Spin it to win it New York sues Valve for enabling illegal gambling with loot boxes The ability to resell Steam items for real value is key to the states case.
34 Your gateway to gambling, according to a New york lawsuit. Credit: Valve Your gateway to gambling, according to a New york lawsuit. Credit: Valve Text settings Story text Size Small Standard Large Width * Standard Wide Links Standard Orange * Subscribers only Learn more Minimize to nav New York state has filed a lawsuit against Valve alleging that randomized loot boxes in games like Counter-Strike 2, Team Fortress 2, and Dota 2 amount to a form of unregulated gambling, letting users “pay for the chance to win a rare virtual item of significant monetary value.”
While many randomized video game loot boxes have drawn attention and regulation from various government bodies in recent years, the New York suit calls out Valve’s system specifically for “enabl[ing] users to sell the virtual items they have won, either through its own virtual marketplace, the Steam Community Market, or through third-party marketplaces.” The vast majority of Valve’s in-game loot boxes contain skins that can only be resold for a few cents, the suit notes, while the rarest skins can be worth thousands of dollars through marketplaces on and off of Steam. That fits the statutory definition of gambling as “charging an individual for a chance to win something of value based on luck alone,” according to the suit.
The Steam Wallet funds that users get through directly reselling skins “have the equivalent purchasing power on the Steam platform as cash,” the suit notes. But if a user wants to convert those Steam funds to real cash, they can do so relatively easily by purchasing a Steam Deck and reselling it to any interested party, as an investigator did while preparing the lawsuit.
The lawsuit also takes Valve to task for allowing third-party sites that facilitate the resale of in-game skins for cash. While the suit notes that Valve has “sporadically enforced” rules against so-called skin gambling sites—which use Steam inventories as virtual chips for gambling games—it alleges that Valve “has not acted against sites that permit the sale of Valve’s virtual items.” The suit cites “internal communications” from numerous Valve employees suggesting that the company was OK with such “cash-out services” for Steam items as long as off-platform gambling wasn’t explicitly involved.
In a press release announcing the suit, state Attorney General Letitia James said the gambling Valve’s system enables can “lead to serious addiction problems, especially for our young people. … These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers.”
Back in 2016, Valve faced a pair of civil lawsuits from parents concerned about Valve’s connection to skin gambling sites—those suits were eventually dismissed. Around the same time, Valve received a letter from Washington state threatening “civil or criminal action” if Valve didn’t crack down on skin gambling, but the state stopped short of filing a lawsuit in that matter.
In addition to asking Valve to modify or eliminate its loot box system, the New York suit asks for Valve to make “full restitution to consumers” for the disgorgement of “all monies” received from its gambling system, and for fines of “three times the amount of its gain.” Ars Technica has reached out to Valve for comment.
