New York Attorney General Letitia James has filed a lawsuit against video game developer Valve for illegally promoting gambling through slot machine-like features in its video games.
The lawsuit alleges Valve’s in-game “loot box” feature violates New York’s gambling laws and can lead to serious harms, especially for children and teenagers.
An investigation by the Office of the Attorney General (OAG) found that Valve’s games, including Counter-Strike 2, Team Fortress 2, and Dota 2, enable gambling by enticing users to pay for the chance to win a rare virtual item of significant monetary value.
The OAG said that in Valve’s most popular game, the process resembles a slot machine, with an animated spinning wheel that eventually rests on a selected item.
The randomly selected virtual items have no in-game functionality but can be sold online for money, with one item reportedly being sold for more than $1 million.
The lawsuit alleges that Valve has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling in the hopes of winning expensive virtual items that they can cash in on.
With this lawsuit, the Attorney General seeks to permanently stop Valve from continuing to promote illegal gambling in its games and to pay disgorgement and fines.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” said Attorney General James. “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.”
The lawsuit alleges that Valve enables gambling through these games by charging users for the chance to win a rare virtual item by paying to open a virtual container known as a “loot box.”
The virtual items awarded when a user opens a “loot box” are cosmetic, like a hat for a player’s character or artistic skins for a player’s weapons. Like slot machines, the prizes won from loot boxes are determined randomly in accordance with odds set by the casino, which in this case is Valve.
Valve intentionally makes some items far harder to win than others, making the rare items more valuable. Despite having no in-game functionality, these virtual items can be extremely valuable, with the rarest items selling for thousands of dollars online.
According to the OAG, the value of Counter-Strike’s skins rose significantly in recent years, attracting speculators and investors who viewed these virtual items as potentially lucrative digital assets. In March 2025, it was reported that the market for Counter-Strike skins had surpassed $4.3 billion.
Valve allows users to cash in on the virtual items they have won in two ways. Users can sell the items they won through Valve’s own virtual marketplace, the Steam Community Market, where they can use the proceeds to buy other video games, video game hardware, and other virtual items.
Users can also connect their Valve accounts to third-party marketplaces where the virtual items can be sold directly for cash. The OAG’s investigation found that Valve facilitates and even assists these third-party marketplaces in their operations.
Attorney General James asserts that young users with limited funds can be enticed to start gambling through loot boxes in the hopes of obtaining a virtual item that they believe will enhance their status in the games’ virtual worlds.
In addition, although the case is about illegal gambling, the OAG pointed out that Valve’s promotion of games that glorify violence and guns helps fuel the dangerous epidemic of gun violence, particularly among young gamers who can become numbed to grave violence before their brains are fully developed.
In the lawsuit filed Wednesday, Attorney General James 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.