With Valve cracking down on sites which use Counter-Strike: Global Offensive and Dota 2 cosmetic skins and items for gambling, two major sites have announced they plan to continue by going legit. Ish. CSGOLounge and Dota2Lounge say they've decided to get a license to run esports betting legally, though they're still insistent that they don't need one. As ever, is an issue of whether gambling with skins as currency properly counts. The sites are also blocking bets from countries which don't allow betting on esports, which include the USA and our own green and pleasant land.
To recap! Sites like CSGOLounge let people bet their skins and items (paintjobs and hats, basically) on matches to win more skins. They connect through legitimate Steam channels with trading bots to take and give items. That's not real-money gambling, right? No one gives CSGOLounge money, and CSGOLounge don't give any money as prizes. Here's what it gets tricky. These items do have a value within the Steam economy, as users can buy items with real money and sell them in return for Steam credit. Making it thornier is the fact that items can be sold for real money - sometimes even thousands of dollars - through back channels outside Steam.
This complicated situation has lead to lawsuits being filed against Valve, claiming that they were enabling illegal and underage gambling - these sites usually didn't verify anyone's age. The pressure of that combined with several scandals over YouTubers making videos promoting sites without disclosing they were paid to - or, worse, secretly that they run - mean Valve finally stepped in. Sites like CSGOLounge have been running for years, but in July Valve started sending legal letters telling them to knock off their unlicensed "commercial use of Steam accounts".
This week, the Loungefolk posted a notice detailing their response to Valve's letters.
They explain that they've always thought of their sites as "an entertainment service for the esports community", saying "we have never considered it as a real money betting". They continue, "Virtual items in CS:GO and Dota2 have no monetary value and any community interaction with the virtual items is meant only for entertainment, without any profit interest." At best, that's naively skirting around the issue.
The Loungeletter continues:
"After all the recent events around virtual items and the official letter by Valve, which we have received as well, we were left out alone without any additional information or communication by Valve on this matter. We had to make a decision on how to proceed with Lounges as community place and entertainment service. The situation is highly confusing - we are not offering games of luck, we are not offering any transactions with real money or equivalents. Despite those facts, in order to avoid or reduce the confusion, we have decided to acquire a license to legally operate in most of the countries and be able to accept the esports bets by our community, as if it would be real money."
"We will be operating according to the new terms and any transactions related to the items betting functionality will be handled accordingly to the new terms of service, and only on the territories, which do not forbid it by law."
It doesn't sound like they have licenses yet, but for now they're blocking betting in countries where it is forbidden. The current list is: Belgium, France, French Guiana, Guernsey, Gibraltar, Ireland, Isle of Man, Jersey, Martinique, French Polynesia, Reunion, Mayotte, Turkey, Spain, Scotland, Israel, the United Kingdom, and the United States. Users in these places will be able to withdraw their earlier winnings and deposits but not bet any more.
The Loungers add that they can't guarantee what'll happen to people's items but obviously this whole thing has been risky from the start and you've known that, right? It's not even clear that these changes will be enough to bring the sites into line with Valve's demands.
They don't plan any changes to the trading sides of CSGOLounge and Dota2Lounge, which help people find partners for swapsies. They're still available worldwide.