New York initiates legal action against Valve, claiming violations of gambling laws regarding loot boxes

The state of New York, led by Attorney General Letitia James, is taking legal action against Valve. The lawsuit claims that the company's games, including Counter-Strike 2, Team Fortress 2, and Dota 2, have loot boxes that illegally promote gambling among minors.

An investigation by the Office of the Attorney General led to a lawsuit filed on February 26, asserting that Valve has accumulated billions by enticing its user base, including many youths, to participate in gambling.

The lawsuit requests that Valve be permanently barred from engaging in illicit gambling activities in its games and seeks monetary penalties and forfeitures.

According to New York's legal framework, gambling is generally illicit with certain exceptions. The suit identifies Valve's loot box practices as classic gambling, falling outside legally permissible activities.

In particular, the suit points out that the loot box mechanics in Counter-Strike 2 are akin to slot machines, a method used by gambling platforms to encourage financial expenditures in the hope of acquiring valuable items.

Attorney General James emphasized the risks, stating, "Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people."

James also charged that Valve profited greatly from allowing both children and adults to unlawfully gamble for virtual items, deeming these mechanics addictive and against the law. Her office aims to end these practices to protect citizens of New York.

The issue of loot box regulation is an ongoing discussion within the gaming industry.

In recent developments, the Supreme Court of Austria established that FIFA's loot boxes do not amount to gambling as they demand skill. Meanwhile, last September, Brazil implemented a ban on loot box sales to minors under broader online safety initiatives.

For more insights into global loot box legislation, researcher Leon Y. Xiao's annual report for GamesIndustry.biz offers a comprehensive overview.