Electronic Arts is the subject of a class action lawsuit in Canada over the use of loot boxes in its games. The full text of the lawsuit can be found at The Patch Notes, but the defendants describe loot boxes as "games of chance within video games" and claim that they are a form of illegal gambling.

"Gambling is strictly controlled and sanctioned in this country. In violation of these laws, the defendants are operating an unauthorized and illegal gambling system through loot boxes," the lawsuit states. Through this lawsuit, Canadian consumers seek to hold the defendants responsible for this illegal conduct and to recover their losses."

The lawsuit was filed on behalf of two plaintiffs in British Columbia and Ontario, one of whom had purchased EA's Madden NFL and NHL series loot boxes. However, it covers a wider range of games released between 2008 and the time the suit was certified:

Interestingly, Star Wars Battlefront 2, the game that triggered the mainstream backlash against loot boxes, is not on the list (perhaps because the system has been reworked). There is also a catch: "Other games developed and published by the defendant that may be known to the plaintiff."

"Loot boxes are considered part of a forced loop in game design to keep players focused on the game. Such forced loops are known to contribute to video game addiction and are often compared to gambling addiction. This is partly due to the use of "variable rate enhancement schedules," similar to the way slot machines give away prizes, which is especially dangerous for children. The random element also increases the likelihood that players will pay for the chance to "win" items from the loot box."

The lawsuit notes that loot boxes in EA's games "all function in substantially similar ways" and are purchased with real money or intermediate virtual currency. While some loot boxes are particularly desirable to players because they give them an advantage in the game, the lawsuit suggests that items that do not affect gameplay also have an insidious appeal.

"Cosmetic items in [Apex Legends] are associated with player prestige, especially rare cosmetic items, which increase player prestige more than common ones. Players with default avatars are looked down upon by other players. Therefore, players have an incentive to purchase multiple loot boxes in order to obtain rare cosmetic items that are more valuable and more prestigious."

The lawsuit alleges unfair practices, unjust enrichment, and violations of competition and consumer protection regulations, but the main issue at stake is whether loot boxes constitute a form of gambling. Countries around the world, including Japan, South Korea, Belgium, the Netherlands, the United Kingdom, and the United States, have all taken or are taking steps against the use of loot boxes, but most jurisdictions have defended their positions, noting that the issue is still unresolved. As such, this case could have a significant impact as a precedent in Canada, where the Canadian government could take steps to regulate loot boxes or directly penalize the EA. Alternatively, it may be determined that the loot is not gambling.

The lawsuit seeks "full restitution of the profits received by the defendant" or, in the alternative, "forfeiture of the profits received by the defendant for fraud," as well as other damages, compensation, and various injunctions against the use of loot boxes in the game. But first, the case must be certified as a class action. We have reached out to Electronic Arts for comment and will update if we hear back.