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CSGO Lounge ceases skin gambling activities

Following Valve crackdown, virtual item trading site will no longer handle online bets

CSGO Lounge, one of the most popular and well-known Counter-Strike: Global Offensive skin gambling destinations, today announced an end to onsite betting.

The site posted its intention via Facebook. "Today we are announcing that we are closing our virtual items betting functionality with immediate effect. Depositing virtual skins and items in order to place a bet is not possible anymore."

CSGO Lounge was one of dozens of sites that allowed CS:GO players to make online wagers — either on random games of chance or on the outcome of professional esports contests — using skins earned or traded via Valve's shooting game.

But a recent crackdown on skin gambling, which often involved minors, has shaken up a once lucrative business. Last month, Valve announced that it would be sending cease and desist letters to skin gambling sites.

"We are going to start sending notices to these sites requesting they cease operations through Steam, and further pursue the matter as necessary," said Valve's Erik Johnson, in a statement released on July 13. "Users should probably consider this information as they manage their in-game item inventory and trade activity."

CSGO Lounge, which also runs a skin trading business, responded by claiming that its activities could not be construed as gambling because "Virtual items in CS:GO have no monetary value" and that "community interaction with the virtual items is meant only for entertainment, without any profit interest." Nevertheless, the site announced its intention to apply for an official gambling license.

CSGO Lounge was also named in a lawsuit filed by CS:GO player Michael John McLeod against Valve and other gambling sites, back in June, alleging that they all "knowingly allowed, supported, and/or sponsored illegal gambling by allowing millions of Americans to link their individual Steam accounts to third- party websites."

The skin gambling scandal was exacerbated by YouTubers and professional gamers who ran or were paid to publicize gambling sites, without revealing their interest.

But in today's statement, both CSGO Lounge and its sister site Dota2Lounge backed away from gambling. "Lounge will continue as an esports entertainment and information platform with new features to be released very soon," added the statement.

The announcement comes in the wake of a report from Esports Observer stating that CSGO Lounge is majority owned by ESforce Holding, the same company that owns esports team ESforce Holding is owned by Alisher Usmanov, one of the richest business magnates in Russia.

It's not clear yet exactly how the closure will affect players who have banked their skins and inventory with CSGO Lounge. "At the moment we are working on a solution for items withdrawal, please stay tuned for an update on this topic," offered the statement.