Valve Faces Lawsuit Over Video Game Gambling

Valve, the video game company behind the popular Counterstrike: Global Offensive, is being sued for its role in the multibillion-dollar gambling economy that has fueled the game's popularity.

Michael John McLeod, a Fairfield, Conn., man who has been gambling on CS:GO since 2014, filed a lawsuit Thursday in the U.S. District Court in Connecticut alleging that Valve violated gambling laws and engaged in racketeering with a handful of off-shore gambling companies. McLeod is asking for class-action status for the suit, which if granted could extend widely. The complaint, was first reported by Polygon, doesn’t give a specific request for damages and doesn’t spell out exactly how much money he lost by betting on the site.

The lawsuit comes two months after Bloomberg published an investigation into the rise of what's known as skins gambling, an increasingly prominent part of professional video gaming. Though it's poorly understood by people outside the gaming world, bettors will wager some $7.4 billion this year, according to a recent estimate from Eiler & Krejcik Gaming and Narus Advisors. They do so—and skirt existing gambling laws—by betting with virtual goods (decorative weapons called skins) that they can earn by playing CS:GO or can buy directly from Valve. The company allows those goods to serve as chips on independent websites that take bets on the outcome of professional video game matches or that run various casino-style games.