Spain’s Loot Box Debate Draws Attention From Dapper Labs And Its LaLiga Affiliate NFT Operations
Posted on: December 28, 2022, 12:08 p.m.
Last updated: 28 December 2022, at 12:08 p.m.
Spain is considering passing legislation to limit the presence of loot boxes in video games. This has alarmed Dapper Labs, which is concerned that tightened controls could also affect its NFT (non-fungible tokens) business, including a deal with Spain’s LaLiga.
US-based Dapper Labs is betting on the future of NFTs, the digital collectibles that some see as the next step forward in trading cards and valuable art. Some NFTs have already sold for hundreds of thousands of dollars, and a few have pulled down eight-figure sums.
The company met with representatives of the Ministry of Consumer Affairs (MCA) during a public hearing promoted by the ministry, according to Spanish media. El País. The aim was to provide input on loot boxes and NFTs as MCA reviews its loot box stance.
The digital divide
Digital trading cards in loot boxes, like those in FIFA 23, could be the next step for sports-related trading cards. If a physical Mickey Mantle card can sell for over $12 million, digital cards may eventually reach that mark.
Dapper Labs has agreements with the NBA, NFL and LaLiga to develop digital sports cards and other digital sports-related offerings. These, it believes, are the indisputable future of the sports memorabilia trade.
In 2019, the company teamed up with the NBA to introduce NBA Top Shot Moment, certified and unique videos that have become the flagship. In less than two years, Moments had seen over 28 million global transactions worth around $1.2 billion.
Loot boxes are items that some video games offer that have random content – players don’t know what they will get in advance. Players can either buy them with money or collect in-game points to obtain them.
The MCA – in particular Minister of Consumer Affairs Alberto Garzón – argues that these products share characteristics with gambling. This has been a topic of debate in Spain, as well as in other countries around the world.
As a result, there is a push to either ban loot boxes altogether or control access to them. For this reason, and without forgetting that a large proportion of video game users are minors, regulation will be promoted.
It is likely that Spain’s approach to loot boxes will be one of control, not prohibition. It will reportedly target video game devices and provide some access, but game operators will not be allowed to market or promote them.
In addition, the MCA is likely to apply similar restrictions to loot boxes as it does to tipping. In other words, there will be a ban on face-to-face advertising, as well as restrictions on sports sponsorship.
Uncertain future
Depending on how the MCA writes the final language for the patch, Dapper Labs may face operational limits. As a relatively new product still trying to find success, limited marketing opportunities can hurt the company’s ability to expand and establish roots.
One of the concerns Dapper wants to address is the language being considered. The MCA is drafting a bill that could limit “random reward mechanisms” in a virtual setting, which could inadvertently attract NFTs.
In Spain, Dapper is trying to expand its LaLiga Great goals package, Kings of the world. The package contains three Moment out of 36 possibilities, 10 “common” and 26 “rare”.
Two of the three Moment in the pack will be common, while the third can go either way. There is an overwhelming chance that a shared moment will be included. There’s also an outside chance — 1%, according to Dapper — that it could be a rare one. The consumer will not know until the purchase.
Therefore, Dapper is concerned that the MCA may consider it Moment packs to be a type of gambling, the same as it can with loot boxes. However, the company claims that because it only offers a collectible without assigning any value to it, it does not deserve to be included. Ultimately, Garzón has to make that call.
