendants that may become known to the plaintiff."

"Loot boxes are considered part of the compulsion loop of game design to keep players invested in a game. Such compulsion loops are known to contribute towards videogame addiction and are frequently compared to gambling addiction," the lawsuit says. "This is in part due to the use of a 'variable-rate reinforcement schedule' similar to how slot machines dole out prizes and it is especially dangerous for children. The random element also makes players more likely to pay for the chance to 'win' an item from a loot box."

The suit says loot boxes in EA's games "all function in a substantially similar fashion," noting that they're either purchased with real money or an intermediate virtual currency. Some loot box items provide in-game advantages, making them particularly desirable to players, but the suit implies that even items that don't affect gameplay have an insidious attraction.

"[Apex Legends] cosmetic items are associated with player prestige, and in particular rare cosmetic items will provide a player with more prestige than common ones," it states. "Players who use the default avatars are looked down on by other players. There is therefore an incentive for players to purchase multiple loot boxes in order to obtain more valuable and more prestigious rare cosmetic items."

The suit makes allegations of unfair practices, unjust enrichment, and breaches of competition and consumer protection regulations, but it primarily hinges on the question of whether loot boxes constitute a form of gambling. It defends that position by pointing out that countries around the world, including Japan, Korea, Belgium, the Netherlands, the UK, and the US, have all either taken action against the use of loot boxes or made moves toward doing so, but it's still an unanswered question in most jurisdictions. Because of that, the case has the potential to have a major impact as a precedent setter in Canada, which could lead the Canadian government to take action to regulate loot boxes or penalize EA directly. Or, the result could be the determination that loot boxes aren't gambling.

The lawsuit seeks "restitution of the benefits received by the defendants in the full amount of the takings," which seems optimistic, or "in the alternative, disgorgement of the benefits received by the defendants on account of the wrongdoing," as well as other damages and compensation, and various injunctions against the use of loot boxes in games. Before all that, however, the suit must be certified as a class action—there's no timeframe on that, but we'll keep our eyes open. I've reached out to Electronic Arts for comment, and will update if I receive a reply.