Valve Doesn’t Want Steam Used By Gambling Websites That Trade CS:GO Skins

Valve Corp., the maker of popular video games like "Half-Life," "Counter-Strike," "Portal" and "Left 4 Dead," said in a blog post Wednesday it was distancing itself from gambling sites that profit from its Steam platform. Despite the recent gambling controversy surrounding Steam, however, the company stopped short of announcing any definitive action against those sites.

The controversy revolves around trading of in-game items, a feature that was added to Steam in 2011 “to make it easier for people to get the items they wanted in games featuring in-game economies.” That feature was exploited by third-party websites that trade in those items, most notably in-game weapons from "Counter-Strike: Global Offensive." The items, which can be bought and sold — and in some cases, can even be encashed — then effectively become chips used for gambling on those sites.

Two recent lawsuits against such sites also name Valve as a co-conspirator, alleging that the company knowingly allowed and facilitated the creation and operation of the illegal online gambling network that depends on its Steam platform. An April report by Bloomberg said the online gambling bets using in-game items amounted to $2.3 billion in 2015. And according to another report, the illegal gambling was expected to rake in $7.4 billion worth of bets in 2016.

Trying to distance itself from the gambling sites, though without referring to the lawsuits, the company’s spokesman Erik Johnson said in the blog: “We’d like to clarify that we have no business relationships with any of these sites. We have never received any revenue from them. And Steam does not have a system for turning in-game items into real world currency.”

Johnson also provided a somewhat detailed, technical explanation of how the gambling sites exploit Steam. However, despite saying that the exploit “to run a gambling business is not allowed by our API nor our user agreements,” the company still stopped short of banning such sites, saying only this: “We are going to start sending notices to these sites requesting they cease operations through Steam, and further pursue the matter as necessary.”

Often, victims of the illegal betting are gamers who are young or starting out, since they typically don’t have high-end in-game items, putting them at a comparative disadvantage to experienced players who have collected impressive inventories.

Video game attorney Ryan Morrison of Morrison & Lee LLP told Bloomberg about Valve’s decision: “This is long overdue. I’m very tired of getting e-mails saying, ‘I’m 15 and lost a thousand dollars on a Counter-Strike gambling website.’”

Bloomberg also cited another report that estimated this sort of gambling, if left unchecked, to grow to over $22 billion by 2020.