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Lawyer: Valve’s silence while helping gambling sites is ‘unconscionable’

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Skins can cost in the hundreds of real dollars

Valve public silence while privately helping gambling sites operate in the Steam Marketplace is unconscionable, according to a lawyer representing a player suing the game developer over "illegal gambling" surrounding Counter-Strike: Global Offensive.

Jasper Ward, who conducted an email interview with Polygon this week, is one of several attorneys representing a player who filed a lawsuit against Valve late last month accusing the company of allowing an illegal online gaming market to grow up around the shooter and its use of weapon skins. He is also one of the lawyers representing another player, this one underage, who filed a second suit against Valve about a week later.

In both cases Valve is being accused of deliberately allowing the creation of a market where players and third-parties trade weapon skins like casino chips. The lawsuits accuse Valve and third-party sites like CSGO Diamonds, CSGO Lounge and OPSkins of allowing millions of Americans to link their individual Steam accounts to websites that allow players to gamble with their CS: GO weapon skins.

"In sum, Valve owns the league, sells the casino chips, and receives 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," the suit alleges. "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."

Because this issue could be impacting consumers nationwide, Ward said that there will likely be multiple cases filed in different states. Those are then usually consolidated under one judge. The case is also seeking class certification, which if approved, would likely join the cases together with the different litigants becoming one group.

Ward told Polygon he became involved in the case because he is one of the lead counsels for consumers in the DraftKings/FanDuel case. That case centered around whether daily fantasy sports violates state gambling laws.

In this case, Ward says, Valve "created and is profiting from an online gambling ecosystem that, because it is illegal and unregulated, harms consumers, many of whom are teenagers.

"Parents don't know this is going on and can't talk to their kids about it because the gambling chips are called ‘Skins’ and it seems like just another in-game purchase."

While the case may ultimately go to trial where a jury will decide culpability, Ward says he believes that Valve is responsible based on what is publicly known.

"Valve is like a bar owner who lets people set up roulette wheels and blackjack tables in the back, sells chips to teenagers on their way in the door, and then makes people cash out at the pawn shop across the street," he said. "Oh, and it has created a new game it owns and on which those kids can gamble, then lets the bookies take bets on it in the corner booth. The fact that it's Valve's server and software instead of a bar, and Steam's API instead of a physical roulette wheel and international websites like OPSkins instead of a pawn shop and Lounge instead of a bookie in the corner booth doesn't change what Valve is doing: it has created a gambling ecosystem out of thin air, and its customers are getting scammed and losing money on rigged websites as a result.

"But Valve should have a chance to tell its side of the story, and we are anxiously awaiting their explanation."

We’ve reached out to Valve multiple times for comment, but have not heard back. When they respond we will update this story. Valve has not yet responded to the suit, Ward said.

One of the key factors, Ward said, is that by allowing players to resell the weapon skins they get through in-game chest drops and open through purchased keys, they’ve created value for the aesthetic-only add-ons.

"The ability to convert Skins to cash makes them a thing of value, and makes gambling those things of value online illegal," he said. "Teenagers should not have to hide this from their parents, and parents should have all of the information about what is really happening when their kids ask them to use the family credit card to buy Skins for their game.

"The fact that there is a real world cash value of Skins - a fact Valve is well aware of - is one of the things that Valve is going to have to address."

The case is made more complex by the crop of third-party websites that allow players to use their skins to gamble. Over the long weekend, the owners of one of those sites was revealed to be major players in YouTube’s Counter-Strike: Global Offensive community. Neither disclosed that relationship while promoting the site, a violation of the Federal Trade Commission’s guidelines. The site, CS: GO Lotto is not named in either of the existing suits.

The CS:GO Lotto site was temporarily blocked by Steam and then unblocked.

"The Lotto scandal is a perfect example of how what Valve has created harms consumers," Ward said. "That, combined with the quote from an anonymous Valve employee in the Daily Dot article talking about how there were rigged roulette sites in Russia, should help shed light on the Skins gambling issues, the position it is putting Valve's customers in of being subject to scams, and prompt some sort of action from Valve.

"Valve's decision to unblock Lotto after this is mind boggling and I look forward to getting answers from Valve's key decision makers on that. Or even a quote on the record from someone at Valve about the Skins gambling economy would be a good start. Valve's public silence while privately helping gambling sites operate in the Steam Marketplace is unconscionable."