Brazilian children’s association moves to ban loot boxes

Brazil’s Association of Centres for the Defence of Children’s and Adolescents’ Rights (ANCED) has filed seven lawsuits against major video game creators, in an effort to implement a ban on loot boxes.

These actions will come against companies including the Brazilian subsidiaries of Activision Blizzard, EA Games, Nintendo, Riot Games, Ubisoft and Valve Corporation, for the inclusion of loot box mechanisms in their video games which are aimed towards children. 

The lawsuits have been filed with the District Court for Children and Youth in the Distrito Federal, home to Brazil’s central government, and will also extend to companies that host the games on their platforms. This includes Apple, Microsoft, Google, and Sony.

Along with a ban on loot box mechanisms, the seven lawsuits seek BRL19.5bn (£2.45bn) in indemnities for “collective and individual moral damages.”

ANCED has argued that these loot box mechanisms constitute a gambling product according to Brazilian law, comparing the companies and their products to roulette games and casino products.

The lawsuits criticised the use of audiovisual accompaniments alongside loot boxes, such as glowing on-screen animations and sound effects, which gives the impression of reward. The ANCED argues children and adolescents are particularly susceptible to this type of feature. 

Brazil’s actions follow those of Belgium and the Netherlands, where loot box mechanisms have already been banned. Belgium’s Gambling Commission ruled in 2018 that loot boxes were in violation of its gambling legislation, and EA was ordered to remove loot boxes from FIFA in the Netherlands in October of last year. EA is facing a similar lawsuit in the state of California.

In Belgium, when loot boxes were banned, Nintendo was forced to pull two of its popular mobile games from the market. Animal Crossing: Pocket Camp and Fire Emblem Heroes were removed from the Belgium market over concerns regarding the new laws defining loot boxes as gambling, and there are predictions that similar events could transpire in Brazil if the lawsuits pass. 

Dr David Zendle, in an interview with OnlineBingo in November, said "There is the potential for regulation to come in very quickly here because we can clearly see that there is the potential for harm. Regulators are in a tricky place due to the lack of an evidence base, so they have to work with what information they do have," though we may have to wait for the 2005 Gambling Act Review to conclude before anything more definitive comes into place.