Daily Archives: April 17, 2019

Tribal Casino Sues Video Gaming Company over Illegal Loot Box Gambling

Casino Watch Focus has reported on the ongoing saga of the new gambling mechanic in video games know as loot boxes. This mechanic works by having players purchase boxes full of mystery items in video games. These boxes often cost real world money and the items coming out of the box can be garden variety or fairly useless in game items all the way to very powerful weapons or items that give players a leg up. There have been may instances where these items hold real world value and some examples exist of those items being sold for real money. So the player puts money in the game, pulls the box open lever, gets a random prize of various value and then the player trades those in for real world money, very possibly at a financial gain. Many would argue that the mechanic described is the same as gambling on a slot machine, and that’s the very foundation of for a tribal casino’s lawsuit is video game manufacture.   An online source explains how such a lawsuit could be brought forth: 

The Quinault Indian Nation has filed a lawsuit against Valve, the makers of Steam, claiming that it is running an unlicensed gambling operation and demanding payment for damages.

Okay, this gets a little complicated so settle in. The Quinault Indian Nation owns and operates a licensed casino in the state of Washington, one that is regulated by the Washington Gaming Commission. Valve is also based in Washington.

In its suit against Valve (via Geekwire), the Quinault Nation alleges that “Valve facilitated illegal, unregulated and unlicensed online gambling” when it launched skins for /Counter-Strike: Global Offensive /(/CS:GO/).

Back in 2013, Valve started releasing skins for weapons in /CS:GO/, these upgrades are purely cosmetic. Players would earn crates by playing /CS:GO /and these crates could then be opened with keys which Valve sold in its store. The keys were the only way to open the crates, and it made Valve a tidy bit of cash.

The Quinault Nation says that “the look, feel, sound and experience [of opening a crate] was basically an online slot machine”, providing YouTube footage of players opening crates to back up its claim.

What’s particularly striking in this case, is that seemingly at every level of the transaction, Value, the company being sued by Quinault Indian Nation, had their hand in guiding the process. An online source explains:

It points to the skin gambling sites that were launching and says Valve did nothing to stop them. “Valve had actual knowledge of the identity of the Valve accounts that gambling websites used to effectuate gambling transactions, and chose not to take any action against them,” the court documents state.

It goes on to claim that “Valve allowed gambling websites to use Valve accounts on Valve’s servers and Valve’s computers to effectuate gambling transactions” and that “Valve also provided technical support to gambling websites and real-money cash out websites, despite those websites violating Valve’s Steam Subscriber Agreement, and would return control of gambling websites’ Valve accounts back to the gambling website after being hijacked or hacked by other third parties.”

Despite simply providing an incredibly clear picture for those legislative and consumer protection bodies looking to best understand just how much these loot boxes are no different from gambling, the tribe also outlines exactly how it hurts not only their business with the State, but how doing so illegally without following state regulation further harms those involved. They conclude: 

The Nation has a contract with the State of Washington that means it must remain compliant with the state’s laws if it wants to operate casinos, and that compliance costs money. It has to “engage in responsible gaming, prevent fraud, prevent illegal gaming, and prevent underage gambling”. The Nation also pays 2% of its earnings in Impact Mitigation Funds, which go to paying support services in area around the casino.

If Valve is a gambling operation, like the Nation claims, then it is an unlicensed one and doesn’t incur any of the costs or the risks that come with a gambling license. The Nation is suing for damages, but also the money Valve obtained through gambling transactions.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION