Last February, New York City Attorney General Letitia James filed a lawsuit against Valve for the use of loot boxes in their games. In her own words, in Counter-Strike 2 “children and adults alike are illegally gambling for the chance to win virtual prizes”. She argues that loot boxes are essentially unregulated gambling and should be treated by law as such.
Valve with questionable arguments
Valve’s legal department has responded with a tremendously weak defense. Claiming that “people enjoy surprises” and that “part of the appeal of many popular collectibles, such as baseball cards or cereal boxes, is the possibility of opening a closed box and being surprised with a rare item”. Stating that “no legislature or court has ever condemned this act as illegal gambling”.
The problem is that this is not true. The European Parliament declared that loot boxes are gambling in 2023, tightening its PEGI this past March in relation to this legislation. So it doesn’t seem that this defense has much ground to stand on.
What would happen if the New York justice system sided with the attorney general? That Valve would have problems. The lawsuit demands the equivalent of three times the profits Valve has made from loot boxes and to prevent them from selling them in the future in the state of New York. With the logistical issues this would entail, not to mention the legal precedent it would set. So Valve could be in trouble. If their attempt to pull a Saul Goodman doesn’t end up backfiring.
