New York’s attorney general Letitia James is suing Steam owner Valve, alleging it promotes illegal gambling in its biggest video games, including Counter-Strike 2, Team Fortress 2, and Dota 2.
The newly-announced lawsuit alleges loot boxes included in these games are against state law, as they ‘enable gambling by enticing users to pay for the chance to win a rare virtual item of significant monetary value’ and ‘the process resembles a slot machine, with an animated spinning wheel that eventually rests on a selected item’.
Gambling is heavily regulated in New York, and is generally prohibited, with few exceptions.
Valve sued for alleged illegal gambling – quick links
What’s in the New York attorney general’s lawsuit against Valve?
According to the attorney general’s lawsuit filing, Valve is accused of illegal gambling, and particularly targeting younger players who may be influenced to spend their money on loot boxes for randomly-selected virtual items.
It has outlined an investigation into various games made by Valve, many of which contain loot box mechanics, which can resemble slot machines. The lawsuit alleges this intentional design is ‘luring’ users into engaging in gambling-like actions, which may lead to long-term harm.
‘Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,’ James said.
‘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.’
The lawsuit further alleges Valve ‘intentionally’ makes some items harder to win than others, with pre-determined odds, to ensure a robust market. While the lawsuit acknowledges the virtual nature of the market created by these items, it has also noted certain rare items have real-world value, with impact on the economy.
The aim for the filing is to ‘permanently stop Valve from promoting gambling features in its games, disgorge all ill-gotten gains, and pay fines for violating New York’s laws’.
Loot boxes are being heavily regulated around the world
The lawsuit filing in New York is the latest attempt to better regulate loot boxes around the world.
In Australia, loot boxes are restricted by age. The inclusion of loot boxes and loot box-like mechanics immediately nets a video game an M15+ rating, meaning it’s not recommended for those under 15 years of age. Any game with ‘simulated gambling’ is immediately rated R18+, restricting sales to adults 18 years and over.
Countries including Belgium, the Netherlands and Brazil have banned loot boxes for young people, for their relation to gambling. Notably, some titles with loot boxes, such as Diablo Immortal, have not released in Belgium and the Netherlands due to this ruling.
As gambling content and ‘predictions markets’ continue to grow in popularity, better regulation to protect vulnerable people, including young children and those prone to gambling behaviours, is sorely needed.
For now, Valve is yet to respond to this latest lawsuit. We’ll have to stay tuned to see how it progresses, and what eventuates.
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