Valve is being sued by the New York Attorney General over loot boxes in Counter-Strike 2, Dota 2 and Team Fortress 2, with the state alleging the systems amount to illegal gambling.
In a 52-page civil filing submitted to the New York State Supreme Court, Attorney General Letitia James claims Valve’s loot box mechanics violate the state’s Constitution and Penal Law. The lawsuit argues that players, including minors, are being encouraged to spend money for a random chance at valuable virtual items, something the state says crosses the line into gambling.
What The New York Lawsuit Alleges
The filing specifically points to loot box systems in Counter-Strike 2, Dota 2 and Team Fortress 2. In Counter-Strike 2, players purchase keys, typically priced at US$2.49, to open cases that contain randomly determined cosmetic items such as weapon skins. The complaint directly compares the animated case-opening sequence to a slot machine, noting the spinning wheel that lands on a selected item.
The state argues that Valve intentionally makes certain items far rarer than others, increasing their perceived and real-world value. While most items are low value, rare skins can sell for thousands of dollars, and one Counter-Strike skin reportedly sold for more than US$1 million in 2024.
A Multi-Billion Dollar Skins Economy
The lawsuit also highlights the scale of the Counter-Strike skins market. In March 2025, reports indicated the market for Counter-Strike skins had surpassed US$4.3 billion, attracting not just players but also traders and speculators treating digital items as investment assets.
Through the Steam Community Market, users can sell skins for platform credit, which can then be used to purchase games, hardware or other digital items. The Attorney General’s office further claims Valve “facilitates and even assists” third-party marketplaces, where skins can be sold directly for real money.
This secondary market is central to the state’s argument. The filing claims players are effectively paying for a random chance at prizes that hold real monetary value, which New York law considers a defining element of gambling.
Focus On Minors And Addiction Concerns
Attorney General Letitia James said in a statement, “Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people.”
The complaint alleges that Valve has “made billions of dollars” by allowing children and adults to gamble for valuable virtual prizes. It frames loot boxes as part of a broader pattern of addictive online systems targeting younger audiences. The Attorney General’s office has previously taken action against social media platforms and illegal online casinos, and now appears to be expanding that scrutiny to game monetisation models.
The state also references studies suggesting early exposure to gambling-like mechanics can increase the risk of addiction later in life. In its view, loot boxes represent what it calls a “quintessential gambling” model that is prohibited under New York law, outside of specific exceptions that it argues do not apply here.
What New York Is Asking The Court To Do
The lawsuit seeks wide-ranging remedies. Among them are:
- Permanently blocking Valve from violating New York’s Constitution and Penal Law
- Forcing Valve to account for money lost by New York consumers
- Ordering full restitution and damages
- Requiring Valve to disgorge profits earned from the alleged illegal practices
- Imposing a fine of three times the amount of gains from the practice
- Awarding costs and any other relief the court deems appropriate
In short, the Attorney General wants the loot box mechanics removed and financial penalties imposed if the court agrees they constitute illegal gambling.
As of publication, Valve has not issued a public response to the lawsuit.
The Broader Loot Box Debate
Loot boxes have sat in a legal grey area for more than a decade. Different countries have taken different approaches. China and South Korea require companies to disclose item drop rates. In Australia, loot boxes automatically result in an M rating, while simulated gambling elements can push a game to R18+, restricting sales to minors. Belgium has attempted to ban loot boxes entirely, though enforcement has proven complex.
For Valve and the wider industry, this New York lawsuit could become a pivotal case in the United States. If the court sides with the Attorney General, it may increase pressure on publishers to rethink or significantly alter loot box systems for the US market.
With billions of dollars tied up in cosmetic economies and live service monetisation, the outcome could shape how games like Counter-Strike 2 and Dota 2 operate for years to come.