Lootboxes Law in the Netherlands

Lootboxes are virtual items common in a wide variety of games which players can purchase with real or digital money. However, the players are oblivious to what will be seen inside the lootbox till they open it. These lootboxes or virtual treasure crates/chests typically contain a random selection of in-game items ranging from game money, unique player skins, characters or other high-quality items depending on the type of game. The idea behind lootboxes in virtual games is to improve the playing experience by enhancing a player's in-game abilities with items from the lootbox.

In the Netherlands, some games which contain lootboxes were termed illegal gambling and thus banned. Some of these games include Dota 2, Rocket League, PUBG, Destiny Child, Blue Archive, Diablo Immortal and Diablo Immortal to mention just a few. Conversely, the likes of Azur Lane, FGO, E7, Nikke, Arknights, Genshin and Honkai are not banned even though they contain lootboxes. The regulatory concern on the banned games stems from the fact that the Dutch government considers them to have a gambling undertone which might be addictive for people below the age of 18.

Dissecting the Dutch Lootbox Law

The concept of lootboxes has drawn lots of controversies with many questions being asked about the idea behind them. This law is regulated by the Netherlands Gambling Authority (Kansspelautoriteit, KSA). What it means is that they are outside the purview of KSA legislation and thus, it is not possible to check which players should be excluded from playing them and which should not. For casinos, non CRUKS casinos are still on KSA-s radar. Each new casino no CRUKS makes KSA's work harder since theres another non regulated casino they have to stop from advertising. KSA thinks lootboxes should be treated the same.

Be that as it may, it has been argued that games containing lootboxes operate similarly to gambling; a player takes a chance at purchasing a lootbox with the hopes of finding high-value items inside the loot chest. The game player does this knowing that there is an equal chance of not getting anything valuable in the lootbox which is equivalent to losing the money spent. This is not different from what happens in gambling. As a result of this, the KSA argued that buying these virtual treasure chests might encourage gambling behaviour, especially in young people below the age of 18.

Conversely, the argument for lootbox in the Netherlands tends towards legally distinguishing the real value of the rewards gotten from these treasure chests compared to that of gambling. While it is often easy to make use of the proceeds of gambling in the physical world as money, the same cannot be said of items in the lootbox. They are virtual and only have value within the game. Therefore, the inability to transform them into real-world money distinguishes lootboxes from gambling. From this point of view, an inference can be drawn that lootbox it is not definitive that lootboxes in games constitute gambling.

What is the Lootbox Law in the Netherlands?

In the Netherlands, a ban on lootboxes was proposed and debated but later dropped. The KSA had in the past attempted to regulate lootboxes being that they had a gambling undertone. Their investigation released in April 2018 and titled "Investigation into loot boxes - A loot or a burden" reported that lootboxes in some games were designed as illegal games of chance. According to the Dutch Betting and Gaming Act, any game programmed to enable a player to win a prize through chance rather than skill is classified as gambling. Thus, such a game will need an appropriate government license before it gets released to the public. But it has been a tad difficult classifying all games with lootboxes available in the Netherlands thus. As already mentioned, some games with lootbox features were banned while others weren't. Also, Poker is a game of skill, but it is classified as gambling.

Key legal provisions governing lootboxes in the Netherlands include:

• Licensing Requirements: Any game featuring elements of chance that offer a prize must obtain a gambling license.
• Protection of Minors: Games that could potentially expose minors to gambling are subject to stricter regulations.
• Transparency: Developers must disclose the odds of winning particular items in lootboxes to ensure transparency for players.

A few years after the April 2018 report was published, the Dutch Council of State ruled on March 9, 2022, that the evidence against lootboxes was not convincing enough to classify it as gambling. It thus overturned the earlier decision of the Netherlands Gambling Authority to regulate lootboxes. This effectively brought an end to a long legal squabble between KSA and game publishers with lootbox features one of which is EA.

The Dutch Lootbox Law: Future Prospects and Developments

Currently, games like Genshin and Honkai, Azur Lane, E7, Nikke, FGO, Arknights and some others which all contain lootboxes are not banned in the Netherlands. They are still accessible for play for all and sundry in the Netherlands regardless of age. Since the March 2022 ruling, nothing has changed even though some Dutch politicians are still pushing for a ban on lootboxes at the European Union level which will be implemented nationally at will. This move is being motivated by the progress the Belgian government has already made by banning lootboxes in games for children and adults. With the newly elected Netherlands government taking shape, the future of lootboxes remains uncertain. The KSA might at any time bring up new evidence against game publishers to upturn the initial ruling of the Dutch Council of State.