Valve refuses government request to cut off Steam skin trading
Washington State argues Valve is "facilitating" third-party gambling sites.
Kyle Orland - 10/19/2016, 5:44 PM
This summer, as third-party gambling sites trafficking in Counter-Strike: GO skins began attracting public attention, Valve found itself the subject of two civil lawsuits accusing the company of aiding and abetting illegal gambling schemes. Now, Valve has been put on notice about a possible criminal complaint from the Washington State Gambling Commission (WSGC) for "facilitating" gambling activities through Steam.
In a letter sent to Valve earlier this month, the WSGC argued that third-party sites that let players gamble with their in-game skins are "facilitated within Valve Corporation’s Steam Platform" and that the sites "have Steam accounts and use the Steam platform to conduct their gambling transactions." The commission said it "expects Valve to take whatever actions are necessary to stop third-party websites from using 'skins' for gambling through its Steam Platform system" and said Valve risked "additional civil or criminal action" if it did not comply.
Earlier this week, in a response obtained by TechRaptor, Valve pushed back strongly against the Commission's accusations, arguing that merely providing a system for trading skins through Steam doesn't break any specific law. As it has in the past, Valve pointed out that it does not directly profit from this kind of skin trading, does not promote such third-party sites, and does not let users "cash out" their skins for real money.
"The commission's letter publicly threatens Valve with criminal prosecution for gambling on third-party sites," Valve writes. "We do not understand the legal or factual reasoning supporting this position... if there is a specific criminal statute or regulation you believe Valve is violating, please provide a citation."
Valve's letter seems to implicitly acknowledge that it could cut off third-party gambling altogether if it were willing to turn off Steam's skin-trading capabilities and OpenID authentication system altogether. But the company says it sees no reason to cut off the legitimate uses of those services just to block the illegal actions of outside actors.
"The Commission's main argument seemed to be 'Valve could stop this, so it should," the company writes. "In-game items, Steam trading, and OpenID have substantial benefits for Steam customers and Steam game-making partners. We do not believe it is the Commission's intention, nor is it within the Commission's authority, to turn off lawful commercial and communication services that are not directed to gambling in Washington."
Valve also points to its ongoing efforts to shut down skin gambling sites directly, including sending cease-and-desist letters as well as disabling Steam accounts associated with 40 such sites. While Valve acknowledges that it can't always identify the "cleverly designed bots" that facilitate this kind of gambling, it says it is "happy to cooperate with the Commission if it is able to identify more skin gambling sites."
Valve is in a tough position here. Steam may not directly promote or profit from skin gambling, but it does make money off of a "transaction fee" when users buy skins in the first place. And while plenty of users take part in skin trading for legitimate purposes, the feature does easily allow for illegal uses by outside actors (almost like a Xerox machine, in that way). Legal or not, it's unlikely that this will be the last complaint Valve faces for "facilitating" skin gambling.
