On February 25, 2026, New York Attorney General Letitia James filed a major lawsuit against Valve Corporation, the creator of the Steam platform and hit games like Counter-Strike 2, Dota 2, and Team Fortress 2.
The lawsuit alleges that Valve’s loot box mechanics are "quintessential gambling" and are designed to exploit children and teenagers.
Key Allegations from the Lawsuit
The NY AG’s office argues that Valve has built a multi-billion dollar empire by essentially operating an unlicensed casino within its games.
Slot Machine Mechanics: The suit highlights the "opening" animation in games like Counter-Strike 2, where a spinning wheel of items slows down to "nearly miss" rare prizes—a psychological tactic used by slot machines to keep players engaged.
Real-World Value: Unlike many other games where items are locked to an account, Valve allows skins to be traded and sold. The AG notes that some items have sold for over $1 million, giving these digital "toys" significant cash value.
Facilitating External Gambling: The lawsuit claims Valve facilitates third-party "skin gambling" sites by allowing users to link their Steam accounts to these external marketplaces, where they can cash out for real money.
Targeting Minors: James cited research showing that children introduced to "harmless betting" by age 12 are four times more likely to develop a gambling disorder later in life.
What the State is Seeking
The New York Attorney General is looking for more than just a slap on the wrist. The filing seeks:
A Permanent Injunction: Stopping Valve from promoting or using these gambling features in its games.
Disgorgement of Profits: Forcing Valve to give up "ill-gotten gains" made from these mechanics.
Significant Fines: Civil penalties and damages, with some reports suggesting the AG is seeking fines up to three times the amount of Valve's profits from these features.
The Context of 2026
This move follows a trend of increasing global pressure on the gaming industry. Just last year (2025), the FTC fined the publisher of Genshin Impact $20 million for similar loot box transparency issues. Valve has recently experimented with "Genesis Uplink Terminals"—which let players see exactly what they are buying—to bypass laws in Europe, but the NY AG argues these changes don't go far enough to protect New Yorkers.
"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." — Letitia James, NY Attorney General