Firm Client Supercell Secures Dismissal With Prejudice of Claims That “Loot Boxes” Are Illegal Gambling

On January 3, 2023, Judge Edward J. Davila of the Northern District of California dismissed the putative class action, ruling that alleged “loot box” features in Supercell’s Brawl Stars and Clash Royale games are not illegal gambling under California law.  First, the court held that plaintiffs lacked standing for their claims for two reasons: (1) plaintiffs got exactly what they paid for when purchasing loot boxes and therefore did not suffer any economic injury giving rise to a claim under California’s Unfair Competition Law (“UCL”); and (2) Supercell’s virtual currency is not a good or service for a claim under California’s Consumer Legal Remedies Act (“CLRA”).  Second, the court held that, even if plaintiffs had standing, they failed to state a claim because Supercell’s Brawl Boxes and Royal Chests are not slot machines or controlled games and therefore not illegal gambling under California law.

This dismissal follows an earlier September 2021 decision dismissing plaintiffs’ claims with leave to amend, but plaintiffs’ amendment proved futile.  The decision also accords with dismissals by other courts of UCL and CLRA claims premised on in-app purchases of alleged loot boxes.  See, e.g., Coffee v. Google LLC, No. 20-cv-03901 (N.D. Cal. Jan. 10, 2022); Taylor v. Apple, Inc., No. 20-cv-03906-RS, (N.D. Cal. Jan. 4, 2022).

Here's a link to the court’s order granting Supercell’s motion to dismiss and dismissing the plaintiffs’ putative class action with prejudice.

Coverage of the decision by Law360 is available (behind a paywall) here: Game Over For 'Loot Box' Gambling Suit Against Supercell