New York’s Attorney General has just dropped a lawsuit against Valve, the huge video game developer behind popular franchises like Counter-Strike, Team Fortress, and Dota 2. The state is accusing Valve of promoting illegal gambling and potentially addicting kids through its use of “loot boxes,” as reported by Reuters.
So, what exactly are these “loot boxes” everyone’s talking about? Well, they let players use real money to buy chances to win virtual items. You pay up, and you get a random item, which could be anything from a cool new decoration for your character to a unique weapon skin. These items are often meant to show off your status in the game, which can be super appealing to players, especially younger ones.
The Attorney General’s complaint, filed in a state court in Manhattan, states that Valve has been raking in billions of dollars by selling “keys” that open these loot boxes. In one game, the whole process even looks like a slot machine, with a wheel spinning through different items before it finally stops on your prize. The lawsuit claims this setup is “quintessential gambling,” which violates New York’s constitution and penal law.
What makes Valve’s situation even more unique is its business model
The company lets players sell the items they win on its virtual marketplace, the Steam Community Market, and other platforms. This creates a whole secondary economy around these virtual goods, adding another layer to the gambling accusation. It’s not just about what you win, but what you can do with it afterward.
The complaint really hammers home the point about children and adolescents. It calls Valve’s loot boxes “particularly pernicious” because they’re so popular with younger players. The lawsuit cites research from the Massachusetts Department of Public Health, which found that children introduced to gambling by age 12 are four times more likely to become problem gamblers as adults. It’s a huge problem if these games are essentially acting as a gateway to gambling for kids.
Because of these allegations, the Attorney General is pushing for some big changes. She’s seeking restitution for players who have spent money on these loot boxes. On top of that, she wants a fine that’s three times Valve’s alleged illegal gains. That could be a massive amount of money, given the “billions of dollars” in revenue mentioned. Valve, which is based in Bellevue, Washington, hasn’t responded to requests for comment yet.
This isn’t the first time video game loot boxes have come under fire from regulators, either. For example, just last January 9, 2025, the U.S. Federal Trade Commission fined Cognosphere, the company behind Genshin Impact, $20 million. That fine was for allegedly deceiving children and others about the odds of winning valuable loot box prizes.
That company also had to implement rules blocking children under 16 from buying loot boxes without parental consent. While Cognosphere didn’t admit wrongdoing, it shows that regulators are definitely keeping a close eye on these kinds of monetization tactics in video games, although there are examples to the contrary, where we saw Texas lawmakers pushing to legalize sports betting.
New York state has previously gone after social media giants like Meta and forced them to display clear warning labels about potentially harmful features.
Published: Feb 26, 2026 02:30 pm