In a rare move, Valve responded to the New York Attorney General’s recent lawsuit against the company. The lawsuit alleges that Valve promotes illegal gambling through its games. The games named in the lawsuit include Couter-Strike 2, Dota 2, and Team Fortress 2.
The lawsuit against Valve that alleges illegal gambling was filed by the office of Letitia James, the Attorney General of New York, on February 25. In its complaint, the state of New York argues that Valve’s loot box systems function as illegal gambling under New York law, and compares the system to slot machines. According to the filing, the mechanic mirrors gambling because players spend money in exhange for virtual goods without knowing what they’ll receive. The case seeks to prevent Valve from continuing the practice in New York and could potentially result in financial restitution paid by the video game developer.
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Valve Responds to the New York Attorney General’s Lawsuit
On March 11, Valve responded to the NYAG’s lawsuit with a post on Steam. In its statement, the video game developer rejected the allegation that its in-game mystery boxes are a form of gambling. Instead, Valve likened them to how traditional collectibles that involve chance work in the real world. Specifically, Valve drew comparisons between its mystery boxes and baseball, Pokemon, and Magic the Gathering cards, and even pointed to Labubu. Valve also emphasized that its games remain fully playable without purchasing its in-game loot boxes and that the items obtained from them are purely cosmetic rather than gameplay altering. The developer expressed disappointment regarding the lawsuit, after having worked closely with the NYAG to comply with its investigation. This is just one of four lawsuits Valve is facing that have been filed recently.
“You may have seen the New York Attorney General recently filed a lawsuit against Valve claiming mystery boxes (like crates, cases, and chests) in some of our games violate New York gambling laws. We don’t believe that they do, and were disappointed to see the NYAG make that claim after working to educate them about our virtual items and mystery boxes since they first reached out to us in early 2023. We rarely talk about litigation, but we felt we should explain the situation to you,” Valve wrote in its post.
The Attorney General’s filings take a different view of how Valve’s mystery box systems operate. According to the NYAG’s complaint, while the items are designed to only alter cosmetic game features, the state argues they can still carry financial value because they can be sold through the Steam Community Market or other third-party trading sites.
Since players pay for a chance to receive random items—most worth little, others worth thousands when traded—the state claims Valve’s loot boxes meet its legal definition of gambling. Valve argues that the claim by the New York Attorney General that these digital assets shouldn’t be transferable between players has no merit, again comparing its digital assets to how real world trading cards and other physical collectibles work. Valve is currently facing another lawsuit which revolves around its loot boxes in Washington.
“We think the transferability of a digital game item is good for consumers—it gives a user the ability to sell or trade an old or unwanted item for something else, in the same way an owner can sell or trade a tangible item like a Pokemon or baseball card,” Valve wrote.
The disagreement highlights a debate that has been unfolding in the gaming industry for years. Game developers frequently describe loot boxes as a digital version of long-standing collectible products such as trading cards or other surprise-based collectibles. Critics typically argue that digital marketplaces and ease of access to children create a different environment because items can be traded instantly and sometimes reach significant resale prices. That concern has already prompted regulatory action in parts of Europe, where countries like Belgium and the Netherlands have restricted or entirely banned certain loot box systems. Valve recently won a different lawsuit, so perhaps the courts will rule in its favor once more.
Ultimately, it’ll be left up to the courts to decide which entity’s position is correct. One side views loot boxes as a harmless way for consumers to interact with goods they purchase, while the other views them as an illegal gambling practice that should be regulated or removed. The outcome of the case could help determine how similar systems are treated in the US going forward, and have lasting implications for companies like Epic Games and Activision Blizzard that also utilize loot box reward systems.
