This Week In Skin Gambling: Legal Letters; Dodgy Deals

I remember simpler times when Dota and CS:GO items existed to give our wizards fancy hats and our AWPs hideous paintjobs. Now they’re used as chips in unofficial gambling. They’ve sparked lawsuits accusing Valve of enabling illegal underage gambling and seen scandals over YouTubers being secretly paid to promote skin gambling sites – or even secretly owning the sites they promoted. Oh dear. What’s new in the world of skin gambling this week? Well, Valve started sending “cease and desist” letters and more players and YouTubers became implicated in shenanigans.

If this sounds dry, don’t worry: someone named Karl Quackenbush is involved.

Hoookay! Where to begin? Brief recap. Skin gambling is a type of online gambling using Steam cosmetic items as chips in everything from roulette to betting on professional matches. People bet skins to win skins, and the house takes a cut. None of this is run or endorsed by Valve but it is made possible through Valve’s Steam APIs. The same thing that lets Dotabuff calculate your Dota statistics also lets gambling sites in. Combining that with bots, skin gambling sites let people bet, win, and lose cosmetic items. It only takes a Steam account and some spare skins, generally without verifying users’ age or identity. And while Steam’s own Community Market only lets people sell items for Steam store credit, some can be very valuable if sold for real money outside Steam – so there is an unofficial, risky way to cash out.

Researchers have estimated that 2.5 billion dollars’ worth of skins were bet on the outcome of matches in 2015. That’s not the same as people making billions of dollars in actual money but gives an idea of scale. That’s just betting too, not including other forms of gambling.

Valve this week started cracking down on skin gambling sites, as they had last week said they would. They’ve started with letters ordering sites to stop, and threaten to dish out punishments if sites don’t heed the warning. Gambling site CSGOBig shared the letter they received from Valve’s general counsel, Karl Quackenbush. Mr. Quackenbush’s letter said:

“Re: Violations of Steam Subscriber Agreement

“We are aware that you are operating one of the gambling sites listed below. You are using Steam accounts to conduct this business. Under the SSA Steam and Steam services are licensed for personal, non-commercial use only. Your commercial use of Steam accounts is unlicensed and in violation of the SSA. You should immediately cease and desist further use of your Steam accounts for any commercial purpose. If you fail to do this within ten (10) days Valve will pursue all available remedies including without limitation terminating your accounts.”

Some sites decided to shut down after Valve’s initial announcement, while others had hopes of reworking themselves a little to comply with Valve’s policies but still keep running. Some have yet to acknowledge any of this.

But given the sprawling mess of CSGO gambling and its different aspects and scandals, here’s a quick rundown of other recent developments.

In the realm of the unverifiable but interesting, Richard Lewis had a look at chatlogs supposedly obtained by a hacker. These logs say, among other shocking things, that skin gambling site CSGOShuffle has made over $3 million.

Elsewhere, skin gambling site CSGOWild this week explained that it has paid some members of eSports team FaZe Clan in cash, skins, and ’emeralds’ (gambling chips, basically) to promote the site in YouTube videos. Only the FaZe folk didn’t disclose that sponsorship at the time (they have since been adding notices). At best, that’s bang out of order.

Do remember that the FTC recently fined Warner Bros. over disclosure statements on sponsored Shadow of Mordor videos.

Another twist in the CSGOWild story: HonorTheCall has gathered supposed chatlogs seeming to show that the site is actually owned by leaders of FaZe. That’d be a wee bit different to mere sponsorship.

This might, at the very least, have serious consequences for FaZe’s CS:GO team. Professional teams “should under no circumstances … associate with high volume CS:GO gamblers”, Valve said last year after banning several players for match-fixing.

As for wider consequences for all of this skin gambling, sheesh, we’re on the wild frontier here, gang. Over the next few years, I imagine we might see a lot more regulations put in place – and punishments doled out – for things like this.

It’s taken me ages to post this because I keep waiting for more new and terrible developments but perhaps I’ll just stick to periodic article-based lines in the sand with this whole farrago.


  1. Heliocentric says:

    Valve have done the only thing they can to avoid legal consequences, did they do it too late?Legally no, but ethically? Massively, all steam transactions reward them a tariff.

