Valve Public Silence in Wake of Gambling Scandal ‘Unconscionable’

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The fallout from a scandal involving popular YouTubers failing to disclose their ties to an online gambling site continued Wednesday with a lawyer representing a player suing the game developer over “illegal gambling” saying that Valve’s public silence is “unconscionable”.  The company is responsible for the development of the popular video game Counterstrike: Global Offensive.

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From Polygon:

Jasper Ward, who conducted an email interview with Polygon this week, is one of several attorneys representing a player who filed a lawsuit against Valve late last month accusing the company of allowing an illegal online gaming market to grow up around the shooter and its use of weapon skins. He is also one of the lawyers representing another player, this one underage, who filed a second suit against Valve about a week later.

In both cases Valve is being accused of deliberately allowing the creation of a market where players and third-parties trade weapon skins like casino chips, Brian Crecente of Polygon reports.

"In sum, Valve owns the league, sells the casino chips, and receives a piece of the casino’s income stream through foreign websites in order to maintain the charade that Valve is not promoting and profiting from online gambling, like a modern-day Captain Renault from Casablanca," the suit alleges. "That most of the people in the CS:GO gambling economy are teenagers and under 21 makes Valve’s and the other Defendants’ actions even more unconscionable."

In this case, Ward says, Valve "created and is profiting from an online gambling ecosystem that, because it is illegal and unregulated, harms consumers, many of whom are teenagers.

"Parents don't know this is going on and can't talk to their kids about it because the gambling chips are called ‘Skins’ and it seems like just another in-game purchase."

Ward, who also represents consumers in a case against Daily Fantasy Sports juggernauts DraftKings and FanDuel, added: "Valve is like a bar owner who lets people set up roulette wheels and blackjack tables in the back, sells chips to teenagers on their way in the door, and then makes people cash out at the pawn shop across the street," he said. "Oh, and it has created a new game it owns and on which those kids can gamble, then lets the bookies take bets on it in the corner booth. The fact that it's Valve's server and software instead of a bar, and Steam's API instead of a physical roulette wheel and international websites like OPSkins instead of a pawn shop and Lounge instead of a bookie in the corner booth doesn't change what Valve is doing: it has created a gambling ecosystem out of thin air, and its customers are getting scammed and losing money on rigged websites as a result.”

Valve has remained silent on the matter.

Now enter the scandal involving popular YouTubers Trevor "TmarTn" Martin and Tom "Syndicate" Cassell failure to disclose their ownership interest in the CS:GO Lotto online gambling website.

"The Lotto scandal is a perfect example of how what Valve has created harms consumers," Ward told Polygon. "That, combined with the quote from an anonymous Valve employee in the Daily Dot article talking about how there were rigged roulette sites in Russia, should help shed light on the Skins gambling issues, the position it is putting Valve's customers in of being subject to scams, and prompt some sort of action from Valve.

"Valve's decision to unblock Lotto after this is mind boggling and I look forward to getting answers from Valve's key decision makers on that. Or even a quote on the record from someone at Valve about the Skins gambling economy would be a good start. Valve's public silence while privately helping gambling sites operate in the Steam Marketplace is unconscionable."

The Daily Dot cites a number of esports-industry figures claiming the lawsuit is fundamentally flawed for these reasons:  

- Valve has been “complicit in creating, sustaining, and facilitating” an illegal gambling market based on skins.

- Valve “has an ownership interest, partnership or otherwise a direct business relationship” with csgolounge, one of the largest skin gambling sites.

- Valve collects 15 percent of the money from skins sold in the game.

- Most of the people in the "CS:GO gambling economy" are minors.

The first claim, that Valve is complicit in sustaining illegal gambling, was disputed by a Valve employee, who spoke to the Daily Dot on condition of anonymity: Valve’s complicity in creating, sustaining, and facilitating skin-betting platforms “is simply an OpenID authentication that lets ANY site use the Steam API as an authenticated Steam account, used by many more sites than the defendants,” he said.

According to Bryce Blum, in-house counsel for Unikrn, this also calls the “ownership” claim into question. “I’m not aware of any evidence that Valve either directly profits from this illegal gambling activity or that it conducts, finances, manages, supervises, directs, or owns all or part of the illegal gambling business,” he said.

“It doesn't seem like Valve are willing to act,” said Luke Cotton, a gambling analyst based in the U.K. “If anything, Valve might be scared into inaction. Shutting down the API “might look bad for the purpose of the case.”

- Aaron Goldstein, Gambling911.com

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