Valve has become the subject of a new lawsuit, this time by New York Attorney General Letitia James. In a press release announcing the lawsuit, James has alleged that Valve is partaking in illegal promotion of gambling through the lootboxes available in its games—Counter-Strike 2, Team Fortress 2, and Dota 2—since they offer players a chance to get rewards that also happen to have monetary value thanks to the Steam Marketplace.
“In Valve’s most popular game, 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, through this promotion, Valve has earned “billions of dollars” by luring players to engage with gambling in the hopes of winning these items.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” said James. “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.”
Aside from the monetary value of the items, the crux of the lawsuit seems to revolve around Valve’s use of loot boxes, which the press release compares with slot machines due to the random nature of the rewards. The nature of the loot boxes also results in some items being rarer than others, which in turn has the added effect of making them more valuable in the market.
The fact that third-party markets also exist, making it easier to liquidate money that would have otherwise remained in the Steam ecosystem, is also a major cause for concern. “Users can also connect their Valve accounts to third-party marketplaces where the virtual items can then be sold directly for cash. The [Office of the Attorney General]’s investigation found that Valve facilitates and even assists these third-party marketplaces in their operations.”
“The high value of Counter-Strike’s rare skins and the ease of liquidating items through third-party marketplaces have made Valve’s virtual items an attractive target for thieves. Valve has received hundreds of thousands of support requests from users reporting that their Steam accounts had been hacked, or that they had been tricked into transferring items to a bad actor.”
There is also a focus on how Valve’s loot boxes adversely affect children. James has noted that they can entice younger players into gambling their limited funds because the loot boxes have the potential to offer lucrative rewards.
While the press release hasn’t confirmed what kinds of damages or penalties James is seeking from Valve through this lawsuit, it has noted that she wants to “permanently stop Valve from promoting gambling features in its games,” while also divesting itself of its “ill-got gains”, and pay fines for the violation of New York’s laws.
