Lynnae Williams Journalist
Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioVideo game developer Valve, best known for hit titles like “Counter-Strike” and as the operator of the gaming platform Steam, has been hit with a proposed federal class action lawsuit accusing the company of knowingly operating an unlawful gambling enterprise through its loot box system, which features prominently in some of its most popular games.
In the complaint, filed on March 9 in the U.S. District Court for the Western District of Washington, class members claim that Valve uses deceptive, “casino-style” psychological tactics to profit from millions of gamers, including children. The complaint targets the monetization models used in Counter-Strike (including Counter-Strike 2 and Counter-Strike: Global Offensive), Dota 2, and Team Fortress 2.
“Some of the most popular video games in the world now have gambling built directly into them,” the complaint argues.
Law firm Hagens Berman brought the lawsuit on behalf of consumers who purchased loot box keys for one of these titles. The law firm argues that Valve profited from a system where players spend real money for a chance at virtual items that can later be resold for cash.
“We believe Valve deliberately engineered its gambling platform and profited enormously from it,” said Steve Berman, Hagens Berman’s founder and managing partner. “Consumers played these games for entertainment, unaware that Valve had allegedly already stacked the odds against them. We intend to hold Valve accountable and put money back in the pockets of consumers.”
This lawsuit is the second major legal challenge the gaming giant has faced over its loot box mechanic in less than two weeks.
Complaint Says Valve Built a Slot Machine Economy
The complaint argues that Valve’s loot box system meets the legal definition of gambling under Washington state law.
“Washington’s gambling statutes define ‘gambling’ as ‘staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under a person’s control or influence,’” the complaint says.
“Valve’s loot boxes satisfy every element of this definition: users stake money (the price of a key) on the outcome of a contest of chance (the random selection of a virtual item), and the items received are ‘things of value…’ because they can be sold for money through Valve’s own marketplace and through third-party marketplaces that Valve has fostered and facilitated.”
And that’s the core argument in the lawsuit, which takes issue with the loot box model, where players receive containers for free but must buy a “key” for $2.49 plus tax if they want to unlock them. According to the complaint, once a player purchases a key, what they receive in return is entirely determined by chance: most prizes are worth “only pennies,” while a few rare items can sell for hundreds or even thousands of dollars. The filing says almost all items (96%) players get from opening a Counter-Strike loot box have a value that’s less than the key they used to open them.
Plaintiffs argue that Valve’s system is a “carefully engineered revenue model” and “Valve’s loot boxes are not just gambling in a legal sense. They are designed to work like gambling — using the same psychological techniques that casino game manufacturers have refined over decades to keep people spending money.”
These techniques include unpredictable reward schedules, “near-miss” illusions in which an animation appears to stop just short of a rare item, and around-the-clock availability. The complaint goes on to say that Valve designed the onscreen experience in Counter-Strike to “resemble a virtual slot machine,” complete with a spinning wheel that keeps players spending money.
New York Lawsuit Also Targets Valve’s Loot Box System
This class action lawsuit against Valve comes just under two weeks after New York Attorney General Letitia James sued Valve on Feb. 25 over its loot boxes, saying the mechanic amounts to illegal gambling under the state’s laws.
In the complaint, New York describes Valve’s loot boxes as “quintessential gambling” and accuses the company of violating the state’s Constitution and Penal Law.
The New York lawsuit also likens the loot boxes in Valve’s games to a slot machine, “a wheel cycles through potential items before stopping on one. And like a slot machine, the spinning wheel conveys the illusion of a ‘near miss’ when it appears to stop close to, but not on a valuable item.”
James said Valve “has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes.” The state is seeking injunctive relief, restitution, and other penalties.
