New York sues Valve, alleging its loot boxes are ‘quintessential gambling’

New York Attorney General Letitia James is suing Valve for “illegally promoting gambling” through the loot box systems it has built for video games like Counter-Strike 2, Team Fortress 2, and Dota 2, according to a press release. The attorney general seeks to “permanently stop Valve from promoting gambling features in its games, disgorge all ill-gotten gains, and pay fines for violating New York’s laws.”

“This loot box model that Valve has developed — charging an individual for a chance to win something of value based on luck alone — is quintessential gambling, prohibited under New York’s Constitution and Penal Law,” the lawsuit says. Valve has made “tens of millions of dollars” selling loot box keys to “thousands” of New York residents and has “made millions of dollars more in commissions from New Yorkers who sold virtual items obtained from loot boxes.” The company’s loot boxes are also “particularly pernicious” because they’re popular with children and adolescents, according to the complaint.

Users can purchase keys to open loot boxes in some Valve games and receive randomly-selected virtual items as rewards. If they want, users can then sell those rewards on the Steam Community Market and on third-party marketplaces; the rarer items can be worth “thousands of dollars,” the lawsuit says. These systems, however, require that users pay Valve $2.49 plus tax to open the loot boxes, and users often get items that are “worth less than what the user spent on the key”. The lawsuit also notes that Valve’s experience for opening a loot box in Counter-Strike 2 resembles that of a slot machine.

Valve didn’t immediately reply to a request for comment.