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Child holding an iphone displaying the load screen for the game Brawl Stars

A California consumer and her son are claiming Apple is placing children in a dicey situation with some of the games sold through its App Store.

Plaintiff Rebecca Taylor says her minor son, C.T., has owned and played Brawl Stars since downloading the game last year onto both his iPad and iPhone.

She says that in the course of playing Brawl Stars and other games on his Apple devices, he has been encouraged to spend real money to purchase “loot boxes” in-game — using his parents’ credit card and iTunes gift cards. This, she claims, is tantamount to gambling.

Basically, loot boxes are randomized chances within a game to obtain important or better weapons, costumes, player “skins” or some other feature designed to enhance the player’s experience.

But buying a loot box is a gamble, Taylor argues, because the player doesn’t know what’s in it until the purchase is made. The best “loot” is the least likely to be obtained; most items in the loot boxes end up being “common” or undesirable.

Brawl Stars is just one of numerous “free” gaming apps available through Apple’s App Store, according to Taylor’s Apple class action lawsuit. Other popular games cited are Mario Kart Tour, FIFA Soccer and Roblox. All are free to download, but offer in-app purchases including loot boxes.

A large percentage of Apple’s revenue from App Store games comes from these in-game purchases, the lawsuit states. “Dozens (if not hundreds) of App Store games rely on some form of loot box or similar gambling mechanism to generate billions of dollars, much of it from kids.”

Psychological experts cited by the plaintiff concur that loot boxes are addictive to young players.

“Loot boxes have all the hallmarks of a Las Vegas-style slot machine, including the psychological aspects to encourage and create addiction — especially among adolescents,” Taylor maintains. “Moreover, under California law they constitute illegal ‘slot machines or devices’ when played on an iPhone, iPad or other similar device.”

To incentivize players to purchase more and more loot boxes in Brawl Stars, for example, the game employs an algorithm to slightly increase the odds of receiving a rare Legendary Brawler each time the player opens a Brawl Box. This entices players to purchase more boxes as their chances improve.

Psychologists call this principle “variable rate enforcement,” according to the lawsuit. Under this type of structure, people quickly learn behaviors and repeat them frequently in hopes of receiving a reward.

Adolescents are especially vulnerable to this type of manipulation, the Apple class action lawsuit reports, because they have low impulse control, are more inclined to take risks, are prone to addiction and often have a poor understanding of financial management.

Four children each play a game on their iphone

The lawsuit quotes Dan Trolaro, Assistant Executive Director of the Council on Compulsive Gambling of New Jersey: “The mechanics within a loot box look and feel like a gamble. Once minors are exposed to game of chance mechanisms, there is a significantly higher risk that they will have problems with it at a later stage in their lives. The literature indicates that exposure at an early age increases the risk of addiction and the severity of the addiction.”

The plaintiff notes that, while Apple does not develop these games, it does exercise full control over their sales through the App Store and takes a 30% cut of all in-app purchases.

Apple is also clearly aware of the gambling aspect of these games, she claims, as it requires its app developers to disclose the “odds of winning” particular items in their loot boxes prior to purchase.

A player wishing to obtain a loot box during game play is prompted to log in to his Apple account by entering the account password. At that point, Apple automatically charges the purchase amount to the credit card number on file with the App Store. Children can make these purchases without parental knowledge or consent, Taylor points out.

The Apple class action lawsuit is just the latest development in a long-running debate over loot boxes, in-game purchases and microtransactions, according to a recent Apple Insider story. The article cites a proposed 2019 Senate bill called the Protecting Children From Abusive Games Act, which sought to ban loot boxes but is not expected to gain traction.

In the past two years, Belgium, the Netherlands and Japan have banned loot boxes. Australia and other nations have conducted studies concluding they are “psychologically akin to gambling,” according to the lawsuit.

Within the United States, lawmakers in Hawaii, Minnesota and Washington have introduced legislation to ban the use of loot boxes in video games.

Taylor is claiming violations of California’s Unfair Competition Law and Consumers Legal Remedies Act, as well as unjust enrichment.

On behalf of the proposed national Class of plaintiffs, she is seeking an injunction against Apple’s allegedly illegal activities, “restitution and disgorgement of the revenues wrongfully retained as a result of Apple’s wrongful conduct,” court costs and other appropriate relief.

Has your child made in-app purchases in games on their Apple device without your knowledge? Tell us your story in the comments.

The plaintiff is represented by Andrew J. Brown of the Law Offices of Andrew J. Brown and by Timothy G. Blood and Thomas J. O’Reardon II of Blood Hurst & O’Reardon LLP.

The Apple Loot Box Class Action Lawsuit is Rebecca Taylor, et al. v. Apple Inc., Case No. 5:20-cv-03906, in the U.S. District Court for the Northern District of California.

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11 thoughts onApple Class Action Claims Loot Boxes Constitute Gambling

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