On
A "loot box" is defined in the Claim as a consumable virtual item that can be redeemed to receive a randomized selection of further virtual items. In the modern videogame industry, the items granted by loot boxes range from simple cosmetic options for a player's in-game avatar, to game-changing items that alter how the game is played (potentially giving players an edge in competition with other players).2 The Claim states that the random chance aspects of loot boxes are central to their appeal to developers and publishers, and that loot boxes are considered part of the "compulsion loop" of game design, used to keep players invested in games.3 The Claim asserts that loot boxes function similar to slot machines doling out prizes, and that the items in loot boxes have intrinsic value as they can often be purchased directly with real money, or sold/traded in-game.
The Claim states that loot boxes are a form of unlawful gambling under the Criminal Code of
The legal basis for the Claim is the Defendants' unjust enrichment from profits obtained by selling Loot Boxes, which constitutes an alleged scheme for advancing games of chance, betting, or similar behaviours, or a lottery scheme contrary to the Criminal Code.5 Additionally, the Claim states that the Defendants breached the provincial Gaming Control Act, because offering loot boxes to the public constitutes "gaming services" and the Defendants are therefore unlicensed "gaming services providers."6 Some older Canadian laws refer to gambling as "gaming", with the obvious possibility of confusion when discussing the video game industry. The Claim also alleges that the Defendants have breached the BC Business Practices and Consumer Protection Act ("BCPA")7 and the
-
concealing the odds of loot boxes in affected titles;
- failing to have safeguards in place to prevent minors from consuming loot boxes; and
- making high-value items that affect gameplay available exclusively from loot boxes, thereby forcing players to obtain loot boxes.
The Claim asserts that the Defendants breached the BCPA and OCPA by taking advantage of consumers' inability to understand the nature of loot boxes, or alternatively the terms and conditions within the Defendants' video games were too adverse to consumers to be equitable. The Claim also states that the Defendants breached the Competition Act, by offering loot boxes for sale, advertising an internet gaming site, failing to disclose loot box odds, failing to promote responsible gaming and failing to protect minors as required by advertising regulations.9 Finally, the Claim identifies that the Defendants collected money from players who are under the age of legal majority ("infants") and therefore are entitled to compensation under the Infants Act.10
The Claimants have thrown a wide variety of legal claims at the Defendants in the apparent hope that the BC
Loot Boxes in Other Jurisdictions
Loot boxes are utilized by numerous developers and publishers, and are prevalent in many of the most popular video games in the world. However, most jurisdictions have not imposed regulations on loot boxes, or issued binding determinations of their legality within existing regulatory frameworks for gambling and consumer protection.
In
Most European countries have yet to take a stance on loot boxes, with a few notable exceptions. In
While the discussion on loot box legality appears to be heating up, in some jurisdictions the focus lately has been on informing consumers about loot boxes, rather than banning them outright. For example in
The Future of Loot Boxes in
Traditional legal frameworks have trouble accommodating loot boxes. The Claim against the Defendants
Both developers and publishers should pay close attention to this lawsuit. Depending on the Claimants' success, this Claim is a potential springboard for similar loot box-related lawsuits both in
Footnotes
1.Notice of Civil Claim shared by The Patch Notes, ("Claim") Online: https://thepatchnotes.com/wp-content/uploads/2020/10/Notice-of-Civil-Claim.pdf
2. Claim, footnote 1 at para 20
3. Claim, footnote 1 at para 24
4. Criminal Code, RSC 1985, c C-46, Online: http://canlii.ca/t/54cpx
5. Criminal Code, footnote 4, s 206, s 207 Online: http://canlii.ca/t/7vf2#sec201
6. Gaming Control Act, SBC 2002, c 14, s 95, Online: http://canlii.ca/t/84kz#sec95
7. Business Practices and Consumer Protection Act, SBC 2004, c 2
8. Consumer Protection Act, 2002, SO 2002, c 30, Sch A
9. Competition Act, RSC 1985, c C-34, Online: http://canlii.ca/t/54cq0
10. Infants Act, RSBC 1996, c 223, Online: http://canlii.ca/t/53j4l
11. S-1629 - 116th
12.
Online: https://www.pcgamer.com/the-legal-status-of-loot-boxes-around-the-world-and-whats-next/
13.
14. (1)
Online: https://www.pcgamer.com/netherlands-gaming-authority-cracks-down-on-loot-boxes-in-some-games/
(1)
15. Hafer, Footnote 14 at para 9
16. Kansspelautoriteit, "Imposition of an order subject to a penalty on
17.
18. Hafer, Footnote 14 at para 6
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr
Fasken
BC V6C 0A3
Tel: 4163668381
Fax: 4163647813
E-mail: sdookhoo@fasken.com
URL: www.fasken.com
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