New York Sues Valve Over Loot Boxes

The Attorney General of the US state of New York is suing Valve over the use of loot boxes. The loot boxes in Valve's games “Counter-Strike 2,” “Dota 2,” and “Team Fortress 2” also expose young people to illegal gambling, Attorney General Letitia James explained the lawsuit in a statement.

Loot boxes are a common form of monetization in video games: virtual packages whose random contents are unknown before purchase. In Valve games, they primarily contain cosmetic items for game characters or weapons. Valve has earned billions from this, often enticing underage users to gamble, argues James in the lawsuit before the Supreme Court of New York.

“These features are addictive, harmful, and illegal,” Attorney General James is quoted as saying in a press release. She is calling for a ban on Valve's loot box mechanics, refunds for affected players, and substantial fines.

Sale of Items Possible

Loot boxes are found in countless online games, including the “FIFA” or “EA FC” games, where they contain soccer players for online teams. However, Valve's games are a special case because the items obtained through loot boxes can be resold for Steam credit. Valve offers a marketplace directly through Steam for this. However, there are also unofficial “black markets” where items can be cashed in. Particularly rare items can be sold for several hundred thousand US dollars.

This circumstance could also become explosive in Germany. In this country, loot boxes are generally not considered “real gambling” only because the items purchased through loot boxes usually have no real-world value. Instead, they are declared as “simulated gambling.” There are currently no regulations for the use of loot boxes in video games in Germany. However, the USK can consider loot boxes when classifying video games by age and issue warnings about their use.

In the case of “Counter-Strike 2” in particular, the New York Attorney General's office sees a clear connection to classic gambling: opening loot boxes is simulated like a slot machine with a spinning wheel of fortune.

Early Confrontation with Gambling

James is particularly critical that Valve also sells its loot boxes to children. According to James, buyers of loot boxes often want to improve their status in the community with the cosmetic items they acquire. Young people are particularly susceptible to this. Furthermore, research has shown that children who are exposed to gambling mechanics early on are more likely to develop gambling addiction later in life. A study published in 2018, for example, shows that loot boxes are comparable to gambling and can function as an entry point to other forms of gambling.

“Team Fortress 2” and “Counter-Strike” are rated 17+ by the ESRB in the USA; “Dota 2” has not been rated. Gambling is permitted from the age of 18 in New York. Valve has not yet commented on the lawsuit.

In the USA, loot boxes have so far existed in a legal gray area. Class action lawsuits against game companies like EA have mostly failed because virtual winnings could not be converted into real money.

(dahe)