On Wednesday, New York’s Attorney General initiated a lawsuit against Valve Corporation, alleging the video game company encourages illegal gambling by utilizing “loot boxes” and thereby exposing minors to addictive behaviors.
In a formal complaint submitted to the New York state court, Attorney General Letitia James characterized Valve’s loot boxes as “the epitome of gambling,” which breaches the state’s Constitution and Penal Code.
Valve is renowned for its popular game series, including Counter-Strike 2, Team Fortress 2, and Dota 2. Although these games are free-to-play, the lawsuit claims that Valve has amassed billions by offering “keys” that let players open virtual loot boxes, giving them a chance to win rare in-game assets.
“These franchises have proven to be remarkably profitable for Valve, despite their long-standing free-access model. Valve has accomplished this by innovating a gambling-based monetization strategy for its gameplay.,” states the complaint.
Loot boxes enable players to spend real cash for a random opportunity to acquire virtual goods like character cosmetics or weapon “skins.” The complaint points out that in at least one title, this process imitates a slot machine, where a wheel spins through various potential rewards before coming to a stop.
“The loot box mechanism developed by Valve—which charges players for a chance to receive valuable items based solely on luck—is fundamentally gambling, outlawed under New York’s Constitution and Penal Code,” the complaint asserts.
James has also highlighted that rare items obtained through loot boxes can be resold for real money on Valve’s Steam Community Market and other third-party platforms, effectively creating what she describes as a digital gambling ecosystem.
“As a video game entity, Valve has profited enormously by permitting both children and adults to engage in unlawful gambling for a chance to win valuable virtual rewards,” James remarked on social media. “These features are both addictive and detrimental. That is why I am taking legal action to halt Valve’s illegal practices and safeguard New Yorkers.”
The complaint notes that one weapon skin was sold for over $1 million in 2024, and the overall market for Counter-Strike skins was reportedly valued at over $4.3 billion in March 2025.
“Valve’s loot boxes pose significant risks as they are especially popular with children and teenagers,” states the complaint, referencing findings from the Massachusetts Department of Public Health, which indicate that children exposed to gambling by age 12 are four times more likely to develop gambling problems as adults.
James is seeking restitution for the affected players and a civil fine of three times Valve’s alleged illegal profits.
Recently, loot boxes have come under escalating scrutiny from regulators. In January 2025, the U.S. Federal Trade Commission imposed a $20 million fine on Cognosphere, the developer of Genshin Impact, due to accusations of misleading children and other gamers regarding the odds of securing valuable rewards. Cognosphere, operating as HoYoverse, did not admit to any wrongdoing, according to the FTC.