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.