Valve Has Been ‘Letting Children and Adults Alike Illegally Gamble,’ New York A.G. Alleges

“Valve’s Loot Boxes Pose the Same Dangers as Casino Gambling, Especially for
Children.”

That’s the central thrust of a searing new lawsuit against games industry titan Valve filed on Wednesday. The office of New York State Attorney General Letitia James launched its own investigation into the publisher of Dota 2 and the Counter-Strike series and owner of the Steam game marketplace. The suit alleges that Valve’s loot boxes entice users into paying for chances to win expensive items that can be resold, effectively roping them into gambling.

The allegation that Valve is promoting gambling is far from new, and has been spelled out in numerous online blog posts and videos. The YouTuber People Make Games  made a pretty detailed one three years ago.

For over a decade, certain games have occasionally given items visualized as, for instance, locked crates in the case of Team Fortress 2. This crate is “displayed as a container secured with a padlock,” the New York suit notes, “indicating to a user that they must purchase a key if they wish to open the loot box.” A key generally costs $2.49 plus tax.

If your loot box has something amazing in it, and you’d like money instead of that prize, you might be tempted to sell what you just won. “Users can do so in two ways: through the Community Market that Valve operates on the Steam platform, and through third-party marketplaces,” the suit notes. Such markets, “motivate users to purchase keys from Valve in the hopes of opening a loot box and winning a high-value item they can cash in,” the suit claims.

A City University of Hong Kong study published last year in the peer-reviewed Journal of Addictive Behaviors linked the behaviors around buying and potentially profiting from loot boxes with similar behaviors tied to trading card games like Magic: The Gathering and the Pokemon card game. The authors find that there are associations with problem gambling, and that they’re worse with loot boxes than with trading cars. But the authors also find, importantly, that in the case of their study (which was drawn from surveys) “Spending money on all these gambling-like products were not associated with negative mental health.”

In the section in the filing on supposed harms, the suit points to an ESPN article from nine years ago about a boy named Elijah who started playing Counterstrike: Go as a minor, and developed what the article characterizes as problematic behaviors, playing for prizes first thing in the morning and at the school library, and uttering gambler-like statements such as, “I lost 10 times in a row and lost it all.”

According to the suit, the market for Counter-Strike items alone is absolutely massive, “estimated to be in the billions of dollars, an unparalleled sum in the video game industry.”

According to Forbes, Valve president Gabe Newell has a net worth of $11 billion.

Gizmodo has reached out to Valve for comment, and will update if we hear back.