Today, TechFreedom filed an amicus brief urging the U.S. Court of Appeals for the Ninth Circuit to affirm the lower court’s decision holding that loot boxes do not constitute illegal gambling devices under California anti-gambling laws.

Many modern videogames use so-called loot boxes—virtual boxes and chests that contain randomized rewards, such as weapons or keys—to facilitate in-game purchases. TechFreedom’s brief defends this innovative “freemium” approach to gaming.

“Loot boxes are an innovative pricing model, not nefarious gambling devices,” said Andy Jung, Associate Counsel at TechFreedom. “I grew up under the ‘buy to play’ model, paying $50 upfront to play games I hadn’t tested. These days, freemium games allow gamers to play free of charge, with the option of using microtransactions like loot boxes to enhance their experience.”

“The anti-gambling laws at issue here do not govern activities that are ‘predominantly games of skill,’” Jung continued. “Videogames, like all sports, require a mixture of skill and luck. Plaintiffs’ attempt to isolate one element of randomness in a game—loot boxes, in this case—is arbitrary and illusory.”

“Prohibiting loot boxes under gambling laws governing physical slot machines would require an extremely creative statutory reading that would, ultimately, discourage game developers from experimenting with innovative revenue models,” Jung concluded. “Plus, loot boxes are fun: people play videogames not only to test their skill, but also because anything might happen.”

The case is Mai v. Supercell, No. 23-15144 (9th Cir.).

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About TechFreedom: TechFreedom is a nonprofit, nonpartisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.

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