Daily Archives: June 16, 2020

New Class Action Lawsuits filed against Apple and Google Allege Gambling-esque loot box mechanics in Apps they sell violate California Gambling Law

Casino Watch Focus has reported on the ongoing saga of gambling-eque loot boxes that have been for sale in video games.  These game mechanics are said to prey upon people’s addictive personalities the same way a common slot machine would and they have come under intense scrutiny across the world.  Some legislation has been enacted to force regulation on these gambling like micro transactions, and California is one such jurisdiction.  A class action lawsuit has been filed alleging that companies like Apple and Google, through their game app stores, are violating the law and fostering predatory behavior.  An online tech source explains:

A new $5 Million Class Action was filed against Apple on Friday in the U.S. District Court in San Jose in a very important case relating to the promotion of video games that have in-app purchase mechanisms that are primarily aimed at children and addicted gamblers. Apple’s iPhone and iPad are considered illegal “slot machines or devices” in California. In-app purchases in this case are deemed to be “Loot Boxes” or “Loot Crates.”

The issue is quickly becoming an issue in Europe with both Belgium and the U.K. now demanding that the government modernize its gambling laws to include “Loot Boxes” especially targeting children. While Apple legally tried to protect themselves by creating mild restrictions on its developers, the bottom line is that they allow this practice considered gambling, and more importantly, profit handsomely from “Loot Box” purchases, according to the pending Class Action. This type of Class Action is long overdue in the U.S. and will be an important one for the gaming industry as a whole.

A similar class action was also filed against Google alleging the same illegal behavior.  An online legal source breaks down some of the specific tactics that are used to hook young children who play these games:

The complaint accused Google of allowing children to gamble through games available in the Google Play store, allegedly in violation of California legislation. The plaintiffs equated Google’s tactics to “Big Tobacco’s ‘Joe Camel’ advertising campaign.” They claimed that “Google relies on creating addictive behaviors in kids to generate huge profits for the Company.”

For example, plaintiff S.M has been “induced to spend his parents’ money to purchase ‘Loot Boxes’ in-game” while playing a game on a smartphone.  Mei-Ling Montanez “estimates S.M. has spent more than $100 on in-game purchases including Loot Boxes. The money spent on Loot Boxes was done in exchange for the random-chance possibility of winning valuable items in-game.” S.M. was able to purchase these items with his parents’ credit card that was on file with the Google Play App store. 

Moreover, no parental consent is required to purchase these items. Montanez claimed that her son fell victim to this “scheme,” which is allegedly “designed to hook children into spending money on the game.” Furthermore, while these games are “free,” they may be free to download, but not fully free to play because of these induced allegedly purchases.

According to the complaint, various games, including Mario Kart Tour, FIFA Soccer, Roblox, Brawl Stars, Final Fantasy Brave Exvius, and others use loot boxes. The Loot Boxes rely on a “variable rate enforcement” reward structure, which “results in people quickly acquiring behaviors and repeating these behaviors frequently in hopes of receiving a reward.” For example, “purchasing and opening a Loot Box – by design – is visually, physically, and aurally stimulating. Opening a Loot Box gives the player a rush; the moment of anticipation followed by release. 

The Loot Box mechanism has been proven to be effective on adults, and its effects are only intensified when used on minors who are more prone to engage in risk-taking behaviors, more prone to gambling addiction, and “are less equipped to critically appraise the value proposition of these schemes.”

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