Diablo: Immortal – The regulatory devil is in the details
Updated: Aug 31, 2022
With the release of Diablo: Immortal (a free-to-play, multiplayer online action game developed by Blizzard Entertainment) a few months ago, one of the talking points concerned the game not being available for play in Belgium and the Netherlands. Articles reporting on this matter stated that in both Belgium and the Netherlands, the loot boxes (i.e. virtual chests including in-game items of different rarities) were seen as gambling and are therefore prohibited. However, this is a misrepresentation of the current – legal – status of loot boxes in both countries. More specifically, in neither Belgium nor in the Netherlands there is a ban of loot boxes laid down in law.
In Belgium, the loot box ‘ban’ is derived from a 2018 research report issued by Belgium’s Gambling Commission (BGC). In this report, the BGC investigated 10 video games in which loot boxes were present, such as Overwatch or FIFA Ultimate Team. The BGC then applied the definition of gambling under Article 2 of the Belgian Gambling Act to these loot boxes, with an interesting result. The definition of gambling in Belgium has four aspects: a game, a stake, a gain/loss and an element of chance. If these four aspects are present, the loot box is seen as gambling by the BGC and the videogame company will need to obtain a license before being allowed to exploit the loot box in Belgium.
Regarding the ‘stake’ condition, the BGC distinguishes between gameplay-currency and in-game currency. The former means virtual currency obtained through playing the game and not necessarily through purchase, the latter means virtual currency directly purchasable with money. Only in-game currency was deemed a ‘stake’ by the BGC and therefore loot boxes obtained with either in-game currency or directly with money (i.e. without the virtual currency as a middle-man) are seen as a ‘stake’. The distinction between both types of virtual currencies is not always clear, as many videogames use only one type of virtual currency which can be obtained both through gameplay and through purchase. Further, the BGC’s interpretation of the condition of a ‘gain or loss’ can be considered unique, as the determining factor is whether players attach a value to the item obtained through the loot box, and not necessarily the item’s monetary value. ‘Winning’ or ‘losing’ is interpreted broadly, meaning that if a player pays for a loot box, the value of the stake (the payment) can be higher than the value of the item received, causing the player to experience a loss. It is in this regard also stated by the BGC that items can obtain a value through the artificial creation of scarcity in the game, for example by offering items only for a limited amount of time or adding only a limited number of items to the game. The BGC clearly states that the inability to convert virtual currency to real money does not exclude the application of the Gambling Act. It is precisely this interpretation that differs from that of other countries such as the UK or – as we will see – the Netherlands. Finally, regardless of the validity of the argumentation used by the BGC, it needs to be stated that its interpretation is not legally binding as such. In other words, without a specific amendment to the Gambling Act or without a court stating that the interpretation by the BGC is the correct interpretation of the law, there is in theory no obligation for videogame companies to disable their game in Belgium due to the presence of loot boxes. This crucial piece of information is rarely mentioned when Belgium is used as an example of a country ‘banning’ loot boxes.
In the Netherlands, a similar situation is present. More specifically, according to a ruling in March 2022 by the Dutch Council of State, loot boxes in FIFA Ultimate Team could not be seen as games of chance under Dutch gambling regulation because they do not constitute a separate game and instead are only one aspect of the broader, skill-based FIFA Ultimate Team game mode. Again, regardless of the validity of this ruling, at present loot boxes cannot be seen as ‘banned’ in the Netherlands, because there is a court ruling stating that loot boxes related to gameplay are not gambling (this is a brief summary of a more complex line of argumentation given by the Council of State). As such, it is not clear why Blizzard would decide not to publish Diablo: Immortal in the Netherlands, as its loot boxes appear to be part of the broader game and are not a separate game in and of itself. Here, it is interesting to note the different interpretation of the concept ‘game’ in Belgium and the Netherlands. Namely, whereas the BGC decided rather quickly that loot boxes are a game (both at the level of the video game and at the level of the loot box itself), the Dutch Council of State decided the opposite and used the ‘separate game’ criterium as one of the determining factors in its decision that loot boxes are not gambling under Dutch regulation.
In conclusion, the precautionary approach taken by Blizzard regarding the release of Diablo: Immortal in Belgium and the Netherlands could be seen as a ‘better-safe-than-sorry’ approach, considering the current state-of-play in both countries regarding loot boxes. It can be argued that precaution in Belgium is well-founded, since the interpretation by the BGC can be confirmed as the correct one by a court in the future. In the Netherlands however, the highest administrative court has already ruled that loot boxes are not gambling if they are not a separate game, making the decision not to release the game in the Netherlands quite surprising. On a final note, it is important to state that other approaches vis-à-vis the regulation of loot boxes exist than those adopted in Belgium and the Netherlands. In that regard, within the Gam(e)(a)ble project there are different publications related to the legal classification of loot boxes as gambling, which are accessible through the project’s website.