G-Man Tells Valve To ‘Stop Facilitating Gambling’

The Washington State Gambling Commission, a state agency governing gambling in that fair corner of Cascadia, has told Valve that they must “stop facilitating gambling” with Steam skins. If you’ve missed this whole fuss, basically: sites have been using Counter-Strike and Dota cosmetic item skins as chips for unregulated – and potentially underage – gambling, all running through Steam channels. Steam’s rules do forbid this and Valve recently stepped up and started sending legal letters ordering sites to knock it off. Now The Man is involved in Valve’s home state, and he’s none too pleased.

The problem is that while skin gambling sites aren’t run by Valve and the Steam user agreement forbids it, these sites do connect to Steam through a Steam API and use Steam accounts run by bots to cash in and cash out items. That’s enough to upset the Gambling Commission. Yesterday they announced their interest, saying they first contacted Valve about this problem in February. Their stance now is this:

“Based on the information it has gathered, the Gambling Commission directed Valve Corporation to stop facilitating the use of ‘skins’ for gambling activities through its Steam Platform. The Gambling Commission expects Valve to take whatever actions are necessary to stop third party websites from using ‘skins’ for gambling through its Steam Platform system, including preventing these sites from using their accounts and ‘bots’ to facilitate gambling transactions.”

The Commission has given Valve until October 14th to explain how they’re compliant with Washington State’s gambling laws, under threat of “additional civil or criminal action”. Lawks.

Valve’s Doug Lombardi, asked about this by the folks at cheery RPS fanzine PC Gamer, pointed again to their their July announcement that skin gambling was naughty and forbidden. “Our position has not changed and so far we’ve sent cease and desist notices to over 40 sites,” he said.

We’ll have to see if that’s enough to satisfy The Man.

The skin gambling fuss has done a fine job proving the importance of regulation. It’s turned up cases of YouTubers being paid – and not disclosing it – to promote skin gambling sites with fixed big wins, and people even promoting sites they themselves secretly own. While some sites are fairly well-trusted, there’s no guarantee that any of it is legit. It’s not just Steam caught up in this mess, mind – two men in the UK have been charged over a site gambling with virtuacoins from FIFA’s Ultimate Team mode.

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35 Comments

  1. Plank says:

    Valve remind me of a modern day Fagin. But instead of having children pick peoples pockets, Valve/Fagin pick the pockets of child gamers themselves.

    • Distec says:

      I’d be surprised if most of the people playing with such gambling sites are anything but adults, with few exceptions. I don’t know why people are zeroing on the “underage” part and glossing over the “potentially” that precedes it.

      That’s not to absolve Valve from responsibility on the matter.

      • Emeraude says:

        I’m thinking because of how much it underlines the complete lack of regulatory control.

        That’s how I use it anyway.

        • Distec says:

          It’s a completely fair concern!

          I think it’s more reasonable to frame this as “Valve has a system with insufficient oversight that children could fall prey to” versus “Valve is stealing from children”; the latter being the tack a few people here have decided to run with.

          Note: I really don’t like the direction Valve has taken with their “crate gambling” and assorted crap. I wish they’d burn it all away.

      • RobbieTrout says:

        My guess is the media are using the same old tired equation that “video games” = “kiddie fun”. Hence anything connected to video gaming must be aimed at children, QED.

    • Haldurson says:

      Your statement is slanderous in its implications — there’s no evidence that Valve endorses gambling. The fact that they do, indirectly, benefit from it does not mean that this was part of some insidious plan. I chalk it up more to the law of unintended consequences.

      When there are two possibilities, and one involves incompetence, and the other involves really clever planning plus leaving oneself open to lawsuits or fines, I nearly always bet on incompetence.

      • Geebs says:

        I think you’re giving Valve too much credit. They have never exactly been quick to close loopholes that just-so-happen to make them money, even when it’s common knowledge or, at least, obvious to anybody not born yesterday, that they’re profiting from gamblers and whales, and selling stuff that will clearly never leave early access. It’s kind of like saying that cigarette companies never realised that bright colours and animal mascots on their packets might appeal to children.

        • syndrome says:

          exactly. +1

          “there’s no evidence that Valve endorses gambling.”

          Nobody said they’re (publicly) endorsing anything — why would they? — but here’s your (indirect) evidence:

          – They have designed the entire system, much like they design their games (read: it is very well designed).

          – From their game design and QA depts, we learn that Valve rarely (if ever) misses to observe anything that’s profit-related; they usually take their time making sure everything is just right on that front.

          – They had several actual RL economists on the team while they were iterating over the entire system once again.

          – They were aware of the possibilities much before the news appeared in the media.

          – The “how-to-do-it” has been essentially leaked from Valve, because this technical information is what generates economic value (the potential to be that “man in the middle” is too lucrative to ignore); if this loophole in API was known beforehand, there would be no value, just public criticism.

          – Many companies create such “holes” with an intention to cover them up (if they get too hot) by claiming it was done inadvertently; this is how people (and devils) manage software.

          – Valve is washing hands of it now, politically; however, although unsucessful in the long-run, this project has been class-A experiment on creating colorful but branched ecosystems, diverse if slightly wild revenue streams; essentially a small free-energy windpark for the typical large-scale coal-mining business.

          • Lachlan1 says:

            Also they were advertising to hire a psychologist not long before all of this crate business, and the like, started.

  2. RacerX says:

    I bet Valve gets slapped some more by The Man. Ooops, now I’m gonna get a cease and desist.

