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New York Attorney General Sues Valve, Alleging Its Loot Boxes Illegally Promote Gambling
The attorney general of New York Letitia James is suing Valve, alleging the platform illegally promotes gambling to children.
This comes from a press release issued by the attorney general's office today, which states that following an investigation, the office of the attorney general "found that Valve’s video games, including Counter-Strike 2, Team Fortress 2, and Dota 2, enable gambling by enticing users to pay for the chance to win a rare virtual item of significant monetary value."
"In Valve’s most popular game [Counter-Strike 2], the process resembles a slot machine, with an animated spinning wheel that eventually rests on a selected item. The randomly selected virtual items have no in-game functionality but can be sold online for money, with one item reportedly being sold for more than $1 million. The lawsuit alleges that Valve has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling in the hopes of winning expensive virtual items that they can cash in on. With this lawsuit, Attorney General James seeks to permanently stop Valve from continuing to promote illegal gambling in its games and to pay disgorgement and fines."
The lawsuit itself describes both the mechanics of how loot boxes work in all three games, as well as the ways in which users can "cash in" virtual items, either by selling them on the Steam Community Market, or by connecting their accounts to third-party marketplaces, the latter of which the attorney general's office says it found Valve "facilitates and even assists." The attorney general's office argues that Valve's loot box model is "quintessential gambling, prohibited under New York's Constitution and Penal Law." Gambling is illegal in New York with only some exceptions, which the attorney general says are all irrelevant here.
The question of whether loot boxes can or should be regulated as gambling has been ongoing for more than a decade, with different countries issuing various regulations around them over the years. China, South Korea, and some other countries require companies to disclose odds on receiving certain items in very specific ways. In Australia, the presence of loot boxes automatically nets a game an M rating (not recommended for children under 15, albeit not legally restricted), and anything with simulated gambling gets an R18+ rating, meaning it cannot be sold to minors. Belgium has attempted to ban them entirely, though it is apparently struggling to enforce this.
The New York lawsuit aims to permanently stop Valve from promoting gambling features in its games, make full restitution to consumers and give up all profit its made from this practice, and pay fines for violation of New York laws. If successful, this case could have significant ripple effects on the rest of the industry, as companies are forced to confirm to an increasing array of different loot box laws in different regions.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” said Attorney General James in a statement. “Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes. These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers.”
IGN has reached out to Valve for comment.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to rvalentine@ign.com.
