Video game giant Electronic Arts (EA) has decided not to appeal a recent fine it received in Austria because of its loot box-styled products. The gaming company emphasized its disagreement with the decision but decided not to contest the authorities’ judgment.

The fine was handed to EA after an Austrian court decided that the company’s FIFA Ultimate Team Packs are in breach of Austria’s gambling regulations. Similar to other similar digital products, the packs can be bought with real money and contain virtual assets that are usually generated at random.

Loot boxes are one of the hot topics of the video gaming industry. Because of their inherent similarities to gambling, many argue that they can serve as “gateway products” that incentivize young people to wager. Others claim that that the boxes themselves constitute gambling.

In any case, EA disagrees with the notion that its products constitute gambling. The company stands firm by its belief that its products are legal and in line with Australia’s regulations.

What EA Has to Say on the Matter?

An EA spokesperson expressed how the company feels about the current case. They underscored that EA believes the court “got both the facts and law wrong” in the case.

The spokesperson confirmed that EA does not intend to file an appeal since the decision will not have a profound effect on its business. However, the company still believes that it is in the right.

While we’ve decided not to appeal this narrow decision, which has no broader legal impact beyond this individual claim, we are confident that our games do not constitute gambling and that we are in full compliance with local laws.

EA spokesperson

The spokesperson added that EA is confident in the legality of its products and pointed out that regulators in multiple jurisdictions all over the world have previously ruled in favor of EA in similar cases. They noted that this includes another case in Australia that was decided by the very same Austrian Regional Court.

We design our games to bring choice, fairness, value and fun – we are committed to ensuring our Austrian players continue to have access to the same game and features as the millions of other players who enjoy them.

EA spokesperson

The video gaming sector remains divided on the topic of loot boxes. Regulators in multiple markets are equally inconclusive about how such products should be regulated. Still, the UK government recently released new guidelines for such products.

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Bundesministerium Finanzen, the financial police in Austria, released Tuesday data regarding operations against undeclared work, illegal businesses and tax evasion. The cumulative efforts of the police along with other related agencies resulted in a total of €6.5 million ($7 million) in fines and 2,185 criminal cases.

Within the gambling sector, for the first quarter, the financial police imposed €492,000 ($526,300) in fines. This was part of its efforts against illegal gambling. Overall, 46 companies were subject to searches and investigations for the first quarter of this year. This resulted in 27 criminal complaints against individuals involved in illicit gambling activities.

A record for the most criminal complaints related to illegal gambling was reported in Vienna, where 20 such complaints were recorded. The fines related to the illicit gambling activities in Vienna represented the lion’s share of the total, or some €300,000 ($320,800).

Magnus Brunner, the country’s Finance Minister, spoke about the recent figures and explained that illegal activities and evading taxes are harmful to legal businesses. He outlined that unlicensed or illegal businesses benefit from “unfair competitive conditions” which ultimately impacts “honest entrepreneurs” and companies. Finally, Brunner said: “Therefore, as part of our anti-fraud strategy, the financial police make a significant contribution to protecting our business location.”

Most Fines Relate to Salzburg and Vienna

A breakdown of the total fines against illegal activities, including gambling, per region, reveals that the highest number of fines, or €2.3 million ($2.5 million) relate to Salzburg. Next in line is Vienna with €1.4 million ($1.5 million) in fines, followed by Lower Austria with €1 million ($1.1 million) in fines.

Not unexpectedly, the highest number of criminal complaints were related to Vienna, a total of 567, followed by Lower Austria with 424 and Upper Austria with 352.

More than 13,200 employees within 7,200 companies were subject to the probe by the financial police for the first quarter of the year. Most of the businesses inspected were a part of the construction sector, a total of 1,792. Next in line was the hospitality industry with 1,062 inspected businesses followed by the transport sector with 973 inspections.

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