New York State Attorney General Letitia James has filed a lawsuit against game developer Valve for promoting illegal gambling through video games that are popular with children and teenagers.

Several Valve video game franchises, including Counter-Strike 2, Team Fortress 2, and Dota 2, encourage players to pay to win virtual items of significant monetary value.

The process resembles a slot machine, with an animated spinning wheel that eventually stops on a selected virtual item. The randomly selected item has no in-game functionality, but can be sold online for real money. For example, an AK-47 with a Counter-Strike skin allegedly sold for more than $1 million in June 2024.

The lawsuit alleges that Valve has made “billions of dollars” selling these so-called loot boxes to teenagers, essentially inciting them to gamble to win valuable virtual prizes.

“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,” the indictment reads,

According to Attorney General James, Valve’s loot box model is harmful and can lead to serious addiction problems, especially to children. Studies have shown that children who are introduced to gambling at a young age are four times more likely to develop a gambling problem later in life than those who are not.

“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,” she said in a statement.

With this lawsuit, the Attorney General seeks to permanently stop Valve from promoting gambling features in its games, disgorge all ill-gotten gains, and pay fines for violating New York’s laws.

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