Game Maker Accused of Promoting Gambling

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‘     NEWARK, N.J. (CN) — A large online video game company allowed and sponsored illegal gambling by creating a real-world gambling regime hidden in a gaming black market, according to a number of recent class-action lawsuits.
     The lawsuits, which have so far been filed in Federal Court in Florida, Connecticut and New Jersey, allege the online gambling regime was created by Washington state-based online competitive video game company Valve Corporation, which plaintiffs likened to a modern-era Captain Renault from the movie Casablanca.
     Valve, which organizes several competitive online gaming leagues, allegedly sold its users chips, known as “skins,” which could then be used as weapons in its “Counter-Strike” game, which has grown to nearly 400,000 players worldwide.
     The skins could be traded and converted into cash like casino chips, or they could be traded for similar online currency, such as virtual diamonds or lotto tokens, through one if Valve”s other sites, according to one class action filed Thursday in New Jersey Federal Court.
     The most expensive skin is priced around $300, according to gaming sites.
     However, unlike casino chips, Valve took no risk by selling them and made a 15 percent fee during each sale through its marketplace, Thursday”s lawsuit alleges. Further, the complaint states, Valve filtered its income through several foreign websites “in order to maintain the charade that Valve is not promoting and profiting from online gambling.”
     “To put it another way, Valve is the barkeeper who allows illegal gambling operators to set up shop in its backroom and sells chips for a fee to customers on their way in, but claims it is powerless to stop the illegal gambling racket and benefits from having a packed house every night,” the 58-page lawsuit states.
     Lead plaintiff Jayme Reed says some of the sites had no age verification process, which meant minors could use the site to make illegal bets for fake chips that could later be converted into real currency.
     “That most of the people in the [defendants”] gambling economy are teenagers and/or under 21 make Valve”s and the other unnamed co-conspirators” actions even more unconscionable,” the lawsuit states.
     The first class-action lawsuit against Valve was filed last month in Connecticut. A second was filed this week in Florida by the parent of a gamer, while Reed”s complaint is the most recent.
     Reed claims to have entered into skins transactions since 2012. All three lawsuits contain similar allegations.
     Others have been caught up in the legal furor. Gaming YouTubers Tom Cassell and Trevor Martin, who are known online as ProSyndicate and TmarTn, respectively, were added as defendants in the Florida lawsuit for their alleged involvement in promoting an online gambling site without disclosing it to fellow gamers. They also are named as defendants in the New Jersey class action.
     Valve”s “Counter-Strike” first-person shooter game series was introduced in 1999. In 2012, the company released “Counter-Strike: Global Offensive,” in which players could purchase skins through the company”s faux black market “Arms Deal” to upgrade to rare weapons or armor.
     The faux black market was set up through its online gaming platform Steam, which takes a 10 percent cut of skins sales related to “Counter-Strike; Global Offensive.” Valve takes another 5 percent commission on all sales through the market.
     Thursday”s lawsuit cites Valve employees, who had been quoted at a 2014 gaming developer”s conference as saying that skins were created as a way to further engage players to participate in a robust trading market.
     “This is not an accident. This is by design,” the employee is quoted as saying.
     The class action also states that Valve is “well aware of the skins gambling that goes on,” as the company has refused to remove the trading option on the skins. The company also has warned players about fake gambling bots that attempt to steal skins, the lawsuit states.
     Valve has made more than $567 million in revenue from “Counter-Strike: Global Offensive,” according to the lawsuit.
     The company is also well-known for developing the “Half-Life” and “Left 4 Dead” series. It developed its online gaming platform Steam in 2002, which has since grown to offer thousands of games.
     An email seeking comment from Valve Managing Director Gabe Newell was not immediately returned Friday.’