A major market
Video game giant Valve has been sued by the New York Attorney General for allegedly offering illegal gambling in the state. New York AG Letitia James posted a strongly worded statement to X on Wednesday, saying that the company has made “billions” by “letting children and adults illegally gamble” through its loot boxes:
Valve has created massively popular games like Dota 2, Counter-Strike, and Team Fortress 2. The Counter-Strike loot box market is particularly prominent, with an estimated value of $4.3bn. People can pay $2.71 in New York to open one of these virtual crates in the hope of getting a rare item. Gamers buy and sell the in-game items on Steam’s marketplace.
risk real money with the possibility of receiving a reward of actual monetary value
The New York lawsuit claims that because Valve allows people to risk money with the possibility of receiving items that have real-world value, its loot boxes constitute illegal gambling.
Big money maker
Valve makes money both from the sale of the loot boxes and from a 15% fee on the Steam marketplace. The New York lawsuit also claims that loot boxes use many casino-style mechanics, like graphics, audio, and reward mechanisms, making them very similar to slot machines.
claims that Valve does not properly verify ages
The complaint emphasizes that the loot boxes are especially dangerous to younger people. It claims that Valve does not properly verify ages, meaning kids can be exposed to products that could be akin to gambling. Research has shown links between loot box opening among adolescents and problematic gambling.
Seeking a statewide ban
The lawsuit specifically claims that Valve is offering unauthorized gambling to New Yorkers, promotes gambling, and has been pursuing repeated illegal business conduct. The Attorney General wants a permanent ban on loot boxes in the state and is also seeking restitution and damages for consumers, disgorgement of profits, and civil penalties.
Video game companies have come under similar pressure in other regions over the past few years. Countries like Belgium and the Netherlands have either totally banned loot boxes or heavily restricted them. The UK government has acknowledged potential harms, but didn’t determine a causal link between problem gambling and loot box spending.