  3. Freud says:

    Who would have thought that Steam items that can easily be transferred and have monetary value would be used for underage gambling?

    Where is the faith?

  4. Drib says:

    Whoops, I used chopped up bits of paper as poker chips. I guess Washington better tell all the paper companies to stop making gambling paraphernalia.

    • Unclepauly says:

      It’s only allowed if G Man runs it. G man now runs the numbers, the scratchoffs, and the casinos(well, alot of them, not all). If you try to make a buck off gambling though, off to prison for you.

    • Emeraude says:

      How much money was swindled off people – minors at that – using your paraphernalia, in your own home?

      I’m thinking you and the paper companies are going to be fine.

      That constant painting of Valve as some neutral third party always weird me out in all those controversies, though. They’ve made, own and manage the market, they’re not some distant party whose toolset has been misappropriated and misused without knowledge nor consent, and who do not benefit from things happening.

    • Ofanite says:

      It’s a reasonable point. With physical goods, one can universally buy and sell them (even in the same store) and reasonably expect not to be held responsible for what other people do with them. Hell, it doesn’t have to be paper – I can sell and buy poker chips themselves if I want, and I can even buy at a different rate than I sell, and I can even sell chip sets used in actual gambling, and even mark them up as a direct result of that fact (say, if I wanted to sell the chips used in a poker championship as memorabilia). I can buy or sell from people who merely represent another anonymous patron or group of patrons (a “bot” in this context). I can take orders over the phone and mail them out, and I don’t have to do any background checks or take on extra overhead or responsibility as a result, because the good is not in and of itself regulated or restricted in any way and is legal everywhere I’m sending it.

      For some reason, when a good is virtual all this goes out the window, and even the act of having a store makes me responsible for the actions of all my patrons, because I call it an API instead of a store.

      I want this stuff to come to an end, but I’d like even more for it to be done in the right way because I work in tech and I don’t want shadow regulation to get slipped into the law without the proper process. This way of doing things is more akin to suing Google because I get spam in my Gmail account, and finding the spammers is too hard.

      • Emeraude says:

        The problem is that Valve isn’t the seller, it’s the platform – it’s the market creator and curator both.

        When a bank repeatedly allows transactions used by its clients to beak the law and turns a profit out of it, you understand that regulations need to happen, regardless of any ill intent, and that justice will demand proof that sufficient precautions were and are going to be taken to prevent it happening, do you not?

  5. welverin says:

    I don’t think a cease and desist letter fulfills the demand that they stop facilitating the gambling and taking every step necessary to stop it.

    • RvLeshrac says:

      The alternative is that they no longer allow trading or selling of ANY inventory items, which both harms developers using Steam Inventory for their games, and also means no more gifting games.

      • Aeroren says:

        Or, you know, block these sites from using their API. If they know who to send the cease and desist letters to, surely they know what API accounts they use.

  6. gwop_the_derailer says:

    Looks like the invisible hand of capitalism will have to play the hand it has been dealt.

  7. Gordon Shock says:

    Yes, Valve, with it’s measly 400 employees, are out to control the world by steering the economy their way by creating ingenious and yet insidious tools that will ensnare and enslaved the whole world.

    Come om people, Occam’s razor please.

  8. notrobbie says:

    plz don’t call the region cascadia.

    it’s an annoying term used by weird separatists in the area or by recent transplants way to pleased with where their new home is.

    it’s like calling san francisco ‘frisco. :/

    (it doesn’t matter at all)

  9. Premium User Badge

    Nauallis says:

    At least Valve actually has skin in the game.

  10. PseudoKnight says:

    Can someone explain to me how spending real money on a crate key on the chance that it will give you a virtual item worth hundreds of dollars ISN’T gambling? They built rarity and a marketplace right into the system.

    • AngoraFish says:

      Drop pennies in the slot (buy a key) for a tiny chance at winning something (ultra rare item) that can be sold for a large amount of real cash (via the Steam market). It’s a classic slot machine that absolutely does normalise gambling to children. Why everyone is focusing on a trivial side market to the main game is the real mystery here.

      • Neoony says:

        I think the “excuse” is, that you can never pull the real money out of it (at least not legally I guess). You can only buy more virtual items, or more games/stuff from steam.

        • jrodman says:

          I don’t think Valve forbids real money trade, do they?

          Regardless of my accuracy, there’s many ways to sell your items, but the funds you get selling directly using Valve’s tools are all steam-credit.

  11. criskywalker says:

    Instead of being fooling around with CS skins they should be making Half-Life 3 instead!

  12. Banks says:

    Valve is a mess.

    • behrooz says:

      …a mess that has literally made Valve’s stakeholders several billion dollars, courtesy of Steam’s runaway success.

      By a conservative estimate, Valve is bigger than huge publishers like Ubisoft, or Take-Two. It’s not out of the question that Valve will be bigger than EA in the near future.

      Can’t say I’m surprised that they don’t have a lot of interest in the little stuff anymore.

  13. Isendur says:

    I bet the G-man was just pissed that no Half -Life 3 is even announced and wanted to pressure Valve into doing something about it. Good Guy G-man.

  14. Neutrino says:

    I don’t see how Valve is any more complicit in facilitating gambling by creating a game with items that have worth, than the government is by creating money in the first place.

    It’s just the state’s natural inclination to ruin everyone’s fun.

  15. jrodman says:

    The article linked by “fixed big wins” does not mention rigged or fixed results that I can find. Is there another article?

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