Spain’s Loot Box Debate Draws Attention from Dapper Labs and its La Liga-Tied NFT Operations

Posted on: December 28, 2022, 12:08h. 

Last updated on: December 28, 2022, 02:32h.

Spain is considering adopting legislation to limit the presence of loot boxes in video games. This has spooked Dapper Labs, which is concerned that tighter controls could impact its NFT (non-fungible token) business, including a deal with Spain’s La Liga.

Dapper Labs LaLiga NFTs
Several of Dapper Labs’ La Liga NFTs in a digital frame. As Spain looks to potentially classify loot boxes as gambling, Dapper Labs hopes it can prevent its NFTs from facing the same restrictions. (Image: The Crypto Times)

Loot boxes are items that certain video games offer that have randomized content – players don’t know what they’re getting beforehand. Gamers can either purchase them with cash or accumulate points in the game to acquire them.

US-based Dapper Labs is banking on the future of NFTs, the digital collectibles that some view 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-digit sums.

Depending on how the Ministry of Consumer Affairs (MCA) writes the final language of its loot boxes update, Dapper Labs could face limits to its operations. As a relatively new product still trying to find success, limited marketing capabilities can damage the company’s ability to expand and establish roots.

The company met with representatives of the Ministry of Consumer Affairs (MCA) during a public consultation promoted by the ministry, according to Spanish media outlet El País. The goal was to provide input on loot boxes and NFTs as the MCA considers its loot box stance.

Digital Divide

Digital trading cards in loot boxes, like those in FIFA 23, can be the next step for sports-related trading cards. If a Mickey Mantle physical card can sell for more than $12 million, then digital cards can eventually reach that mark.

Dapper Labs has agreements with the NBA, NFL, and La Liga to develop digital sports cards and other digital sports-related offerings. These, it believes, are the indisputable future of sports memorabilia trading.

In 2019, the company joined forces with the NBA to introduce the NBA “Top Shot Moments,” certified and unique videos that have become its flagship offering. In less than two years, Moments has seen more than 28 million global transactions worth around $1.2 billion.

The MCA – specifically 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’s a push to either ban loot boxes entirely or control access to them. For this reason, and without forgetting that a large part of video game users are minors, regulation is coming.

It’s likely that Spain’s approach to loot boxes will be one of control, not prohibition. It will reportedly target video game entities and allow some access. But game operators won’t be allowed to market or promote them.

In addition, the MCA will likely apply similar restrictions to loot boxes that it does to betting. In other words, there will be a ban on face-to-face advertising, as well as limitations on sports sponsorships.

Uncertain Future

One of the concerns Dapper wants to address is the language under consideration. The MCA is drafting a bill that could limit “random reward mechanisms” in a virtual setting, which might inadvertently draw in NFTs.

In Spain, Dapper is trying to expand its La Liga Great Goals pack, Kings of the World. The pack includes three “Moments” out of 36 possibilities, 10 “common,” and 26 “rare.”

Two of the three “Moments” in the pack will be common, while the third could go either way. There’s an overwhelming chance that a common “Moment” will be included. There’s also an outside chance – 1%, according to Dapper – that it could be a rare one. The consumer won’t know before making the purchase.

Therefore, Dapper is concerned the MCA may consider its “Moments” packs to be a type of gambling, the same as it may with loot boxes. The company asserts that, because it’s only offering a collectible item without assigning any value to it, it doesn’t deserve to be included. In the end, Garzón will have to make that call.