New York Attorney General Letitia James has sued Valve Corporation (Valve), a video game developer, for illegally promoting gambling through video games popular with children and teenagers.
Key Takeaways
- Attorney General James seeks to permanently stop Valve from promoting illegal gambling.
- James: "Valve has made billions by letting children and adults alike illegally gamble."
- Market for "Counter-Strike" skins surpassed $4.3 billion.
Details of the lawsuit were made public Wednesday afternoon. An investigation conducted by the Office of the Attorney General found that Valve’s video games, including "Counter-Strike 2," "Team Fortress 2," and "Dota 2," enable gambling by enticing users to pay for the chance to win a rare virtual item of significant monetary value. With Valve’s most popular game, the process resembles a slot machine, with an animated spinning wheel that eventually rests on a selected item.
The lawsuit claims that the randomly selected virtual items have no in-game functionality but can be sold online for money, with one item reportedly going for more than $1 million. The lawsuit alleges that Valve has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling in the hopes of winning expensive virtual items that they can cash in on.
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Attorney General seeks to prevent illegal gambling in N.Y.
Attorney General James is looking to permanently stop Valve from continuing to promote illegal gambling in its games.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” James said. “Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes. These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers.”
The lawsuit alleges that Valve – the developer, publisher, and distributor of these video games – enables gambling through these games by offering the chance to win a rare virtual item by paying to open a “loot box.”
The virtual items could include a hat for a player's character or artistic skins for a player's weapons. Prizes won from the loot boxes are determined randomly in accordance with odds set by Valve.
The OAG office claims "Valve intentionally makes some items far harder to win than others, making the rare items more valuable. Despite having no in-game functionality, these virtual items can be extremely valuable, with the rarest items selling for thousands of dollars online."
Wednesday's announcement noted that the value of "Counter-Strike’s" skins rose significantly in recent years, attracting speculators and investors who consider these virtual items as potentially lucrative digital assets. The market for "Counter-Strike" skins reportedly surpassed $4.3 billion in March 2025.
How Valve users can cash in
Valve users have two ways of cashing in on virtual items. One option is using the Steam Community Market where users can use proceeds to purchase other video games and other virtual items. The website includes sections for new releases, specials, and free games. The second option is to connect a Valve account to third-party marketplaces where the virtual items can be sold directly for cash. The OAG’s investigation alleges that Valve facilitates and even assists these third-party transactions.
The OAG announcement highlighted how the high value of "Counter-Strike’s" rare skins and the ease of liquidating items through third-party marketplaces have made these items attractive to thieves. It goes on to mention that Valve has received hundreds of thousands of support requests from users on accounts being hacked or being tricked into transferring items.
James states that young users with limited funds can be enticed to start gambling through loot boxes in the hopes of obtaining a virtual item and that research has shown that children who are introduced to gambling are four times more likely to develop a gambling problem later in life.
In the lawsuit, Attorney General James seeks to permanently stop Valve from promoting gambling features in its games, disgorge all gains, and pay fines for violating New York’s laws.
New York illegal gambling prevention measures
With the Valve lawsuit, James' office is making a push to stop illegal gambling in New York. However, raising the red flag on video games like "Counter-Strike" and "Dota 2" is just the newest target within the Empire State.
In December, Gov. Kathy Hochul signed Senate Bill 5935 into law, effectively banning sweepstakes casinos in New York. New Jersey, California, and Michigan have implemented similar bans. Operators caught breaking the law could face fines of up to $100,00 for each violation.
