Welcome to the first DPG at Law Newsletter! Each month, this newsletter will highlight and analyze recent legal news that could impact your business and hobbies in digital entertainment and e-commerce in a concise and useful manner. This month’s newsletter covers developments in video games, esports, and e-commerce.

LOOT BOX LEGALITY

One of the major modern trends in video games has been the inclusion of “loot boxes,” or in-game items containing randomized assortments of rewards that players purchase with real or in-game currency. Although common throughout the industry, especially in free-to-play games, loot boxes have long been accused of amounting to legalized gambling in which the upside is virtual instead of monetary.

In September, a court in California considered this accusation with respect to the popular competitive games Clash Royale and Brawl Stars. In Mai v Supercell, the court held that loot boxes are not illegal gambling under California law, finding that these games are predominantly games of skill, the items obtained in loot boxes are not things of value, and the games themselves cannot be considered machines or devices of the kind contemplated in California anti-gambling law.

This is only the latest in a line of cases with similar outcomes, so video game developers should continue to feel safe in using loot boxes. That said, with the possibility of new legislation and court cases ever-present, always check with an attorney to make sure that your business models are up to date before relying on them.

NORTH CAROLINA INCENTIVIZES ESPORTS

In-person esports events have long been known to benefit the localities that host them by bringing attendees who spend money on hotels, restaurants, entertainment, transportation, and more. Since the start of the pandemic, such gatherings have been largely canceled or postponed. But as they gradually return or start anew, future esports events will surely once again stimulate local economies wherever they are held.

In a bid to get a larger share of such benefits, the government of North Carolina has created an Esports Industry Grant Fund that will provide up to five million dollars to encourage esports organizers to bring their events to the state. North Carolina is already home to headquarters or satellite offices of several major video game companies and has already played host to major events for Rainbow Six, PUBG, Halo, fighting games, and so on. With this new program, modeled on its similar incentives for in-state film productions, North Carolina hopes to expand its presence in the world of esports even more.

If you are considering where to hold your next esports event, reach out to experienced counsel to help you best take advantage of incentive structures like these.

FTC REQUIRES EASY CANCELLATIONS

The Federal Trade Commission is charged with protecting consumers from deceptive, unfair, and anti-competitive business practices. To that end, it has released a new policy statement fighting back against businesses that trick or trap customers into paid subscription services.

This new regulation comes down to three requirements: clear and conspicuous disclosure of all material terms of a product or service, express informed consent to being charged by consumers, and easy simple cancellation processes. The FTC has filed legal action against businesses that hid payment information, obscured their intention to charge consumers, made consumers wait on hold or listen to long ads before being allowed to cancel, and more.

If your business relies on sign-up and subscription processes, consult legal counsel to make sure that you understand and abide by these new requirements.

EXPERIENCED EXPERT COUNSEL

I have over a decade of experience practicing law in digital entertainment and e-commerce, including in video games, esports, streaming, web hosting, business development, intellectual property, and more. If you have any questions about the stories highlighted here, including how they may impact you, please reach out to me directly at david@dpgatlaw.com. If you or anyone else you know would like to receive this newsletter directly by email, please click this automatic sign-up link.

This article is released under a Creative Commons Attribution CC BY License, meaning it can be shared, redistributed, or modified by anyone for any reason as long as any such use includes attribution to David Philip Graham of DPG at Law as well as links to the original article here and to dpgatlaw.com.