The Washington State Gambling Commission has told Valve it must “immediately stop” allowing the transfer of CS:GO weapon skins for gambling purposes through its Steam API. That notification was issued today, and gives Valve until 14 October to explain how the company is in full compliance of Washington State’s gambling laws.
In the press release, it is revealed that the WA Gambling Commission have been in contact with Valve since February 2016. At that time, the commission (in its own words) was seeking to establish whether the practice of CS:GO players using weapon skins to engage in online gambling was in contravention of state law. Since that time, third-party websites making use of the Steam API and allowing online gambling of CS:GO skins have attracted a great deal of attention.
The issue made headlines across games media in July, when YouTube users Trevor ‘TmarTn’ Martin, Tom ‘ProSyndicate’ Cassell, and a third person going by ‘JoshOG’ were caught out advertising the third-party site CSGOLotto through their channels, without disclosing their ownership of that site. Prior to this, Valve were already facing a lawsuit pertaining to CS:GO gambling started in June by Connecticut resident Michael John McLeod. That lawsuit has today been dismissed.
A second lawsuit brought by a resident of Florida against Valve is still ongoing.
The Washington State Gambling Commission states that it “expects Valve to take whatever actions are necessary to stop third party websites from using “skins” for gambling through its Steam Platform system, including preventing these sites from using their accounts and “bots” to facilitate gambling transactions.” Valve had already been spurred into some action in this area, sending out cease and desist letters in mid-July 2016 to certain (but not all) CS:GO gambling sites that were making use of their Steam API.
“Skins betting on esports remains a large, unregulated black market for gambling. And that carries great risk for the players who remain wholly unprotected in an unregulated environment. We are also required to pay attention to and investigate the risk of underage gambling which is especially heightened in the esports world. It is our sincere hope that Valve will not only comply but also take proactive steps to work with the Commission,” says WA Gambling Commissioner Chris Stearns.
If Valve is unwilling or unable to adequately explain how CS:GO skins gambling involving use of the Steam API before 14 October, the Washington State Gambling Commission may take “additional civil or criminal action” against the company. Gambling in the US is regulated at both the State and Federal level, so it’s important to keep in mind that this action applies only to WA (unless other State Gambling Commissions follow suit). Valve are, however, situated in Washington State.
Update: Here is the actual letter sent to Valve by the WA Gambling Commission.