The battle over loot boxes just got a major new chapter as New York State’s attorney general, Letitia James, officially filed a lawsuit against Valve accusing the company of promoting illegal gambling through its popular games like Counter-Strike 2, Team Fortress 2, and Dota 2. The lawsuit, filed in Manhattan on February 25, points out that Valve’s loot box system resembles slot machines and targets children and adults alike, urging them to gamble for rare virtual items that can be sold for real money.
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.
— NY AG James (@NewYorkStateAG) February 25, 2026
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, Valve has made billions of dollars by enticing users, many of whom are teenagers or younger, to pay for the chance to win valuable digital skins and cosmetics. These items carry no in-game power but hold significant monetary value, with some rare Counter-Strike skins reportedly selling for over $1 million. The loot boxes, opened via digital keys purchased with real currency, create an addictive cycle of gambling that the lawsuit claims is illegal under New York law.
The attorney general’s office also highlights Valve’s role in facilitating access to third-party marketplaces where these virtual items are traded for actual cash. By allegedly assisting these transactions, Valve is accused of enabling a gambling ecosystem that violates state gambling laws. This move is especially notable because it targets the core of Valve’s digital economy built on Steam’s marketplace, a system that has long been controversial for blurring the line between gaming and gambling.
Attorney General James didn’t mince words, stating that "illegal gambling can be harmful and lead to serious addiction problems, especially for our young people." The suit demands Valve cease the promotion of these gambling features, disgorge the profits made from them, and pay substantial fines. The lawsuit also calls for full restitution to consumers harmed by these practices.
This legal action could have far-reaching impacts beyond New York, as loot box mechanics have been under scrutiny globally for years. Countries like China and South Korea regulate loot boxes with required odds disclosures, while some regions like Belgium have moved to ban them outright. New York’s lawsuit may prompt other jurisdictions to ramp up their regulatory efforts, putting pressure on Valve and other gaming companies to rethink how they monetize games.
Valve, who last faced legal challenges over gambling accusations in 2022 but successfully defended itself, has yet to publicly comment on this new suit. For now, the gaming community is watching closely as this case unfolds, knowing it could reshape the way digital economies operate in multiplayer games worldwide.
If you want to dive into the details, the official lawsuit document filed by New York’s attorney general is available for review, alongside her public announcement on X. This lawsuit marks a significant moment in the ongoing debate about gaming, gambling, and protecting younger players from potentially addictive mechanics.
For more, check out the New York attorney general’s official press release and her statement on X. The full complaint can also be read at this link.
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