New York sues Valve over loot boxes

Samuel Buchmann

26/2/2026

Translation: machine translated

Paid loot boxes are illegal gambling in the opinion of the New York public prosecutor's office. The mechanics would put children in particular at risk.

New York Attorney General Letitia James sues Valve over loot boxes. The civil lawsuit filed with the state Supreme Court accuses the company behind Steam ofof promoting illegal gambling with loot boxes in titles such as «Counter-Strike 2», «Team Fortress 2» and «Dota 2» - and thus endangering children and young people in particular.

The familiar model of such boxes and keys takes centre stage: players can open virtual containers for a fee. They contain cosmetic items such as weapon skins or hats. A box usually costs 2.49 US dollars and the contents are determined at random. According to the statement of claim, this concept deliberately resembles a one-armed bandit, including an animated «spinning wheel». Many of the items drawn are practically worthless, but some rare items are traded for thousands of dollars. An AK-47 skin is said to have fetched more than a million dollars in 2024.

«Dangerous gambling entry for children»

The Attorney General's Office argues that Valve is operating a gambling system. This is because players are buying a random-based chance to win a prize with real market value. This would violate the constitution and the criminal laws of the state. Valve even earns twice: on the one hand from the keys sold, and on the other hand from fees in the trade of virtual goods in the Steam Community Market. In addition, Valve facilitates trade via third-party marketplaces where the skins can be sold directly for real money.

This is particularly problematic for minors. Loot boxes would create status promises with the prospect of rare skins and thus tempt players to play repeatedly. The authority refers to studies according to which contact with gambling in childhood often leads to addiction later on. For Letitia James, loot boxes are part of a whole spectrum of «addictive online suppliers» for young people. Her authority is already taking action against social media platforms and illegal online casinos.

Billion-dollar business under scrutiny

Valve has not yet responded to the US lawsuit. In other countries, the company had partially restricted lootbox mechanics after authorities categorised them as gambling. For example in Belgium and the Netherlands. There has been an international dispute for years about whether loot boxes should be treated legally as betting. Lawyers for the companies responsible argue that purely cosmetic rewards without an official payout option do not fall under gambling law.

For Valve and the gaming industry, a business model that has generated billions in revenue for years is under scrutiny. The lawsuit from New York could increase the pressure in the USA. The Attorney General is demanding that Valve hand over all «illegally generated profits» from loot boxes and pay a three-fold fine. In addition, the mechanics should disappear from games in future. It could be months or even years before a final judgement is reached.

Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.

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