Tis the season for taking Steam to court, apparently. A new class action lawsuit has been filed in Washington, USA accusing Valve of running an unlawful gambling operation through lootbox mechanics in Counter-Strike 2, Counter-Strike: Global Offensive, Dota 2, and Team Fortress 2.
Acting specifically on behalf of two individuals, Alexander Flauto and Jackson Meyer, but with extension to affected consumers at large, legal firm Hagens Berman are seeking “full disgorgement and restitution” of the billions of dollars they say Valve have illicitly made from gambling.
Published yesterday, 9th March, the full 32-page text of the complaint will make familiar reading, if you’ve been keeping up with Valve and their trade in lootbox keys for crates of Counter-Strike cosmetics – or if you have any familiarity with the wider, decade-old practice of selling randomised rewards in games that range from FC Ultimate Team to Overwatch.
In brief, the plaintiffs argue that lootbox mechanics in the Valve games above are gambling because you’re spending real money by means of a manipulative, casino-style interface (think, spinny wheels) for a chance of unlocking something that has ‘real’ value. In this case, not just because the digital item has subjective importance to the owner, but because you can flog it for actual cash either over Steam Community Market, or on third-party marketplaces using a “trade URL”.
Here’s an excerpt from the text.
Loot boxes use the same psychological techniques as casino games — rewards delivered on unpredictable schedules to keep players spending, visual and audio effects designed to mimic the excitement of a slot machine, ‘near miss’ animations that create the illusion of almost winning, and around-the-clock availability. These techniques are particularly dangerous for children and adolescents, who make up a significant portion of Valve’s player base and who are especially vulnerable to developing gambling habits.
The lawyers claim that since Valve are headquartered in Washington, they are subject to Washington’s laws around gambling, which define it as “staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person’s control or influence.”
The plaintiffs contend that Valve’s lootboxes are not “incidental features” but “a deliberate, carefully engineered revenue model”, with Valve earning “billions” of dollars both from direct purchase of keys and from commissions on item trades over the Steam marketplace. With regard to third-party marketplaces, they accuse Valve of “publicly claiming that its terms of service prohibit the off-platform sale of virtual items for cash while simultaneously facilitating and profiting from the existence of cash marketplaces”.
They also argue that “the gambling nature of Valve’s loot boxes is visible in the culture that has grown up around them”, pointing to the many streamers who have built an audience by filming themselves opening lootboxes. For context, watching streams of people using casino machines has been described by researchers as “interpassive gambling”, because it habituates you to gambling mechanics even if you’re not yourself physically pushing coins into slots.
There’s a section in the lawsuit on gambling disorder, which cites a 2018 study linking lootboxes to problem gambling, and reiterates that children are especially susceptible to gambling mechanics that are not explicitly presented as such. The plaintiffs note that there is no real age verification or parental consent process for buying lootboxes in the Valve games discussed, save ticking a checkbox to indicate that you’re 13 or older.
All this follows hard on the heels of a similar lawsuit brought by New York’s attorney general in February. That lawsuit sought to issue fines, “permanently stop Valve from promoting gambling features in its games”, and “disgorge all ill-gotten gains”.
Lootbox barons have met with growing legal pushback in countries outside the US. In July 2022, the UK government threatened legislation unless publishers took steps to keep lootboxes out of the hands of children. In January 2023, the EU voted to take action against loot boxes and gold farming, among other practices. That July, Australia’s government proposed new age ratings for games with lootboxes, while UK industry lobby Ukie published 11 principles for lootbox implementation, including restricting access by under-18 players. In 2024, the UK’s Advertising Standards Authority castigated mobile game companies for failing to disclose the presence of lootboxes. The ASA issued a new enforcement notice about lootboxes to the sector this February.
I’m not sure how much of a dent this has made on the likes of Valve, who are insulated from legal redress by Steam’s sheer scale and popularity among vidyagamerz at large, but there are a few signs of compromise with regulators.
As PCGamer report, the German version of Counter-Strike 2 now has an “X-ray scanner” that lets you peer inside a lootbox – i.e. see the result of the random number calculation before you commit to unlocking. This arguably only mitigates the lure of lootboxing, however. As per Valve’s FAQ, “once a container has been scanned and the item has been revealed, the only way to scan another container is to purchase and claim the previously revealed item.”
