Child Gambling and the Sordid Story of FIFA Ultimate Team Packs

Loot boxes are random chance purchases inside a game. Gamers pay real money for a box whose contents can range from a pedestrian low-value in-game item to a rare and costly in-game treasure. FIFA, an annually released football simulation video game owned by EA Sports, sells loot boxes in the form of “Ultimate Team Packs” (hereinafter “UTPs”), a mechanic that allows gamers to buy packs of digital football players in the hopes of building the ultimate team. For perspective on the profitability of this microtransaction model, this past year, EA generated $1.49 billion (that’s billion with a “b”) through its Ultimate Team platform.¹ While EA’s interest in maintaining loot boxes is fiscally understandable, they have been facing increasing legal pressure to rid itself of a mechanic that many perceive as a predatory form of gambling aimed at children.

In August and September, EA was hit with two class action lawsuits claiming that FIFA loot boxes violated gambling laws.² Additionally, on October 15, 2020, a Netherlands District Court announced that it would be fining EA for its continued use of loot boxes in FIFA.³ According to the ruling, both the EA in the Netherlands and EA’s Swiss subsidiary will be fined €250,000—up to €5 million each—for every week that they do not remove purchasable UTPs from several generations of FIFA.⁴ EA Benelux released a statement expressing their intention to appeal the decision.⁵

The Loot Box Controversy

The issue behind these legal challenges is whether loot boxes fall under the rubric of monetized games of chance (gambling) or whether they only contain “surprise mechanics” and are more akin to children’s toys like Kinder Surprise Eggs or Hatchimals.⁶ On the surface, the similarity between traditional gambling and loot boxes is hard to deny. As Professors King and Delfabbro point out, “loot boxes resemble gambling slots because they require no player skill and have a randomly determined outcome (i.e. prize).”⁷ Furthermore, the psychological relationship between a gambler and the roulette table and a gamer and a loot box is indistinguishable. As Dr. Zendle explained, “‘both when you are playing on a roulette wheel or while you are opening a loot box, you’re wagering something that you have in our hand of value now on the uncertain hope of getting something of greater value later on.’”⁸ Aside from these formal similarities, FIFA UTPs bear many of the gambling industry’s hallmarks of unsavory practices intended to maximize profits, including:

• A dissociation between actual currency and the item bought: Rather than allow gamers to purchase UTPs for a set dollar amount, EA forces gamers through an arcane and unnecessary process, creating distance between the UTP and actual currency. In FIFA, to buy a UTP, gamers must first buy “points.” These points, in turn, must be used to redeem “coins.”⁹ Only at this stage can gamers buy UTPs for a set amount of coins.¹⁰ Like casinos insisting patrons use chips rather than cash, game developers deliberately create a disconnect between the loot box and the purchasing money for the simple reason that gamblers spend significantly more when betting with a currency analog rather than with real money.¹¹ Creating artificial and confusing degrees of separation between the money and the wager serves to short-circuit the brain’s ability to properly assess the cost or value of a particular bet, leading to overspending.¹²
• FIFA makes it deliberately frustrating for gamers to earn coins through gameplay: While gamers can accrue points by completing in-game challenges, as the game progresses, EA makes it tiresome for gamers to “grind” their way to new points.¹³ This engineered frustration creates “‘demand through inconvenience,’” making it seem reasonable for gamers to spend money to purchase their way to an entertaining experience.¹⁴
• Buying UTPs prompts a similar audio-visual experience to activating slot machines: Once the gamer purchases a UTP, music starts playing, lights start flashing, and a cinematic process unfolds, masking the sense of loss for losers, and heightening anticipation in a process starkly reminiscent of slot machines.¹⁵

EA Responds:

EA counters by noting that, unlike gambling, in-game prizes are valueless, and EA offers no platform for selling in-game items for cash.¹⁶ But this response is insufficient for four reasons:

1. Secondary “gray markets” exist, allowing gamers to swap passwords and accounts for money.¹⁷ Developers counter that they should not be responsible for this form of secondary-market trading given the fact that they expressly forbid gamer participation in these gray markets.¹⁸ This argument however, is difficult to sustain. Value does not disappear simply because a transaction is contractually delegitimized.¹⁹
2. FIFA itself has an in-game auction house to trade players for coins. Gamers can easily sell these coins on third-party websites.²⁰
3. Given the desirability of in-game rewards and coveted players, from an economic perspective, value exists even without a secondary market. Professors Drummond Sauer, Hall, Zendle, and Loudon analyzed the real-world value of randomized loot boxes using a number of different economic models and concluded that “virtual items have monetary value to gamers irrespective of whether they can be cashed out.”²¹
4. FIFA hosts high-stakes tournaments and the only realistic manner of being competitive is to have a highly ranked team of players, necessitating the purchase of UTPs.²²    

To distinguish itself from gambling, developers compare loot boxes to Pokémon cards, which encourage children to buy a randomized set of “in-game” items in exchange for real-world money.²³ But this comparison is strained; unlike loot boxes, a deck of cards is a real-world object of value.²⁴ It can be traded, stored, played with, collected, and represents a permanent physical acquisition. Conversely, the “loot” inside loot boxes are not “collectibles;” they are phantasmic, ephemeral digital creations. If a gamer gets banned, the game servers go down, or the developer abandons the game, all the “loot” disappears.²⁵ In fact, EA issues a new version of FIFA every year, requiring gamers to abandon much of their old lineup of players and old in-game acquisitions and build a brand new team upon each annual release.²⁶

Game developers further contend that loot boxes are like trading cards and not like roulette or slot machines because the gamer never loses; UTPs always produce something of value.²⁷ Like a deck of Pokémon cards and unlike a slot machine, even if a loot box does not contain a rare item, it will at least provide common items. But this comparison does little to whitewash loot boxes. True, gamers always receive something, but the value the gamers receive is typically minuscule compared to the amount paid.²⁸ Additionally, the distinction between “no payout” and “minimal payout” is a mere technicality that yields no substantive difference. Would you label a slot machine “not gambling” if every spin provided a minimum “1 cent win?”²⁹

Conclusion:

Regulators are cracking down on game developers. No matter how developers attempt to brand loot boxes, the reality is that loot boxes possess many of the same mechanics and foster the same addictive behavior—and produce the same devastation—as gambling devices.³⁰ This is especially troubling given that many of these games boast an ESRB rating of “E – for everyone” and are targeted specifically for children.³¹ In the 1920s, cigarette companies ran ads enticing children to buy cigarettes.³² When looking at these vintage ads it is hard not wonder “what were they thinking!?” I am convinced that one day in distant the future, they will look back at these games with equal horror. What were we thinking to allow developers to ensnare vulnerable children with colorful, saccharine games that masked predatory psychologically sophisticated and brutally addictive gambling mechanics?

Nosson Sternbach is a Second Year Law Student at the Benjamin N. Cardozo School of Law and a Staff Editor at the Cardozo Arts & Entertainment Law Journal. Nosson is interested in tax law. Nosson spends most of his free time actively avoiding his three adorable children. Connect with Nosson at https://www.linkedin.com/in/nosson-sternbach-b48641160.