Valve Rejects Gambling Claims in New York Loot Box Lawsuit

by on March 13, 2026

Valve has issued a public response to a lawsuit filed in New York by Attorney General Letitia James, accusing the company of promoting illegal gambling through loot boxes in several of its games. The legal action targets randomized reward systems in Counter-Strike 2, Dota 2, and Team Fortress 2, arguing that the mechanics require players to pay for a chance to receive rare digital items and therefore function as gambling.

According to the complaint, the item-opening process in Counter-Strike 2 resembles a slot machine. Players purchase cases or crates that contain cosmetic items selected through random chance, with an animated spinning wheel that eventually lands on a reward. These items have no gameplay function, but the lawsuit states they can be sold online for real money through digital marketplaces.

The complaint cites one example in which an AK-47 weapon skin reportedly sold for more than $1 million. Investigators argue that the ability to sell cosmetic items creates a financial incentive similar to gambling, since players pay for a chance to obtain something with potential monetary value. The lawsuit also claims Valve has made billions of dollars through these systems by encouraging players to pursue rare cosmetic rewards.

Attorney General Letitia James states that the mechanics expose children and adolescents to gambling-like behavior. Research referenced by the Attorney General’s office indicates that young people who encounter gambling systems early are more likely to develop gambling problems later in life. The complaint says Valve’s games encourage players to chase rare items that can carry high resale value, presenting the pursuit as a desirable outcome.

The legal filing seeks several remedies. The Attorney General asks the court to permanently stop what the lawsuit describes as unlawful gambling promotion within Valve’s games. It also requests disgorgement of profits, financial penalties, and compensation for affected users. By targeting both the randomized reward systems and the digital marketplace used to sell items, the case aims to determine whether the mechanics meet the legal definition of gambling under New York’s constitution and penal code.

Valve responded publicly on March 11 through a statement posted on a Steam Support page addressed to players. The company explained that it rarely discusses litigation but decided to clarify its position for users.

“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,” the company wrote. “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.”

Valve states that it had communicated with the Attorney General’s office after the investigation began and provided information about how its item systems operate. The company explains that randomized rewards are common in both digital and physical collectible markets.

“We shared with the NYAG that these types of boxes in our games are widely used, not just in video games but in the tangible world as well, where generations have grown up opening baseball card packs and blind boxes and bags, and then trading and selling the items they receive,” Valve wrote.

The statement compares the systems to physical collectible products, including baseball cards, Pokémon cards, Magic the Gathering cards, and Labubu toys. Valve also says digital packs similar to its loot boxes date back to 2004 and are widely used across the gaming industry.

Valve explains that opening these boxes is optional. Players can play Counter-Strike 2, Dota 2, and Team Fortress 2 without purchasing any of them.

“Players don’t have to open mystery boxes to play Valve games,” the company wrote. “In fact, most of you don’t open any boxes at all and just play the games—because the items in the boxes are purely cosmetic, there is no disadvantage to a player not spending money.”

The company also described actions taken to prevent gambling sites from using Steam items as currency. According to Valve, it has spent years investigating accounts linked to gambling services and enforcing rules within the Steam Subscriber Agreement.

“Valve does not cooperate with gambling sites,” the company stated.

Valve reports that it has locked more than one million Steam accounts that were misused by third parties in connection with gambling, fraud, and theft. The company also described systems introduced to protect users and limit abuse.

One feature, trade reversal, enables users to reverse Steam Community Market trades from the previous seven days. Another feature, trade cooldown, adds a waiting period before newly acquired items can be traded. Valve states these systems reduce the ability of gambling websites to operate using Steam accounts and digital items.

The company also states that gambling-related businesses are not permitted to sponsor or participate in tournaments for Valve games.

Valve challenged several proposals put forward by the Attorney General’s office. One proposal suggests restricting the transfer of items obtained from loot boxes. Investigators argue that tradable items strengthen the claim that the system functions as gambling because rewards can be converted into real money through marketplaces.

Valve rejected that interpretation. The company states that item transfer and resale provide consumer benefits.

“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,” the company wrote. “Transferability is a right we believe should not be taken away, and we refuse to do that.”

Valve compared digital trading to the exchange of physical collectibles such as Pokémon cards or baseball cards, where collectors frequently sell or trade items obtained from random packs.

Another point of disagreement involves proposals for additional user verification. According to Valve, the Attorney General’s office suggested collecting more data to confirm that New York residents are not bypassing location restrictions through tools such as VPNs.

“The NYAG also proposed to gather additional information (beyond what we normally collect in the course of processing payments) about each game user on the off-chance someone in New York was anonymizing their location to appear outside of New York,” the company wrote.

Valve said implementing those measures would require invasive technologies applied to users worldwide. The company also opposed demands for further age verification, stating that most payment methods used by Steam customers in New York already include age verification.

“Valve knows our users care about the security of their personal information, and we believe it’s in our and their interest to only collect the information necessary to operate the business and comply with law,” the company said.

The statement also addressed comments in the lawsuit connecting video games with real-world violence.

“Those extraneous comments are a distraction and a mischaracterization we’ve all heard before,” Valve wrote, adding that numerous studies have concluded there is no link between media—including movies, television, books, comics, music, and video games—and real-world violence.

Valve disclosed that it had the option to reach a settlement with the Attorney General’s office but declined.

“It may have been easier and cheaper for Valve to make a deal with the NYAG,” the company wrote. “But we believed the type of deal that would satisfy the NYAG would have been bad for users and other game developers, and impacted our ability to innovate in game design.”

Valve also stated that it will comply with legislation if New York lawmakers pass laws governing mystery boxes. According to the company, no such law has been enacted despite the issue being considered in the past.

“We will of course comply if the New York legislature passes laws governing mystery boxes—something it has not done despite considering the issue a few times,” the statement said. “Such laws would be the result of a public process, presumably with input from the industry and New York gamers.”

“Ultimately, a court will decide whose position—ours or NYAG’s—is correct,” Valve wrote. “In the meantime, we wanted to make sure you were aware of the potential impact to users in New York and elsewhere.”

The New York lawsuit is not the only legal challenge involving these systems. A separate case filed in Washington in the United States raises comparable claims about manipulative mechanics connected to loot boxes in games.