California Class Action Says In-Game Loot Boxes in ‘Rise of Kingdoms’ Equate to Illegal Gambling

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Mobile game developer Lilith Games faces a proposed class action lawsuit that alleges the “Rise of Kingdoms” maker’s solicitation of in-game purchases is no more than a predatory scheme by which the company “exploits players” using “deceptive and misleading representations.”

Filed in California against Lilith Games (Shanghai) Co., Ltd. and Shanghai Lilith Network Technology Co., Ltd., the lawsuit explains that while the company’s mobile real-time strategy game “Rise of Kingdoms” is free to download and play, players are solicited to make in-game purchases in order to acquire “loot boxes” containing a random collection of items. According to the complaint, the contents of loot boxes are unknown to players, who have to “open” the box or “spin” a wheel before receiving either a common item or, in very few cases, a rare and valuable in-game item. 

“Much like a slot machine or a lottery, loot boxes require no player skill, have randomly determined outcomes, and in this instance, undisclosed, abysmal odds,” the complaint says.

Though the loot box-based gaming model is lucrative for developers such as Lilith Games, players effectively receive the short end of the stick in that, according to the lawsuit, the probability of receiving the in-game item solicited by the defendant is deceptively low. At its core, the case alleges, the micro-transaction-based business model employed by Lilith Games in “Rise of Kingdoms” ultimately results in “a form of unlawful, unregistered, and unmonitored gambling” illegal under California law. 

Players, many of whom are minors, are given no information with regard to the odds of winning any given prize that may be in a loot box, the case states. Arguing that the defendants’ loot boxes are essentially games of chance, the lawsuit alleges Lilith goes even further in its deception of “Rise of Kingdoms” players by manipulating or fixing the outcomes to maximize profits.                                                                                

Further still, the suit says Lilith Games intentionally takes no “legitimate measure” to combat in-game cheating—and is therefore complicit in such—because the company is aware that some behavior prohibited by the developer’s terms of service, such as account sharing, results in additional revenue. With shared accounts, the suit explains, “Rise of Kingdoms” players who pool their money together are “capable of creating extraordinarily powerful” accounts that allow the individuals to effectively steal in-game resources from others “with relative ease.” 

Rather than sanction players caught cheating in “Rise of Kingdoms” and reimbursing non-cheating players, Lilith Games, the plaintiff charges, attempts to capitalize on unscrupulous in-game conduct by “marketing in-game items to the non-cheating player” in an attempt to restore their previous position in the game.

The plaintiff estimates that he has spent more than $8,000 purchasing bundles and gems in “Rise of Kingdoms,” and sustained financial harm after being attacked by a shared account. The case alleges more broadly that Lilith Games’ loot box-driven model “results in the perfect predatory scheme” wherein true long-term costs are hidden from players.