    It’s a good thing in the long term of Steam’s health this has been cracked down.

  2. kwyjibo says:

    It’s a shame that US gambling laws allow casinos to operate in meatspace but not online. It’s also a shame that sports betting is illegal.

    Everyone else, get yourself on betfair.

    • angrym0b says:

      Hehe meatspace…I like it

    • Sirius1 says:

      Given the shenanigans I’ve seen happen around sports betting, no, no it isn’t a shame that the US bans it. I wish they did in my country.

      Generally, fuck all gambling. It is the nearest thing we have to legalised robbery, and where gambling goes, corruption surely follows. As this article demonstrates.

      • Capt. Bumchum McMerryweather says:

        I personally think it depends on the type of gambling. Bookmaker/casino gambling is daylight robbery. Those people are specifically and exclusively out to fist people as hard as they can with as big a glove as they can wear. Paying out on odds is just a complete farce.

        However pools based gambling, otherwise known as pari-mutuel is a better (more ethical) way to do it. That’s more like betting than gambling; the betting pool goes to the winner, and a cut is taken by those who facilitate the wagering.

        • kwyjibo says:

          Betfair operate a betting market, you’re not betting against the house, you’re betting against other punters.

          They take 5% cut on winnings, which is the same as Valve’s item market commission.

          • Capt. Bumchum McMerryweather says:

            Uh no, they take a 5% on payouts, which by the way are bookie odds-based payouts. I don’t know whether you own or work for bet fair, but they are just as bad as the others. They offer you odds, then pay out on those odds. Unless of course you bet on their track races, which is parimutuel.

          • kwyjibo says:

            No, they’re not “bookie odds”. Betfair run a betting market, it’s an exchange – you have to be matched up against another punter.

            Betfair also operate as a standard bookie, but that service is obviously not what I’m talking about given how I’ve just explained how the market works. They didn’t even offer a standard bookmaking product until 12 years after launch.

            You’re simply wrong.

          • kwyjibo says:

            Also if I did work at betfair, I’d understand the product better than you do. I don’t work at betfair, but I still understand the product better than you do.

          • Capt. Bumchum McMerryweather says:

            Betfair are a betting exchange yes, because people bet on things. But if you bet on something (football tennis, an at 10/1 then you get a 10/1 payout on your bets. Doesn’t matter if 10 million people placed the same bet as you you still get 10/1 odds. That’s how a bookie works. That part of betfair is an online bookie. There is also a pools based wagering service on their website, where you play against the other punters, but if you read my fucking post you’ll see that I already mentioned parimutuel wagering in it. Betfair can offer both products, but their primary operation (and income) is bookmaking.

            You can tell me I don’t know anything about the product, but I already explained both products to people before you even stuck your oar in telling me how a website worked that I already knew how it worked. I worked in the gaming industry for 6 years, for both betinternet & willhills. So yes I do know the products.

      • Unclepauly says:

        How is gambling any worse than anything else like the stock market or a million other things I could name? If you know your odds and you participate at your own volition, wtf? I go to the Casino and play craps twice a month and win more often than I lose. Sometimes I win alot. Sports betting is roughly the same odds with less of a slippery slope to blow it all, unless someone has zero self control. My point is nobody is forcing you to play.

        • Unclepauly says:

          Obligatory “of course someone named UnclePauly would approve of gambling” remark. Just thought I would before anyone else did.

        • phelix says:

          Indeed nobody is forcing you to play, but the issue is largely also about the promotion of underage gambling because it is glamourised by popular youtubers. They don’t force you, but they sure as hell make it look attractive. Dare to bet, dare to win!
          And as we know, teenagers in the middle of puberty are masters of self control. /s

          “participate at your own volition” is not a sure thing when the participants are underage. Same reason there is such a thing as (if you’ll forgive the crude comparison) statutory rape: teenager’s brains are in active development and they will likely not fully grasp the implications and consequences of their actions yet. If they’re too young, their consent means nothing.

          It takes another step into murky waters when youtubers not-so-subtly promote gambling sites that they themselves own and then fail to disclose that or even pretending to be independent.

