Valve fights New York lawsuit over loot boxes in Counter-Strike 2

Valve has decided to challenge a lawsuit filed by the New York attorney general. The suit claims that loot boxes in games like Counter-Strike 2 encourage illegal gambling and can therefore be harmful to children. Attorney General Letitia James accuses Valve of making “billions of dollars by allowing children and adults to illegally gamble for the chance to win valuable virtual prizes.” She calls loot boxes “addictive and harmful.”

Treating loot boxes as gambling

Valve argues that labeling loot boxes as illegal gambling would create a slippery slope. It would mean that other everyday transactions, such as buying baseball cards or getting surprise toys from a Happy Meal, could also be considered gambling. Valve says: “Each of those transactions — and many more like them — involves the purchase of randomized items that can be resold for money. No court has ever allowed the executive branch to criminalize such a breathtaking number of ordinary acts without them being specifically prohibited by law.”

Criticism of the lawsuit

In its defense, Valve emphasizes the social acceptance of these kinds of transactions. “People enjoy surprises,” Valve says, adding that many popular collectibles, from baseball cards to cereal boxes, are appealing precisely because they might contain a rare item. Valve stresses that no lawmaker or court has ever classified these activities as illegal gambling.

Impact on users

Valve also points to the consequences for users if the attorney general’s actions succeed. “The NYAG proposes to deprive users of the ability to transfer their digital items from Valve games. Transferability is a right we believe should not be taken away, and we refuse to do so,” Valve said in its statement.

It also notes that many players do not open loot boxes in order to play. “Players do not need to open mystery boxes to play our games. In fact, most of you do not open any boxes at all and simply play the games — because the items in the boxes are purely cosmetic, there is no downside for a player who does not spend money.”

Recommendations for regulation

Valve has stressed its willingness to work with New York authorities. “We respect New York’s right to determine the laws governing conduct in the state. Of course, we will comply if the New York legislature enacts laws regarding mystery boxes — something that has not happened so far, despite the issue being considered multiple times.”

The New York attorney general is seeking damages equal to three times the amount Valve earned from its loot box activity. The Counter-Strike loot box market is estimated at around $4 billion. If the NYAG succeeds, Valve could be restricted from selling loot boxes to New York residents.