Video Game Maker Valve Denies Role in Illegal Online Gambling

  • Washington State regulators sent a cease-and-desist letter
  • Valve says it is ‘happy to cooperate with the Commission’

Video game maker Valve has rejected claims from regulators in Washington State that it facilitates illegal gambling, but says it is willing to cooperate with efforts to curtail betting on sites that use virtual items from Valve video games as currency.

The gambling at issue takes place on independent websites that are mostly small and based overseas. Bettors access accounts on Valve’s Steam platform, a sort of iTunes store for PC gamers, to place wagers using virtual items. The biggest site, CSGO Lounge, handled about $1 billion in bets in the first seven months of the year, according to a report for Narus Advisors by Legal Sports Report analyst Will Green.

In recent months, the company, based in Bellevue, Washington, has taken action against the gambling sites. The state gambling commission has made clear those steps weren’t enough, a position that echoes a common opinion in the video game industry that this form of gambling couldn’t exist without Valve’s implicit approval.

Valve rejects this argument. “We do not understand the legal or factual reasoning supporting this position, from the Commission’s letter or from our conversations with the Commission,” wrote Valve attorney Liam Lavery in a response to a cease-and-desist letter sent by the state gambling commission. “If there is a specific criminal statute or regulation you believe Valve is violating, please provide a citation.”

Both the commission’s letter and Valve’s response point to a conversation that has ground to a halt. Valve refused to answer questions from regulators after an initial meeting in February, the commission complained in its letter, which was dated Sept. 27 but released publicly on Oct. 5. In its response, Valve alludes to a conference call on Oct. 3.

The commission didn’t immediately respond to a request for comment.

Valve says the gambling sites are operating without its knowledge or consent, and that it shuts them down when it can. But the gambling operators can reopen new accounts when Valve shuts off their previous ones. “We would be happy to cooperate with the Commission, if it is able to identify more skins gambling sites that are illegal in Washington and the Steam accounts through which they operate,” wrote Lavery.

Before it's here, it's on the Bloomberg Terminal.