Following recent news the state of New York is suing Valve over its implementation of loot boxes – which New York attorney general Letitia James has described as “illegal gambling” – the Steam owner has shared a lengthy public statement, saying it is “disappointed” at the decision and doesn’t believe the “mystery boxes” in its games violate the state’s gambling laws.
In its statement, Valve says it first heard from the New York attorney general regarding its virtual items and mystery boxes (as seen in the likes of Counter Strike 2 and Dota 2) in early 2023, and that, in response, it noted such boxes were “widely used, not just in video games but in the tangible world as well, where generations have grown up opening baseball card packs and blind boxes and bags, and then trading and selling the items they receive.”
“On the physical side,” Valve elaborates, “popular products used in this way include baseball cards, Pokémon, Magic the Gathering, and Labubu. In the game space, digital packs similar to our boxes date back to 2004 and are in widespread use. Players don’t have to open mystery boxes to play Valve games. In fact, most of you don’t open any boxes at all and just play the games – because the items in the boxes are purely cosmetic, there is no disadvantage to a player not spending money.”
Valve says that during the New York attorney general’s investigation, it highlighted its efforts “to shut down accounts found to be using Valve game items on gambling sites in violation of the Steam Subscriber Agreement”, as well as its “efforts to combat fraud and theft of users’ items”, and what it calls its “extraordinary measures” to stop gambling sites from taking advantage of Steam accounts and Valve game items.
“Valve does not cooperate with gambling sites,” it continues. “To date we’ve locked over 1m Steam accounts that were being misused by third parties in connection with gambling, fraud, and theft. We’ve also shipped features (like trade reversal and trade cooldown) to discourage gambling sites’ ability to operate and protect Steam users from fraud. And we forbid any gambling-related business to participate in or sponsor tournaments for our games.”
Valve adds that it has “serious concerns with many of the alterations the NYAG claims are necessary to make to [its] games”, including making its loot boxes and their contents non-transferable. “They appear to assume digital mystery boxes and items in our games are different from tangible items like baseball card packs (which contain random cards),” Valve continues, “and… take issue with the fact that users have the ability to transfer the items they receive through Steam Trading or user-to-user sales on the Community Market.” Valve argues the ability to transfer digital game items is “good for consumers”, and compares the system to the way “an owner can sell or trade a tangible item like a Pokémon or baseball card.” It adds that “transferability is a right we believe should not be taken away, and we refuse to do that.”
“The NYAG also proposed to gather additional information (beyond what we normally collect in the course of processing payments) about each game user on the off-chance someone in New York was anonymising their location to appear outside of New York,” Valve continues, “such as by using a VPN.” This, it claims, would involve “implementing invasive technologies for every user worldwide”. It also says the “NYAG demanded that Valve collect more personal data about [its] users to do additional age verification – even though most payment methods used by New York Steam users already have age verification built-in… Valve knows our users care about the security of their personal information, and we believe it’s in our and their interest to only collect the information necessary to operate the business and comply with law.”
Valve says it “will of course comply if the New York legislature passes laws governing mystery boxes”, adding, “Such laws would be the result of a public process, presumably with input from the industry and New York gamers.” It also claims the “commitments the NYAG demanded from Valve went far beyond what existing New York law requires and even beyond New York itself”, and that while it “may have been easier and cheaper for Valve to make a deal with the NYAG, [it] believed the type of deal that would satisfy the NYAG would have been bad for users and other game developers, and impacted our ability to innovate in game design.”
“Ultimately, a court will decide whose position – ours or NYAG’s – is correct,” Valve concludes. “In the meantime, we wanted to make sure you were aware of the potential impact to users in New York and elsewhere.” Valve’s full statement can be found on Steam. And if you’re curious to learn more about New York’s lawsuit – and the likelihood of its success – Eurogamer’s Connor Makar recently spoke with a specialist lawyer to get his perspective.