      • Unclepauly says:

        Good lord that’s a stretch calling it the nearest thing to robbery. You know robbery involves taking something against someones will right? That’s not how gambling works.

      • kwyjibo says:

        Gambling, or “legalised robbery” as you call it, fuels the fucking economy. London generates a third of the UK’s tax revenue, largely due to the city.

        Every time you buy and sell an asset is a gamble. Your pension is a gamble.

        It’s true that corruption attaches itself easily to gambling, that’s why you need licensed regulated markets, not this black market skins bullshit.

        • Premium User Badge

          kfix says:

          Gambling, or “legalised robbery” as you call it, fuels the fucking economy … buy[ing] and sell[ing] an asset is a gamble … Your pension is a gamble

          That’s stretching the definition of “gamble” past the point of usefulness though. There’s a world of difference between taking a calculated (or not, that’s a whole other topic) risk on an investment in a productive enterprise and betting on the outcome of a game. And as big a difference between betting on bookmakers odds or contributing to a pool as mentioned elsewhere.

          And that’s without getting into corrupted outcomes, unequal knowledge of the participants, exploitation of known cognitive biases, misleading advertising and all the other horrible behaviours that appear to be inseparable from organised gambling at scale.

          I know you are advocating

          licensed regulated markets

          not a free-for-all, but conflating productive but risky investments with gambling is a terrible thing to do if it legitimises exploitative gambling – and here I’m also including a lot of “manufactured” financial products that are exactly exploitative gambling and not productive investment.

  3. PineMaple says:

    “This might, at the very least, have serious consequences for FaZe’s CS:GO team. Professional teams “should under no circumstances … associate with high volume CS:GO gamblers”, Valve said last year after banning several players for match-fixing.”

    I could be wrong, but I believe the CSGOWild site is owned by FaZe CoD players, not their CSGO players. Now the CSGO players may have had something to do with the advertising of CSGOWild, but the more serious accusations have been leveled at the org owners, not the CSGO players.

    • Premium User Badge

      johannsebastianbach says:

      You are correct. None of the CSGO Faze players had anything to do with this, just the CoD streamer guys. Because, apparently, a lot of CoD/Minecraft/LoL-Streamers have been doing nothing but gambling (or fake gambling) with CSGO items (a game they never even bothered to play) on their streams for the last year or so and viewers seemed to love it.
      I don’t understand this world anymore.

  4. kwyjibo says:

    The only virtual good worth gambling with is cryptocurrency.

  5. Bernardo says:

    Valve’s general counsel, Karl Quackenbush

    I’m sure there’s a Duckburg joke in there somewhere.

  6. DelrueOfDetroit says:

    So what voice did everyone give Karl Quackenbush in their head? I went with something a little Kermit the Frogish.

  7. PseudoKnight says:

    Next step: remove gambling from the game itself and steam marketplace.

  8. CarthAnne says:

    I have nothing to add, but fuck all these websites.

  9. GSGregory says:

    So is anyone else worried about the argument valve is using to stop them? No commercial use? Isn’t selling items on the steam workshop a commercial use? Promoting games via youtube? Hell what about using a steam account to write video game news…?

    • Premium User Badge

      johannsebastianbach says:

      It’s not about using your steam account. It’s about using the Steam APIs to create bots that operate like real persons while being bots for commercial use. You’re fine creating videos and writing articles and selling on the marketplace as long as you’re not abusing the Steam API for their party websites.

      • Premium User Badge

        johannsebastianbach says:

        third party, not their party. Jesus, missing edit button!

  10. hpoonis says:

    I realise that there are such saddos lingering out there but, the idea of spending time, effort and not least of all, money on something that does nothing to make any game more enjoyable, only altering someone’s generic, game-delivered weapon into a yellow/flag-draped/butt-shaped weapon, seems to me to be tantamount to pre-pubescent idiocy. I am getting the idea that hardcore gamers are only a paper-thin wall away from having a mental episode and gunning the general public down in a frenzy of Columbine/Sandy hook proportions. Anyone who takes this crap seriously is on the fringe of sanity anyway. If these wastrels got out more and off their computer/phone they might understand that there are far more pressing issues then whether or not Billie Joe Loser has a death’s head emblazoned on his pixellated popgun.