On Jan. 7, a U.S. federal court dismissed its last claim against Valve over a years-long lawsuit over CS:GO skin gambling. The case was part of a series of lawsuits in 2016 that accused Valve of promoting unregulated gambling on third-party sites where people could bet on CS:GO skins, some of which sold for more than $1,000 on the Steam marketplace Dollar. All of these lawsuits have now been dismissed.
Back in 2016, stories of teens breaking their parents’ credit card limits to buy CS:GO weapon chest keys so they could gamble on black market sites hit mainstream news: “Virtual weapons are turning teenage gamers into serious gamblers,” Forbes reportValve received some harsh words from the Washington State Gambling Commission at the time, but in the end, Gabe Newell and company appear to have avoided any lasting legal damage from the controversy.
The just-dismissed lawsuit was brought by parents who said they found their children spent the money they gave them on CS:GO weapon chests and then gambled on skins on gambling sites. It alleges that Valve “facilitated” illegal online gambling through third-party sites such as CSGO Lounge and misled the public about the type of business it operated. Over the course of several years, the claims were cut by the courts until no one was left.
The first blow to the case was something we’ve flipped through in every TOS document we’ve ever signed: arbitration. The Steam User Agreement states that if you have a legal issue with Valve, you must resolve it with an arbitrator instead of a judge, which simplifies and speeds up the process. The court initially agreed that Valve agreed to apply the arbitration clause in the subscriber agreement.
The arbitrator rules in favor of Valve. The plaintiffs were unable to convince them that Valve was the “owner” of the skinned gambling sites that used its API, or that it had used deceptive practices to encourage gambling on those sites. One person pointed out that the minor heard about skin gambling from a friend, not Valve, so he voluntarily chose to participate, which violated the Steam agreement.
Valve didn’t get rid of it that easily, though.Parents appealed, court of appeal ruled that while children They agreed to the Steam Subscriber Agreement, but the parents didn’t, so they could still sue. The case continues, but the parents have run out of viable complaints.
Courts typically don’t overturn decisions made in arbitration, so any disputes between the minor and Valve are over, and the claim that Valve is responsible for third-party skin gambling sites won’t work. When the parents brought it up, the court immediately dismissed it on the grounds that an arbitrator had already ruled on the issue.
loot box theory
Not considering the skin gamble, the plaintiff turned to CS:GO’s weapon box and locked himself with what came to be known as “Lootbox Theory.” The claims are that Valve violated Washington’s consumer protection laws by deceiving parents into providing their children with funds to buy loot boxes, which they describe as unlicensed gambling disguised as video games. They said Valve hid the risks and didn’t disclose the odds.
As part of its defense, Valve argued that loot boxes were not legally defined as gambling in the United States, but that claim was dismissed for a simpler reason. U.S. District Judge James L Robart said the parents could not have been deceived by Valve because they “never visited the Valve or Steam website, never used Steam, and never played CS:GO. , and never saw or read any of Valve’s statements about CS. :GO, keys or weapon cases.” The parents said in their testimony that they only discovered the weapon cases and skin bets from their children after the fact, so even though Valve released A bunch of disclaimers about loot boxes, and they won’t see any of them either.
Well, that’s it. This claim was dismissed for bias, meaning they couldn’t retry, and many other claims have been dismissed over the years. The first cases filed in Connecticut and Florida claimed that Valve violated the Racketeering Influence and Corrupt Organizations Act (yes, the same RICO law that prosecuted the Mafia), a claim that federal court rejected. After more failed attempts, the current version of the case, which began its journey through the legal system, got here. The only public gambling case I could find was the Quinault Nation filed in 2019, but there doesn’t seem to be any movement lately.
Valve insists it doesn’t condone or support skin gambling sites, even if they use the Steam API. Back in 2016, it all exploded when Valve sent a cease and desist letter to the CS:GO skin gambling site. Some did shut down, including CSGO Lotto, after accusations that its owners did not explicitly disclose their affiliation with the site in YouTube ads, which drew more attention to skin gambling, leading to a response from the Federal Trade Commission.
Skin gambling continues, although it has been ignored since 2016. Following a 2018 Supreme Court ruling, sports betting is now legal in many U.S. states, creating an opportunity for the esports betting industry not to be overshadowed by CS: GO skins or other non-monetary tokens.