New York’s Attorney General on Wednesday sued Valve Corporation, accusing the video game developer of promoting illegal gambling through its use of “loot boxes” and exposing children to addictive behavior.
In a complaint filed in New York state court, Attorney General Letitia James said Valve’s loot boxes amount to “quintessential gambling,” in violation of the state’s Constitution and Penal Law.
Valve’s popular franchises include Counter-Strike 2, Team Fortress 2, and Dota 2. While the games are free to play, the lawsuit alleges the company has generated billions of dollars by selling “keys” that allow players to open virtual loot boxes for a chance to win rare in-game items.
“The franchises also have proven to be remarkably lucrative for Valve, even though the games have been free to play for years. Valve has managed this feat by pioneering an alternative model for monetizing its games: gambling,” according to the complaint.
Loot boxes allow players to spend real money for a randomized chance to obtain virtual items such as character cosmetics or weapon “skins.” According to the complaint, in at least one game, the process resembles a slot machine, with a wheel spinning through possible prizes before stopping.
“This loot box model that Valve has developed—charging an individual for a chance to win something of value based on luck alone—is quintessential gambling, prohibited under New York’s Constitution and Penal Law,” the complaint says.
James also said that rare items won through loot boxes can be resold for real money on Valve’s Steam Community Market and third-party marketplaces, creating what she described as an online gambling ecosystem.
“Valve, a video game developer, has made billions of dollars by letting children and adults illegally gamble for the chance to win valuable virtual prizes,” James posted on social media. “These features are addictive and harmful. That’s why I’m suing to stop Valve’s unlawful conduct and protect New Yorkers.”
According to the complaint, one weapon skin sold for more than $1 million in 2024, and the overall market for Counter-Strike skins in March 2025 was reportedly worth more than $4.3 billion.
“Valve’s loot boxes are particularly pernicious because they are popular among children and adolescents,” according to the complaint, citing the Massachusetts Department of Public Health as finding that children introduced to gambling by age 12 are four times more likely to become problem gamblers as adults.
James is seeking restitution for affected players and a civil penalty of three times Valve’s alleged illegal gains.
Loot boxes have faced increasing scrutiny from regulators. In January 2025, the U.S. Federal Trade Commission fined Cognosphere, maker of Genshin Impact, $20 million over allegations it deceived children and other players about the odds of winning valuable prizes. Cognosphere, which does business as HoYoverse, did not admit wrongdoing, the FTC said.
Original article: https://www.yogonet.com/international/news/2026/02/26/117799-new-york-sues-developer-valve-calling-its-video-game-loot-boxes-illegal-gambling
