California Rules For Apple In Class-Action Loot Box Gambling Complaint, Finds Them Legal Under State Law

Ryan Pearson |

Jan 10, 2022

Apple have won a class-action complaint, absolving them of perpetrating a “predatory monetization scheme” by selling video games with loot boxes.

MediaPost reports that last year, a woman named Rebecca Taylor filed a class-action complaint against the tech giant on behalf of her son after he allegedly downloaded the free-to-play title Brawl Stars, then spent $25 on in-game loot boxes.

Drawing comparisons between loot boxes and slot machines, Taylor described the mechanic as providing “randomized chances within the game to obtain important or better weapons, costumes or player appearance (called ‘skins’), or some other in-game item or feature that is designed to enhance game-play.”

She also claimed that loot boxes were gambling, alleging “buying a loot box is a gamble, because the player does not know what the loot box actually contains until it is opened.”

Taylor claimed that Apple’s sale of games containing loot boxes violated California’s unfair business practices law, while Apple countered that the case should be dismissed.

In their motion to dismiss, the company put forth that Brawl Star’s virtual currency “is for gameplay only and can never be refunded or exchanged for real money within the game or through Apple,” further stating that since “the virtual items acquired in the game cannot be used or sold outside of the game,” no one involved in the lawsuit had suffered any “economic injury”.

Taylor’s lawyers in turn stated that since Apple was getting a share of revenue from the sales of loot boxes, they would still be involved in a “predatory monetization scheme that violates established public policies and constitutes immoral, unethical, or unscrupulous conduct.”

In support of her case, Taylor pointed to how gambling concerns over loot boxes have led other countries, such as Belgium, to ban their sale completely.

Nonetheless, on January 4th, U.S. Northern District of California Court Judge Richard Seeborg ruled that Taylor had failed to show how Apple had inflicted any injury upon gamers, economic or otherwise. The judge also reiterated that loot boxes were not illegal in California.

“Existing statutory law does not plainly prohibit ‘loot boxes,'” Judge Seeborg stated. “If plaintiffs’ allegations regarding the harmful affects of loot boxes are accurate, the public interest likely lies in seeking legislative remedies.”

However, should she choose to do so, any attempt by Taylor to appeal to lawmakers may come with its own issues.

During the Epic Games’ legal battle with the $3 trillion market cap Apple over the existence of third-party payment processors on the App Store, Epic Games hired lobbyists in certain US states to argue in their favor.

Thanks to their efforts, a judge finally ordered to allow apps with external payment options into their app store. Would Joe Public have the same chance appealing for legal change over loot boxes?

In 2016, Valve was sued for allowing third-party “skin gambling” websites utilizing Counter Strike: Global Offensive to act unopposed.

After the massive backlash against the loot boxes in EA’s Star Wars Battlefront II, multiple politicians and government bodies began to call for loot boxes to be classified as gambling.

Belgium’s ban on loot boxes saw multiple mobile games end their operations in the region, including Kingdom Hearts Union X [Cross], Dissidia Final Fantasy Opera Omina, Mobius Final Fantasy, Fire Emblem Heroes, and Animal Crossing Pocket Camp.

When speaking to a UK parliamentary body discussing loot boxes, EA representatives put forth the baffling defense that loot boxes were not gambling, but rather “surprise mechanics.” Epic Games representatives claimed they disagreed that they made money from people playing their games.

An academic paper from two doctors of UK Universities Plymouth and Wolverhampton concluded that 5% of those who buy loot boxes generate 50% of the revenue for their games. These kinds of players are sometimes dubbed ‘whales’ in the world of mobile game design. The paper also stated a third of those players could be classified as “problem gamblers.”

Should mandating loot boxes be the job of the government? Should there be a blanket ban, or be categorized as gambling and treated as such? Let us know on social media and in the comments below.

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