Head of International Corporate Law and Fintech Practice
Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.
Case: Legal Opinion on loot boxes for court proceedings in Germany
Service: Legal Opinion
Client: international game development company (EU presence)
Jurisdiction: Germany
Subject: classification of loot boxes as gambling
The client approached us with a request to prepare a Legal Opinion for use in court proceedings in Germany.
The request was triggered by a user complaint alleging that the loot box mechanics in the client’s game constitute a form of gambling and violate German gambling laws.
What was at stake
- the business activity could be classified as gambling;
- the need to obtain a gambling licence;
- risk of fines and restrictions on operations in the German market;
- a potential domino effect across other EU jurisdictions.
In practice, this meant a real risk of losing access to the European market.
The challenge
The regulation of loot boxes in the EU remains one of the most uncertain areas. Different countries apply different approaches, and there is no unified practice. In Germany, such mechanics are assessed under the German Interstate Treaty on Gambling, while case law remains fragmented.
In such cases, the key mistake is attempting to explain the product instead of building a legal position.
What we did
We approached the matter not as a general consultation, but as the preparation of a legal position for court.
1. Broke down the model into legal criteria
We did not analyse the “game” itself, but its qualification based on the core gambling criteria:
- the existence of a stake;
- the element of chance;
- the possibility of obtaining a reward with economic value.
2. Analysed the client’s business model
We conducted a detailed assessment of the product mechanics and established:
- absence of any withdrawal mechanism;
- absence of a controlled secondary market;
- purely in-game nature of rewards;
- no guaranteed economic value for the user.
3. Built the legal position
We demonstrated that, within the client’s specific model, loot boxes do not meet the criteria of gambling, as they:
- do not involve a classic “stake”;
- do not generate assets with guaranteed economic value;
- do not allow for lawful monetisation of rewards;
- constitute digital content rather than a financial instrument.
4. Prepared a court-ready Legal Opinion
We prepared a structured Legal Opinion that included:
- analysis of German legislation;
- comparative analysis of EU practices;
- legal arguments against classification as gambling;
- risk assessment and practical recommendations.
This was not a formal memo, but a document designed to function as a defence tool in litigation.
Result
- the client obtained a clear legal position for use in German court proceedings;
- the risk of reclassification as gambling was significantly reduced;
- the business retained access to the EU market;
- the client’s model was further optimised to mitigate future regulatory risks.
What businesses should understand
Loot boxes are not merely a game design feature. In many cases, they are a matter of legal qualification of financial risk.
The key factor is not how the product looks, but how it is assessed by a regulator or a court.
Why most companies lose such cases
- failure to assess the core gambling criteria;
- reliance on general legal analysis instead of a litigation-ready position;
- lack of a jurisdiction-specific defence strategy.
How we work
At Prikhodko & Partners, we build jurisdiction-specific legal positions, analyse products from a regulator’s perspective, prepare Legal Opinions suitable for disputes, and help not just respond to claims, but protect the underlying business model.
If your product includes loot boxes, internal economies, or user-generated value, proper legal qualification is not a formality — it is a matter of preserving your business.
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