Valve Respond To State’s Skin Gambling Complaint

The Man recently told Valve to stamp out online gambling which uses virtual Steam items – Counter-Strike gun skins and the like – as chips. The Washington State Gambling Commission gave Valve until October 14th, under threat of legal action, to stop these gambling sites and report back explaining their compliance with Washington State’s gambling laws and Valve have replied, er, several days late. Valve say that they’re doing all they reasonably can, short of cutting off important Steam services for everyone.

Skin gambling, to briefly recap, is sites using virtuaitems like CS:GO gun skins and Dota 2 wizard hats as chips for gambling games like raffles, roulette, and betting on matches. You bet gun skins to win gun skins, which can be worth vast amounts of money through Steam’s weird skin economy. Valve doesn’t run these sites and the Steam user agreement forbids them, but cheeky gamblords do run them using Steam’s authentication system and running trading bots to cash items in and out. This skin gambling has been going on for years but recently got a whole lot of negative attention through self-promotion scandals with YouTubers running sites as well as lawsuits against Valve.

The Gambling Commission in Valve’s home state were worried about this form of unlicensed – and potentially underage – gambling, so they asked them to shut it all down then get back to them. Valve sent their response on Monday, and shared it with sites including TechRaptor. Valve point out that they’ve sent cease and desist letters to sites they identified and shut down their bot accounts, but keeping up with new ones could be an impossible task.

“However, we do not know all the skin gambling sites that may exist or may be newly created, and we are not always able to identify the ‘bot’ accounts that particular skin gambling sites may use to effectuate Steam trades. Cleverly designed bots can be indistinguishable from real users performing legitimate trades and their methods and techniques are constantly evolving. A bot account that is blocked can easily be recreated with a new identity almost immediately.”

Valve explain that they can’t shut down the ways this all connects with Steam, as the systems are mighty useful and aren’t illegal in themselves.

“The Commission’s main argument seems to be ‘Valve could stop this, so it should.’ We do not want to turn off the Steam services, described above, that skin gambling sites have taken advantage of. In-game items, Steam trading, and OpenID have substantial benefits for Steam customers and Steam game-making partners. We do not believe it is the Commission’s intention, nor is it within the Commission’s authority, to turn off lawful commercial and communication services that are not directed to gambling in Washington.”

Valve say they’d be happy to cooperate with the Commission if it can identify skin gambling sites still running and the bot accounts they use but beyond that, er, they’re not really sure what the Commission’s on about.

“We welcome the chance for further communication with the Commission, if it would like to clarify the legal allegations against Valve, or alternatively to work with Valve to identify offending Steam accounts of gambling sites.”

There are a whole load of laws still catching up with the Internet – “the cyber”, I believe it’s called nowadays – so it’ll be fascinating/potentially awful to see how this pans out.

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  1. JFS says:

    Yeah, it’s “Neuland” for all of us, innit.

  2. Orillion says:

    If these trade bots are just new accounts made (possibly automatically) I don’t see why they couldn’t just disable trading for Steam accounts owning less than some arbitrary amount of Steam merchandise. Surely if you have to spend $5 every time you make one of these mules (and delete the accounts as they’re caught), it’ll start to cut into profits eventually.

    But of course that would require actually having a hands-on approach in this, and a hands-on approach is something Valve will spend any amount of time and money to avoid.

  3. Premium User Badge

    distantlurker says:

    I know it’s not really on topic but fab nails are fab.

  4. ButteringSundays says:

    “short of cutting off important Steam services for everyone.”

    Is the set of features enabling the ability to trade in-game cosmetic items for currency an ‘important Steam service for everyone’?

    Valve could stop the practice in a heartbeat – but they make too much money off of the commoditisation of un-lockable items; so they won’t. This has got nothing to do with important services, or users.

    I know this is the response to a legal letter and so it needs to take a certain format and tone – but it’s still bullshit. “We can’t do what you asked because we’d make a bit less money” doesn’t have the same ring to it, ay.

    • C0llic says:

      I’ve always been a big fan of Valve but you’re essentially right. They make absurd amounts of coin through game item trading, and if they were to stop that, the problem would disappear. It is within their control, but they aren’t about to shut down such a huge economy that directly benefits them.

      At least they are trying to actively police this. Something they should have done a long time ago.

    • montorsi says:

      I can’t say I’d take too kindly to a commission telling me to shut down my services because some third parties, who I have actively targeted for termination of those services, is using them for gambling outside of my domain. I’m not sure what kind of idiots are on this commission but the fact they got a response is more than they deserved.

