Valve Moves to Shut Down Counter-Strike Gambling Sites
The skin-gambling industry is worth billions.
Valve recently made it clear that it intends to halt the operation of sites that facilitate gambling through Steam. It's now taken the first steps toward shutting those sites down, or at least forcing them to dramatically modify how they work.
The company has sent cease-and-desist letters to the owners of 23 different websites (see them all at the bottom of this post) that enable gambling through various games, most commonly Valve's Counter-Strike: Global Offensive. That letter (via Game Informer) has since made its way online.
"We are aware that you are operating one of the gambling sites listed below," it states. "You are using Steam accounts to conduct this business. Your use of Steam is subject to the terms of the Steam Subscribers Agreement ('SSA').
"Under the SSA Steam and Steam services are licensed for personal, non-commercial use only. Your commercial use of Steam accounts is unlicensed and in violation of the SSA. You should immediately cease and desist further use of your Steam accounts for any commercial purpose. If you fail to do this within ten (10) days Valve will pursue all available remedies including without limitation terminating your accounts."
This move makes good on a promise made by Valve earlier this month to "start sending notices to these sites requesting they cease operations through Steam, and further pursue the matter as necessary." In response to allegations that Valve was profiting from the skin-gambling, it also stated it has "no business relationships with any of these sites."
Gambling for in-game items--something like Counter-Strike weapon skins--might sound innocent, but it is in fact quietly a huge industry. A Bloomberg report from April cites research firm Eilers & Krejcik Gaming, which estimates that $2.3 billion in skins were wagered on esports in 2015. A new report suggests the industry could have seen the total value of wagers rise to $7.4 billion this year. Keep in mind that many of the people involved in this are underage, and losing thousands of dollars through these sites is not uncommon.
A lawsuit was recently filed against Valve alleging that it "knowingly allowed ... and has been complicit in creating, sustaining, and facilitating a market" where Counter-Strike skins can be gambled. It claims the company did this by providing these sites with access to Steam accounts. As noted above, Valve has denied it has a relationship with the sites in question, but an influx of people purchasing skins to gamble would have put money in Valve's pockets.
The issue of Steam gambling came to a head recently when it was discovered that a pair of YouTube video creators had promoted a Counter-Strike gambling site they owned without disclosing that fact. One of the two, Trevor "TmarTn" Martin, has claimed their ownership was never a secret, yet an earlier video of his sees him talking about discovering the site in a way that suggests no connection.
"We found this new site called CSGOLotto," Martin said in one video. "We were betting on it today and I won a pot ... it was the coolest feeling ever."
Following Valve's statement, Twitch announced that it would no longer allow streams featuring these types of Steam gambling sites. This is because Twitch doesn't permit users to "stream content that breaks the terms of service or user agreements of third-parties."
On a potentially related note, Twitch user James "PhantomL0rd" Varga has seen his channel closed, Eurogamer reports. The reason for this is unknown, as Twitch has declined to comment on the move and Varga himself has been silent. Visiting his channel page--which was one of the site's most popular, with 1.3 million followers--brings up the message above stating that it's been closed "due to terms of service violations" with no further explanation.
As Eurogamer reports, it's possible the move comes as a result of Varga's involvement in promoting a Counter-Strike gambling site he reportedly co-owns without disclosing his relationship to it. At least for now, this remains unconfirmed.
The Steam gambling scene would appear to be on the verge of death. One of the sites Valve's letter was sent to, CSGO2x, has announced on Twitter it will shut down ahead of the deadline, and it's likely others will follow suit. We'll report back on the situation as it continues to develop.
The full list of websites mentioned in Valve's letter follows below.
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