NEW YORK, Feb 25 - New York's attorney general has brought a civil action against Valve, the developer behind popular titles including Counter-Strike, Team Fortress and Dota, alleging the company's implementation of "loot boxes" runs afoul of state gambling laws.
The complaint, filed in a state court in Manhattan, contends that Valve's loot boxes are a form of gambling because they operate as games of chance. According to the filing, valuable virtual items are often difficult to obtain, while many of the items that can be won are worth only pennies. Attorney General Letitia James described the practice as "quintessential gambling."
Valve, which is based in Bellevue, Washington, did not immediately provide a response to requests for comment, the complaint notes.
Loot boxes permit players to spend real money for an opportunity to receive virtual items. The complaint explains that these items can include decorative enhancements for characters and weapon skins, which are intended to signal status to other players. The suit highlights the economic mechanics behind the system, saying Valve charged New Yorkers tens of millions of dollars for so-called "keys" used to open loot boxes.
Those keys, the complaint states, helped advance Valve's business model in which players can resell items they obtain on Valve's own Steam Community Market or on other marketplaces. The filing points to the company's facilitation of a secondary market as integral to the alleged scheme.
In describing the user experience, the complaint alleges that in at least one game the act of opening a loot box resembled a virtual slot machine. The process is described as a wheel that whirred through various items before stopping on the item awarded.
James' complaint emphasizes the potential harm to young people, saying, "Valve's loot boxes are particularly pernicious because they are popular among children and adolescents." The filing cites research, noting that children introduced to gambling face a significantly higher risk of developing gambling addictions later in life.
Legally, the attorney general accuses Valve of violating New York's constitution and penal law by promoting gambling. The suit seeks restitution for players who purchased loot boxes and requests a fine equal to three times the company's alleged illegal gains.
Summary
New York's attorney general filed suit against Valve in Manhattan state court, alleging that the company's loot boxes are games of chance that violate state gambling laws. The complaint points to the difficulty of winning valuable items, the low value of many rewards, the sale of keys generating tens of millions of dollars, and the facilitation of secondary markets. The lawsuit seeks restitution for players and a penalty of three times the alleged illegal profits.
Key details
- Valve franchises named in the complaint include Counter-Strike, Team Fortress and Dota.
- The company is based in Bellevue, Washington, and did not immediately respond to requests for comment.
- The suit was filed by Attorney General Letitia James in a state court in Manhattan.