The lawsuit alleges that, in total, Valve has made billions of dollars by “luring” users to gamble on expensive digital items.
New York Attorney General Letitia James has filed a lawsuit against the Valve Corporation, claiming that the popular gaming platform illegally promotes gambling to children and teenagers.
In a press release, James’s office said that Valve, the owner of Steam and the publisher of several independent titles, enables gambling by “enticing users to pay for the chance to win a rare virtual item of significant monetary value.” The lawsuit provides the example of a game in which the process involves spinning an animated wheel that will eventually come to rest on a selected item. These items have no offline functionality and cannot typically be used in video games, but they are often traded for real-world money.
The lawsuit alleges that, in total, Valve has made billions of dollars by “luring” users to gamble on expensive digital items.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” James said. “Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes. These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers.”
James’s office has characterized most of the rewards offered by Valve as “loot boxes.”
In gaming, the term “loot box” refers to a digital box that, when opened, provides the user with a set of randomly selected awards. Loot boxes often contain “skins,” like items of clothing for an avatar or an in-game character. Most loot boxes provide no competitive advantage and are purely cosmetic. Gamers have long criticized the “loot box system,” with a relatively small number of consumers, termed “whales,” responsible for a disproportionate share of purchases and transactions.
“Like slot machines, the prizes won from loot boxes are determined randomly in accordance with odds set by the casino, which in this case is Valve,” James’s office said. “Valve intentionally makes some items far harder to win than others, making the rare items more valuable. Despite having no in-game functionality, these virtual items can be extremely valuable, with the rarest items selling for thousands of dollars online.”
James’s office notes that some loot box rewards carry high real-world price tags: one Counter-Strike skin for an in-game weapon reportedly sold for more than $1 million in June 2024. As of March 2025, it was reported that the market for Counter-Strike skins alone had surpassed $4.3 million.
“Valve’s loot box model can be especially harmful to children. Attorney General James asserts that young users with limited funds can be enticed to start gambling through loot boxes in the hopes of obtaining a virtual item that they believe will enhance their status in the games’ virtual worlds,” James’s office said. “Research has shown that children who are introduced to gambling are four times more likely to develop a gambling problem later in life than those who are not. In addition, although this case is about illegal gambling, it is important to note that Valve’s promotion of games that glorify violence and guns helps fuel the dangerous epidemic of gun violence, particularly among young gamers who can become numbed to grave violence before their brains are fully developed.”
Sources
Attorney General James Sues Game Developer for Promoting Illegal Gambling Through Video Games
New York sues video game developer Valve, says its ‘loot boxes’ are gambling
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