Valve Software sued by New York AG, accused of promoting illegal gambling through video game loot boxes – GeekWire
A new lawsuit filed by New York’s attorney general seeks to stop Valve Software’s use of a “loot box” mechanic in its popular PC games, accusing the Bellevue, Wash.-based company of making billions of dollars by luring children and teenagers into illegal gambling. Counter-Strike skins.
The lawsuit alleges that Valve’s first-party games are essentially an illegal gambling activity aimed at minor players. It wants to stop Valve from using loot box mechanics in its future games, and hit the company with a fine equal to “three times the amount of its profits from the illegal practices alleged here.”
Although best known for running the Steam digital games marketplace, Valve Software also owns and operates many of its popular PC games, including Counter-Strike 2, Dota 2, again Team Fortress 2.
All three games feature an optional mechanic where players can pay real money to get “loot boxes”: a physical item that drops a randomly generated piece of cosmetic gear that can be used within the game. Most of these things have no mechanical effect and are there for looks, like silly hats TF2 or “weapon skins” painted in neon CS2. This may not make sense youbut there are people in this world who will pay any price to get a decent looking gun, and these people are part of why Valve CEO Gabe Newell has a superyacht.
Despite their lack of real impact, loot boxes and commodity trading are both very profitable markets for Valve. The physical assets of these three games have been sold for incredible amounts of real money. Another estimate cited by the AG’s office shows that the market for Counter-Strike skins alone were worth more than $4.3 billion as of last year.
While Valve is fully benefiting from the chaotic material market CS2, TF2, again Dota 2 – sells these loot boxes in the first place, and hosts a secondary market for them through the in-app Steam Marketplace – the occasionally outrageous prices for these items are part of the player-created economy. The case may be misdirected.
In an official press release, New York Attorney General Letitia James wrote that “illegal gambling can be dangerous and lead to serious addiction problems… Valve has made billions of dollars by allowing children and adults alike to gamble illegally for valuable prizes. These practices are addictive, dangerous, and illegal, and my office is suing to stop and protect Valve’s drivers in New York.”
GeekWire has reached out to Valve for further comment.
The lawsuit against Valve marks the latest in a series of moves by James to crack down on gambling in New York state, such as shutting down 26 online casinos last year, and targeting Meta and TikTok as platforms that are said to pose “harm to young people’s mental health.”
