Counter-Strike 2, Dota 2, and Team Fortress 2 named in Valve loot box lawsuit

'Valve's loot boxes are particularly pernicious,' the suit claims

New York state's Attorney General Letitia James is suing Valve over its loot boxes, which she described as "quintessential gambling" in a complaint filed in a Manhattan state court on Wednesday (via Reuters). "Valve's loot boxes are particularly pernicious because they are popular among children and adolescents," the complaint reads.

James specifically takes issue with Valve's sale of "keys" to open loot boxes. These keys are mainly found in games like Counter-Strike 2, Dota 2, and Team Fortress 2. All three games are cited in the complaint, which can be read in full here. One section of the complaint is titled, "Valve's Loot Boxes Pose the Same Dangers as Casino Gambling, Especially for Children."

James also takes issue with Valve allowing players to sell unwanted loot box items for real-life currency via in-game marketplaces, the Steam Community Market, and third-party marketplaces.

"Virtual items that are bought and sold through these marketplaces have monetary value," the complaint states. "Indeed, the market for virtual items for the Counter-Strike franchise alone has been estimated to be in the billions of dollars, an unparalleled sum in the video game industry."

"Nearly every user who buys a key and opens a loot box receives a virtual item that is commonplace and worth only pennies — far less than what they spent to open the loot box," the complaint continues. "Anyone who actually wanted such an item could obtain it far more cheaply — again, for pennies — by simply purchasing it through a marketplace. Most people, therefore, purchase a key and open a loot box for the same reason people play the lottery or a slot machine — the potential of winning a large prize. This loot box model that Valve has developed — charging an individual for a chance to win something of value based on luck alone — is quintessential gambling, prohibited under New York’s Constitution and Penal Law."

James also has a bone to pick with the slot machine-esque visuals that accompany the opening of a Counter-Strike 2 loot box. "Valve designed the experience of opening a case to appear similar to the spin of a slot machine," the suit reads. "The spinning wheel graphic, like a slot machine, also keeps users spending money by periodically creating the illusion that the user “almost” won when the wheel comes to rest on an item that is immediately adjacent to a rare, valuable item. As mentioned above, this feature is referred to as a 'near miss'."

The complaint highlights the dangers of exposing young children to gambling and notes that young children make up a significant portion of the player base for many of Valve's games. "Over half of the 22 players on the top five Counter-Strike esports academy teams are 18 years old or younger, and the youngest member is just 14 years old," the 52-page complaint reads in part.

James claims that Valve is breaking several laws "by unlawfully accepting bets from members of the public as a business, upon the outcome of future contingent events."

"As alleged above, Valve has designed and developed software that enables any member of the public to purchase and use keys in exchange for the opportunity to activate a loot box and win a virtual item, the identity of which is determined entirely by chance," page 47 of the complaint reads. "Valve has repeatedly received and accepted in one day more than five bets totaling more than $5,000."

James' filing also criticizes Valve for not implementing more robust age-verification measures for its users.

This is far from the first time a game developer or publisher has faced legal troubles over loot boxes, but these lawsuits rarely go anywhere. In late January, the Austrian Supreme Court ruled that loot boxes fall outside the jurisdiction of the country's traditional gambling laws. Back in July 2022, the UK released a report with a similar statement, saying that it had no plans to amend gambling laws to include loot boxes. Belgium has banned loot boxes since 2018, but a 2022 study found that the law is rarely enforced.

Valve has yet to publicly comment on the lawsuit, and James' complaint notes that the filing has not yet been reviewed by the county clerk.