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.
Valve and Commission have been in contact since February of this year, attempting to ascertain a solution to the inherent problems and exploitation brought about by skin trading. 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. 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.
The WA Commission had the following to say about the Skin trading industry:
“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,”
In other CS:GO related news, CSGO Lotto, the site quietly owned by YouTube users Trevor Martin, Tom Cassell and ‘Josh OG’, has won a Motion to Dismiss the class action gambling lawsuit initially brought against Valve (expanded to include GSCO Lotto) by Michael McLeod.
This appeal is crucial for the owners of the site in avoiding a huge volume of legal damages being lodged against them. If the motion had failed and the plaintiff had succeeded in getting the case to a Federal court, Racketeer Influenced and Corrupt Organizations Act (RICO) and Class Action Fairness Act (CAFA) litigation may have ballooned the damages to more than $5 Million. It was this number that ultimately doomed the effort to prosecute federally. The court rejected the “common sense” argument presented by the plaintiff to demonstrate a damage amount in excess of $5 Million.
It’s still possible for the plaintiffs to appeal the ruling. They may also attempt to take the lawsuit to a state court instead of a federal one, but only if the economics of the suit continue to make sense (ie; if they think they can fund it, or see a likely avenue to recoup attorney fees).
All in all, the controversy surrounding CS:GO and it’s gambling problem is far from over, and is likely to only get worse for those profiting from the trade as time goes on.