New York sues game developer Valve, alleges gambling promotion
The US state of New York has filed a lawsuit against Valve Corporation, claiming as it sues the industry giant that an in-game mechanic that the developer uses and promotes in multiple popular titles is too similar to gambling.
The lawsuit specifically targets loot boxes, an in-game mechanic that players unlock using real-life money for a chance to win in-game prizes. The rewards are sought after and traded, often using real money. The Attorney General for the state of New York alleges that the mechanism is too similar to gambling and seeks a court order demanding that Valve remove these elements from its games.
New York AG claims Valve loot boxes are the same as slot machines
New York Attorney General Letitia James claims Valve is illegally promoting gambling through its use of loot boxes, as loot boxes require purchasing a key using real-life money to unlock probability-based rewards, thus mimicking slot behavior.
How a loot box works is relatively straightforward, as players unlock the items using keys. The lawsuit compares this mechanics to that of a slot game. Such casino games typically have players use money to spin and then wait for a random, probability-based outcome, resulting in either a loss or a win. Loot boxes don’t have all of the same elements, but their rewards are also random.
The Attorney General argues that this means that loot boxes constitute gambling, and that Valve is illegally promoting the act in its most popular multiplayer titles, most notably including Counter-Strike 2.
Image credit: Valve
The rewards loot boxes give vary according to the Valve game in question, but the cosmetics and other items are frequently sold or bought between players for real money. This trading is done primarily via Valve’s Steam Community Market, and sometimes through other third-party marketplaces, using real-world currencies. The AG argues that the full practice could be dangerous for younger players, as some items can sell for thousands of dollars.
The lawsuit argues two main points: That Valve is taking money from players to have them gamble for prizes, and that the prizes are then being traded among players at high monetary values. According to some industry reports, Valve has netted massive amounts of money over the years by selling its loot boxes, and the New York AG has used this as an argument that the developer has financially benefited from the alleged illegal gambling promotion and practice.
The lawsuit seeks to have Valve cease the use of loot boxes among all its titles immediately and to give restitution to New York residents. It also seeks to fine the game developer for profits it has made from loot boxes over the years.
It’s unclear whether New York will be able to get a court to rule on loot boxes being considered gambling. Lawmakers in the United States have attempted to ban loot boxes, but the effort failed to progress.
If this lawsuit is successful, it could set a precedent for future cases and other states. This lawsuit has also come at a time when New York is attempting to legalize and further regulate online casinos, and the state may want to curb other related services that it deems are overly similar to gambling.
Feature image credit: Canva, Valve
Khizar Mundia has been playing video games for as long as he can recall. Things have come a long way since the many days he spent playing the original NES, though. He now covers a variety of competitive games and esports, as well as the world of streaming, ranging from Twitch to Kick. If it’s of interest to gamers, it’s of interest to Khizar.
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