      But yes, we all do love a good “I don’t use these features so they don’t matter” argument.

      • ButteringSundays says:

        Which is neither here nor there.

        If Valve had responded as such, ‘this is bogus, fu’ then so be it, IANAL. But they didn’t, they said ‘we did everything we could, the only alternative that remains is removing an important service for everyone’. Which is horseshit.

      • Daemoroth says:

        “who I have actively targeted for termination of those services”. You mean the gambling sites that have been operating unharmed for YEARS until finally it caught a spotlight and SUDDENLY Valve is all “we’re taking them down!”.

        Valve didn’t lift a finger while it was making them tons of money quietly, trying to suddenly state that they’re against the practice (And having people believe them) is just hilarious.

    • Premium User Badge

      johannsebastianbach says:

      I for one own CSGO skins and do occasionally buy new ones on the Steam market (opening cases obviously isn’t the way to go). I’m sad to hear that you decided no one cares about this service. But I’m sure I’ll be better off when Valve doesn’t make money off the market in the future and thus shuts down its own CSGO servers which are free for everyone. This is definitely in my best interest, as you pointed out. So thanks again for your advise.

      • Premium User Badge

        subdog says:

        The alternative is that these features get completely shut down by a legal system that doesn’t give two shits about your ability to buy and sell skins legitimately if that’s also enabling illegal gambling.

    • Cantisque says:

      Gamblers cash out via Paypal. Steam doesn’t offer any way of getting money out of items, other than store credit. Valve should not have to disable item trading outright just because people have chosen to use skins as poker chips.
      Alternatively, they should be preventing item trading for limited accounts (those who haven’t spent $5 or more) and those that don’t actually own the game.

    • FunnyCop says:

      “Valve doesn’t run these sites and the Steam user agreement forbids them, but cheeky gamblords do run them using Steam’s authentication system and running trading bots to cash items in and out.”

      I don’t think you’re quite understanding the article.

      Legally, Valve is not obligated to shut down any service that is being used maliciously beyond their consent (this is also why tobacco shops can sell items that are commonly used for illicit drugs).

      These bots use Steam’s authentication system which allows users to gift/trade in-game items and games in a secure manner. It also is used for achievements, trading cards, steam cloud, and leaderboards (link to

      Valve is doing what they are legally and morally required to do.

      “Valve point out that they’ve sent cease and desist letters to sites they identified and shut down their bot accounts, but keeping up with new ones could be an impossible task.”

      As Burges already pointed out, Valve has already implemented a system to help prevent brand-spanking-new accounts from trading and such so creating a trading bot requires a little bit of cash.

      Doing anything further would make it quite difficult for new and legitimate customers from accessing their services as well as possibly creating a moral issue of “when do we invade our clients’ privacy?”

      The State of Washington has no legal ground to prosecute Valve.

    • Blackcompany says:

      There is NO reason Valve should have to be culpable, legally or morally, for the behavior of others. Valve are neither supporting gambling, nor directly enabling it. Those using otherwise legit systems in an abusive or legally questionable manner are at fault here, not Valve.

      But sure. Let’s force Valve to stop providing a service because someone in our mostly misguided, outdated government doesn’t like how some people use it. Can you even conceive of the legal precedent this establishes? It’s…Orwellian, and terrifying.

      No. For once, let’s actually make individuals accountable for their OWN behavior. Instead of mindlessly blaming corporations and profits for the world’s every evil while pretending our bloated, inefficient, know it all government is some sort of morally upstanding savior.

      • Yugie says:

        By that logic, banks shouldn’t have to check if large sums of money they take in/ transfer was involved in illegal activity or laundered. Keep in mind that I’m not arguing that Valve has broken any laws here, just that it might be reasonable to expect them to take on the burden of regulating/acting with due dilligence(and in fact, they seem to have been taking positive steps in that direction, though maybe not as many as some people would like)

        Here’s a few reasons why it might be more suitable for Valve to be the one watching these issues:
        1) They are making a boatload of profit off the item trading systems which they implemented, giving rise to the issue in the first place.
        2) Unlike most physical goods, they have full control over the goods even while the users ‘own’ it. they know where the skins are at and can revoke it at any time.
        3)They are the gatekeepers of account system, they have the power to revoke the accounts which are engaged in gambling. They can also set limits to what accounts have the ability to trade, so like people mentioned above, Valve could implement minimum spend before trades are allowed, making it harder/more expensive for bots to be created.

