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NEWS 27 June 2016
Video game developer facing gambling lawsuit
By Tom Lewis
Valve, the company behind popular video games including Counterstrike: Global Offensive (CS:GO) and Half-Life is facing a lawsuit over “illegal gambling”, per video gaming news website Polygon.

The suit relates to CS:GO, and what is known as the skin betting market.

Skin betting sprang up following the August 2013 release of Valve’s “Arms Deal Update” for the popular online game, which allows players to trade decorated weapons for use in-game.

Players have been known to wager skins, in the same manner one wagers casino chips, on the outcome of a variety of different events, from eSports matches to more traditional casino games like roulette and blackjack.

According to a recent estimate from Eiler & Krejcik Gaming and Narus Advisors, bettors are expected to wager around $7.4bn on the activity in 2016.

A number of third-party websites have been set up in the intervening three years to facilitate the betting and trading of skins, several of which do not require age verification.

Filed by Fairfield, Connecticut resident Michael McLeod last Thursday, the suit alleges that Valve “knowingly allowed, supported and/or sponsored illegal gambling by allowing millions of Americans to link their individual Steam accounts to third-party websites.”

As such, Valve stands accused of knowingly allowing “an illegal online gambling market and has been complicit in creating, sustaining and facilitating that market.”

The suit, which is seeking unspecified damages and class action status, alleges that Valve directly profits from transactions tied to gambling, providing “legitimacy” alongside “money, technical support and advice” to the betting sites CSGO Lounge and CSGO Diamonds, as well as OPSkins, which operates a market where virtual goods can be traded and redeemed for cash.

The complaint concludes: “In sum, Valve owns the league, sells the casino chips, and receive a piece of the casino’s income stream through foreign websites in order to maintain the charade that Valve is not promoting and profiting from online gambling, like a modern-day Captain Renault from Casablanca.

“That most of the people in the CS:GO gambling economy are teenagers and under 21 makes Valve’s and the other defendants’ actions even more unconscionable.”

Valve is yet to comment on the lawsuit.
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