New York Attorney General Letitia James has sued video game developer Valve Corporation, accusing the company of promoting illegal gambling through popular online games played by children and teenagers.
The lawsuit targets in-game “loot box” features in Counter-Strike 2, Team Fortress 2 and Dota 2 that require users to pay for a chance to win rare virtual items that can later be sold for money.
According to the complaint, players purchase virtual containers known as loot boxes and receive a randomly selected cosmetic item, such as a character hat or weapon “skin.” The process resembles a slot machine, with an animated spinning wheel that lands on a prize.
The attorney general alleges the prizes are determined by odds set by Valve and that some items are intentionally made far rarer than others, increasing their value. While the items have no impact on gameplay, some have sold online for thousands of dollars. One Counter-Strike skin reportedly sold for more than $1 million in June 2024.
The market for Counter-Strike skins surpassed $4.3 billion in March 2025, according to the lawsuit.
Valve allows users to sell items through its Steam Community Market, where proceeds can be used to purchase games, hardware or other digital items. Users can also link their accounts to third-party marketplaces to sell items directly for cash. The attorney general’s office alleges Valve facilitates and assists those third-party marketplaces.
Investigators also found that Valve has received hundreds of thousands of support requests from users reporting hacked accounts or fraudulent item transfers.
Attorney General James said the system violates New York gambling laws and can cause serious harm, particularly for young users.
“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” 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 lawsuit seeks a court order permanently blocking Valve from offering the gambling features in New York, as well as disgorgement of profits and financial penalties.
The case was filed in state court and is being handled by attorneys in the attorney general’s Bureau of Internet and Technology.
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