New York Attorney General Letitia James has sued Valve Corporation, a video game developer, for illegally promoting gambling through video games popular with children and teenagers.
The lawsuit claims that Valve’s video games, including Counter-Strike 2, Team Fortress 2, and Dota 2, enable gambling by enticing users to pay for the chance to win a rare virtual item of significant monetary value.
In Valve’s most popular game, the process resembles a slot machine, with an animated spinning wheel that eventually rests on a selected item. The randomly selected virtual items have no in-game functionality but can be sold online for real money, with one item reportedly selling for more than $1 million.
The lawsuit alleges that Valve has made billions of dollars by luring its users, many of whom are teenagers or younger, to gamble in hopes of winning expensive virtual items they can cash in.
The lawsuit seeks to permanently stop Valve from promoting what it claims is illegal gambling to pay disgorgement and fines for violating New York gambling laws.
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“Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people,” James said in a statement. “Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes. These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers.”
Valve is a developer, publisher, and distributor of video games and the operator of a platform called Steam, which allows users to download its games, including Counter-Strike 2, Team Fortress 2, and Dota 2. The lawsuit alleges that Valve enables gambling through these games by charging users for the chance to win a rare virtual item by paying to open a virtual container known as a “loot box.”
New York v Valve Corporation Complaint 2026 by scott.mcclallen
The lawsuit compares virtual loot boxes to a slot machine and Valve to a casino. The lawsuit claims that the value of skins and other cosmetic items in the game have increased recently and said that in March 2025, it was reported that the market for Counter-Strike skins had surpassed $4.3 billion.
Valve allows users to cash in on the virtual items they have won in two ways. Users can sell the items they won through Valve’s own virtual marketplace, the Steam Community Market, where they can use the proceeds to buy other video games, video game hardware, and other virtual items.
Users can also connect their Valve accounts to third-party marketplaces where the virtual items can be sold directly for cash. The OAG’s investigation found that Valve facilitates and even assists these third-party marketplaces in their operations. The virtual items have attracted thieves seeking to steal rare items, the lawsuit said.
The lawsuit said that Valve has received hundreds of thousands of support requests from users reporting that their Steam accounts had been hacked, or that they had been tricked into transferring items to a bad actor.
This matter is being handled by Assistant Attorney Generals Marc Montgomery and Alexandra Hiatt, Data Security Analyst Nishaant Goswamy and Senior Enforcement Counsel Jordan Adler under the supervision of Bureau Chief Kim Berger and Deputy Bureau Chief Clark Russell, of the Bureau of Internet and Technology. The Bureau of Internet and Technology is a part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.
