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Valve finally denounces third-party gambling sites, but doesn’t plan to block them on Steam

After months of silence, Valve has finally stepped up and said something about Counterstrike: Go-related gambling websites and practices. Unfortunately, that’s nearly the only thing it’s done.

First, some background. If you aren’t familiar with how the whole situation has played out, Valve’s most popular games, like CS: Go and Team Fortress 2, now incorporate various mechanics that allow players to spend real-world money on cosmetic items like hats and other cosmetic changes. You can earn cases and item chests through play, but actually opening what you’ve won (and finding out what you got) requires you spend real dollars. These items can then be resold via Steam’s Community Market (where Valve takes a cut of each sale). Items within chests are of varying quality as you’d expect — common items sell for very little, while rare items can be worth hundreds or even thousands of dollars.

CSGo-Gambling

There are two facets to this problem. The first is that Valve’s API allows for third-party clients to create their own websites and then run gambling rings in which people wager skins, hats, and potentially other items on everything from slot games to e-sports matches. Unlike the third-party gambling sites, Valve doesn’t allow players to turn their winnings into real money when they spend cash deposited in their Steam Wallet. If you sell a skin for $150 in the Steam Community Marketplace, you can’t take your winnings and transfer them back to your regular account. This is the issue Valve addressed today in its own update, writing:

In 2011, we added a feature to Steam that enabled users to trade in-game items as a way to make it easier for people to get the items they wanted in games featuring in-game economies.

Since then a number of gambling sites started leveraging the Steam trading system, and there’s been some false assumptions about our involvement with these sites. We’d like to clarify that we have no business relationships with any of these sites. We have never received any revenue from them. And Steam does not have a system for turning in-game items into real world currency.

These sites have basically pieced together their operations in a two-part fashion. First, they are using the OpenID API as a way for users to prove ownership of their Steam accounts and items. Any other information they obtain about a user’s Steam account is either manually disclosed by the user or obtained from the user’s Steam Community profile (when the user has chosen to make their profile public). Second, they create automated Steam accounts that make the same web calls as individual Steam users.

Using the OpenID API and making the same web calls as Steam users to run a gambling business is not allowed by our API nor our user agreements. We are going to start sending notices to these sites requesting they cease operations through Steam, and further pursue the matter as necessary. Users should probably consider this information as they manage their in-game item inventory and trade activity.

The bigger problem is that Valve is still running what amounts to a gambling operation — and it’s not performing any age verification when it does so, as Ars Technica reports. Gamers can spend real-world money to buy item chests with a random chance of finding something good inside, and while the dollar amounts are small, that encourages frequent spending. Other forms of abuse have cropped up as well, including a highly publicized scandal last week in which popular YouTubers who claimed to be ordinary users of a CS:Go gambling site actually owned it — without ever disclosing that fact (the pair has since revised their own videos and taken down others to try and twist the public record). Valve has already been sued for facilitating gambling without a license and for enticing minors to gamble. (PC Gamer has more details on the gambling scandal for those interested.)

I’ve loved Valve games since the original Half-Life. Half-Life 2, Portal, Left 4 Dead — all of these were great titles, and great series. But Valve, with its enormous revenue and critical position as the digital distribution center for most of PC gaming, isn’t really a game developer any more. Not counting The Lab, which shipped as a VR demo for the HTC Vive, Valve hasn’t shipped a new game since DOTA 2 in 2013. CS:Go is four years old, Portal 2 is five, and Left 4 Dead 2 is seven. Team Fortress 2 is nearly nine. Some of these titles are still receiving regular updates and new content, while others, like L4D2, have been mostly limited to some bug fixes and SteamOS support.

Valve doesn’t develop new intellectual property and new games and it rarely builds sequels. Big ideas like Steam Machines and the Steam Controller see an initial burst of furious activity and a corresponding surge in media coverage, then trickle off to nothing over a period of months or years. Valve is a distribution company, which is completely fine — but distribution companies have to pay attention to the way their services are used and exploited if they want to continue to rake in the big bucks. Illegal gambling is something federal authorities take extremely seriously and Valve’s practices could come under serious government scrutiny if the cases against it proceed.

Valve’s announcement today leaves much to be desired. Sending notices to third-parties that what they’re doing is against Valve’s terms of service doesn’t amount to much when Valve could blacklist such sites from taking advantage of its own APIs and terminate their access to Steam’s OpenID system.

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