New York Attorney General Sues Valve Over Alleged Illegal Loot Box Gambling

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New York Attorney General Letitia James is suing Valve, the company behind popular video games like Counter-Strike 2, Team Fortress 2, and Dota 2, claiming they run illegal gambling operations within those games. The lawsuit follows an investigation that found Valve’s ‘loot boxes’ require players to spend money for a chance to win rare in-game items that can be sold for real money.

Valve, the company behind popular video games, also operates Steam, an online platform where people can buy and trade games. Some of their games feature ‘loot boxes’ – virtual containers players can open by purchasing a key for $2.49 plus tax. When opened, each box reveals a random cosmetic item, like a new weapon design or character customization. Valve controls the chances of receiving different items.

Counter-Strike 2 features cases that, when opened, display a spinning wheel animation to reveal a random item. This is similar to how slot machines work. While these items don’t improve your gameplay, players can buy and sell them online – some have even sold for over $1 million. Valve designs the system to make certain items very rare, which drives up their value. However, many players end up with items worth less than the $2.49 they spent to open the case.

As a big fan, I was shocked to read this! Apparently, this game has made billions for the company. The documents show they’ve taken in tens of millions just from New York players buying those loot box keys. And it doesn’t stop there – they’ve also made millions more from New Yorkers reselling items they got from those boxes. It’s a huge amount of money!

As a player, I know we can trade items in a couple of ways. We can sell them on the Steam Market and use the money to buy more games or other stuff on Steam. Or, we can link our accounts to other websites and actually get real cash for our items. What the Attorney General found out is that Valve really helps these outside sites run, which is pretty interesting.

Counter-Strike skins have become increasingly valuable, attracting investors and those hoping to profit from them as digital collectibles. The market for these skins was estimated at over $4.3 billion in March 2025. This high value, along with the ability to trade them on external sites, has unfortunately led to an increase in crime. Valve, the game’s developer, has received hundreds of thousands of reports from players whose Steam accounts have been hacked or who have been victims of item fraud.

The lawsuit argues that the game’s loot boxes function as illegal gambling under New York law and its state constitution. Gambling is generally prohibited in New York, and the Attorney General believes none of the limited exceptions apply in this case. The complaint highlights that this system is especially harmful because it attracts young players who may spend money they don’t have trying to get valuable items in the game. Research suggests that children exposed to gambling are four times more likely to develop a gambling addiction as adults.

According to James, illegal gambling can be dangerous and lead to addiction, particularly among young people. She claims Valve has profited significantly by allowing both adults and children to gamble illegally for valuable in-game items. These features are harmful, addictive, and violate the law, prompting her office to take legal action against Valve to halt this activity and safeguard New Yorkers.

The lawsuit highlights worries about games that feature violence and guns, arguing they fuel the growing problem of gun violence. The attorney general specifically points out that this can be especially harmful to young players, whose brains are still developing and who may become desensitized to serious violence.

The attorney general is taking legal action to permanently stop gambling-like elements in Valve’s games. They are also seeking to recover any unfair profits Valve made, provide compensation to affected consumers, and impose financial penalties as allowed by New York state law.

For over ten years, there’s been ongoing discussion about whether loot boxes should be considered a form of gambling, leading to varied rules around the world. Some countries, like China and South Korea, require game companies to clearly show the odds of getting different items. In Australia, games with loot boxes usually receive a rating that means they’re not suitable for children under 15, but they aren’t legally banned. Games that closely resemble gambling get an even higher age rating and can’t be sold to anyone under 18. Belgium has gone further and banned loot boxes altogether, but it’s been difficult to fully enforce this rule.

New York Attorney General Letitia James recently filed a lawsuit as part of her ongoing efforts to protect residents from online dangers and illegal gambling. This follows several actions she’s taken, including a Super Bowl-timed warning about the risks of sports betting. Earlier this year, she joined 39 other attorneys general urging Congress to pass the Kids Online Safety Act (KOSA) and supported New York’s SAFE for Kids Act, which aims to limit addictive social media for teens. Currently, she’s leading legal challenges against Meta and TikTok, alleging these platforms harm young people’s mental health. Last year, her office shut down 26 online casinos falsely claiming to be legal sweepstakes.

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2026-02-26 15:17