        • Jaunty says:

          It’s not actually like that, because you’ve immediately and directly equated the transfer of small sums of money to the transfer of large sums of money. You appear to be arguing that, because banks have some interest in requiring more information for transfers of very large sums of money, everyone should exercise the same or similar levels of prudence for ALL transactions. Not only is this unrealistic, it’s unfair. In fact, since money cannot be withdrawn from steam accounts/steam wallets, the argument is being made that the banks level of interest in transfers of very large sums of money be legally required by anyone responsible for the sale or exchange of any transferable good of any value. The implications of that are huge and I absolutely do not agree with them.

          • Yugie says:

            Maybe I wasn’t clear about this earlier on, but I don’t expect or Valve to check every single transaction. But there are steps they can take which would be proportionate, and not stretch their resources.(we’ve already seen them take some of these steps in sending the cease and desist letters to gambling sites)

            Saying they have absolutely no responsibility at all is strange given that Valve themselves have seemingly acknowledged that some steps might have to be taken on their part.

            I do not expect or want Valve to have to exercise a similair degree of care as banks do, but that doesn’t mean they should have nor responsibility at all .

    • Phasma Felis says:

      Yeah, I’m torn, because effectively illegalizing the monetization of cosmetics would be a shocking, totalitarian government overstep and would absolutely make gaming so much better, you guys. One step back towards a world where the first consideration in making a game successful is actually making it fun.

      Do I root for the bad guys if they’re doing good things by accident? I just don’t know.

      • P.Funk says:

        I’m no fan of the DLC bonanza we have these days but honestly its pretty short sighted to think that cutting off a significant cashflow is going to improve gaming.

        Valve doesn’t just create games, it creates a big system. Its a system that actually benefits a lot of developers, with things like them being able to just give endless keys for free to users if they want with valve just shrugging their shoulders at the burden on the steam system.

        Lets not be naive that blowing up Valve’s business model would be good for everyone. That’s just a plea to emotion.

      • Famethrowa says:

        Do you think it’s coincidence that while cashflow for these companies has increased, so has the output of seriously good games?

        This is the golden age of video games, and microtransactions are enabling it.

  5. Drib says:

    I still say this is a bit like suing the US Mint to stop making money, as people use money to gamble.

  6. DeadCanDance says:

    Or they could, you know, shut down accounts belonging to users that do use these gambling sites, as per user’s agreement.

    • minijedimaster says:

      yes, because its so hard to just create another account and continue on. Many people who do this probably already do so under a secondary acct anyway. And the ones who don’t, would start if valve started doing this.

  7. Razor2143 says:

    I think you missed out at analyzing what kind of language Valve used in the letter.

    Valve took quite an aggressive stance and publicly released it’s letter to show that they aren’t even intimidated by the accusations which were made.

  8. Unsheep says:

    Sounds reasonable. Valve is the only platform where you can play these games, so they do have some responsibility in this.

    • Blackcompany says:

      Actually…no. Valve are in no way responsible for the illicit behavior of others. At all.

      Valve did not choose for these people to gamble. Or abusive legitimate systems. Or misuse products Valve make. None of that is Valve’s responsibility at all.

      • Regicider 12.4% says:

        They will eventually be forced to do more to regulate their marketplace.

        It’s a lacking comparison but physical banking and finance services are required to look for any suspicious signs of money laundry and tax evasion and question/report/prevent no matter the individual sums. Excuses like just shutting offender accounts and keeping the money doesn’t fly.

        The recent trend of nosing around proprietary closed marketplaces and virtual currencies like Bitcoin (already illegal in some countries) is because slow governments now see a large enough flow of value between the physical and virtual and they want regulation.

        They poke around with existing laws, mostly untested for the virtual space and I bet they’re just dying to get them tested. And it’s government agencies, not money-suit boys and they want precedents, not a settlement outside court.
        If that doesn’t work they will eventually take it to the top and just adapt the laws.

        Death and Taxes.

  9. Monggerel says:

    C: Volvo stop

    V: come at me bruv

    C. please

    V: hey everyone this bruv wanna come at me

  10. ButteringSundays says:

    It’s interesting that both you and @mortorsi read my statement to mean this, I certainly didn’t say it.

    Between ‘important service for everyone’ and ‘doesn’t matter at all’ is a big space that is occupied by options such as ‘important service for some’ and ‘I use it myself, but important?’.

    Why does the internet always need to operate in extremes?

  11. Premium User Badge

    phuzz says:

    CCP just updated the terms of service for Eve, to ban external gambling sites. Some people are wondering if these legal problems Valve are having.
    (The other suggestion is that it’s all down to TheMittani)

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