Developers have eight weeks to change loot boxes in their games following a landmark decision by the Netherlands Gaming Authority.
A study of ten popular games featuring loot boxes found that four were in direct contravention of the Betting and Gaming Act.
The violation is defined by loot box mechanics that require no skill element whatsoever, and contain exchangeable items that hold market value outside the game.
If the developers don't take action to change these mechanics by June 20, they could be fined or even face the prohibition of their game within the region.
As the first country to take concrete action over the loot box question, the Dutch authority wants to work with other European countries tackle the issue head-on.
Although the Gaming Authority did not specify which games it tested -- or which were in direct violation -- Dutch language news site NOS reports the games as FIFA 18, Dota 2, PlayerUnknown's Battlegrounds, and Rocket League.
The report -- Study into loot boxes: A treasure or a burden? -- found that while the remaining six games did not directly contravene the Betting and Gaming Act, they "could nevertheless foster the development of addiction", and were "at odds were the objective of preventing addiction to organised games".
Using an evaluation tool to provide a quantifiable risk assessment, the Gaming Authority found that, on average, loot boxes have a "moderate to high addiction risk potential" and that socially vulnerable groups such as young people are being encouraged to participate.
Analysis of the studied loot boxes found elements of addictive design, noting that the mechanic is often presented in a similar way to gambling games such as slot machines and roulette.
"They are designed as gambling games are designed, with the feeling that you have almost won," Marja Appelman, director of the Gaming Authority told NOS.
"There are all sorts of sound effects and visual effects when you open such a loot box, so you have a tendency to play through and through."
Outside of Europe, Hawaii and Washington have proposed legislation against loot boxes though nothing has been enshrined into law yet. Meanwhile New Zealand has ruled that loot boxes aren't gambling, and an Australian authority found that loot boxes are gambling, but had limited options for enforcement.