New York Attorney General sues Valve for gambling law violations

New York Attorney General Letitia James is suing game publisher and developer Valve for “illegally promoting gambling through video games,” naming Counter-Strike 2, Dota 2, and Team Fortress 2 in the lawsuit.

Filed on February 25th, 2026, the lawsuit follows an investigation conducted by the Office of the Attorney General. It alleges that several Valve titles encourage gambling through the use of paid loot box mechanics.

Within the lawsuit, James intends to “permanently stop Valve from promoting gambling features in its games, disgorge all ill-gotten gains, and pay fines for violating New York’s laws.”

She also alleges that Valve enables players to sell items earned from loot boxes on a range of third-party platforms where items are sold for cash.

The lawsuit references several studies that connect loot boxes to problem gambling. According to the American Psychiatric Association, ‘gambling disorder has been shown to carry the highest suicide risk out of any other substance use of addictive disorder.’ It also highlights that the risks are higher for children and young adults, with loot boxes making them susceptible to developing problem gambling habits.

“Valve, a video game developer, has made billions of dollars by letting children and adults illegally gamble for the chance to win valuable virtual prizes,” wrote James on social media.

“These features are addictive and harmful. That’s why I’m suing to stop Valve’s unlawful conduct and protect New Yorkers.”

The loot box mechanic is a system in which prizes earned from loot boxes are decided at random using odds determined by the publisher, making some items more valuable than others. Some items are extremely valuable, with some Counter-Strike skins selling for thousands on the Steam Marketplace and third-party platforms.

In September 2025, the Show Off update for Counter-Strike 2 introduced the Genesis Uplink Terminal as a new method for players to obtain skins. Instead of players purchasing a case and a key to open it, the Terminal allows players to choose from five skins and choose whether they want to purchase them for a set price.

The Terminals bypasses loot boxes that have been restricted in the Netherlands, Belgium, and France in recent years.

Valve has also taken action against third-party skin gambling and case-opening websites, preventing them from using its intellectual property. December 2025 saw the publisher update its Counter-Strike Tournament Operating Requirements (TOR), stopping esports tournament organisers and esports organisations from promoting these websites through logos placed across broadcasts and player jerseys.

Valve has yet to issue a response to the lawsuit.