Valve, the company which produced Counter-Strike: Global Offensive, is cracking down on gambling sites associated with CS:GO video game items. Valve's move comes a week after a major scandal ensued involving CSGOLotto, a gambling site which allows people to wager "skins", which are virtual weapons used in Counter-Strike: Global Offensive.
Valve announced this week that players who use third-party gambling sites to collect skins are violating Steam's terms of services. The game design company announced it would start sending letters this week to those third-party sites "requesting they cease operations through Steam".
In making their statements this week, Valve reiterated their assertion that they make no money from the gambling sites which have sprung up involving skins.
Trevor Martin and Tom Cassel
The various public relations and legal reactions are needed, because of an ongoing scandal involving one of the CSGO gambling sites. The scandal involved Trevor "Tmartn" Martin and Tom "Syndicate" Cassel, two Florida men who also own CSGOLotto. Martin and Cassel appeared in dozens of YouTube videos depicting themselves winning skins on their gambling site, though they never revealed their affiliations with their site.
That is a violation of YouTube policies, which require endorsements and advertisements to clearly mark themselves as such. Worse, the YouTube violations also appear to violate Federal Trade Commission (FTC) policies, which means Martin and Cassel might have committed felonies involving their CS:GO website.
Underage Gambling Activities
The negative media coverage over the YouTube videos soon mushroomed into wide-scale criticism of Valve's association with gambling sites. Children as young as 13 can play Counter-Strike: Global Offensive, and there is significant evidence that members of the CSGO gambling sites allowed underage children to bet skins on their sites. If so, such activities would be a major violation of federal gambling laws.
Lawsuits against Valve
Valve has been the target of two lawsuits involving the parents of underage children who gambled on those sites, which are not owned by Valve. Michael John McCleod, a CSGO player, filed a class-action lawsuit against Valve, claiming it "knowingly allowed, supported, and/or sponsored illegal gambling by allowing millions of Americans to link their individual Steam accounts to third-party websites."
Valve denies allegations they profited from the skin-gambling sites like CSGO Lotto. Though Martin and Cassel's website is involved in the current scandal, more successful skin-wagering sites like CSGO Lounge, CSGO Diamonds, and OPSkins are more of a focus in the McCleod's lawsuit.
Company Statement
Erik Johnson released a statement on behalf of Valve which stated, "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."
Johnson, who is described on the Valve website as a 'business development authority', asserted on behalf of his company, "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."
Cease and Desist Letters
Because of the lawsuits, it is certain that Valve knew of the allegations a long time before the scandal over Tmartn's and Syndicate's deceptive testimonials. If Valve's assertions are true, they were not involved in business with Lounge, Diamonds, or OPSkins. Also, Valve does not have the authority to close those businesses and take their domain, nor is it their responsibility to police illegal online gambling.
Still, the sending of cease-and-desist letters this week could leave them open to the question, "Why didn't you do this years ago?"
In the lawsuits, attorneys for the plaintiffs are likely to claim Valve, at the very least, did not do enough to end third-party gambling.
About Valve
Valve has been in game design since 1996. From 1998 to 2004, the company became famous for developing games like Half-Life, Counter-Strike, and Team-Fortress. Since 2004, the company's releases have been on the cutting edge of computer gaming. Valve release three Half-Life 2 editions from November 2004 to October 2007. It also released its 'Source' series: Counter-Strike: Source (2004) and Day of Defeat: Source (2005).
The company has produces games in recent years like Portal, Left 4 Dead, and Team Fortress 2. CS:GO was released in August 2012, while it acquired the license to develop Dota 2, which was released in July 2013.
eSports Impact
Counter-Strike: Global Offense, the original DOTA (developed by Blizzard Entertainment), and League of Legends (Riot Games) are the biggest titles in eSports. DOTA is played at Blizzard Entertainment's BlizzCon, the Asian World Cyber Games, and other major eSports tournaments. It is also played in the Cyberathlete Amateur and CyberEvolution leagues.
If anything, CS:GO has an even bigger impact on eSports. Valve has produced its own set of "Major" tournaments, which it either sponsors or co-sponsors. These majors include a minimum prize pool of $250,000 and involves the play of CS:GO. Twitch.tv, MLG.tv, and ESL television or live stream such events.
Also, Turner Broadcasting and WME/IMG produce ELeague, a TBS show based around a 24-team CS:GO league. The program debuted on May 24, 2016 on TBS.
The teams compete for $1,400,000 in prizes for the season. Top teams in the league include Luminosity (9-1), G2 Esports (8-2), NiP (7-3), Astralis (8-1), Fnatic (8-2), Faze (7-3), Navi (7-2), Virtus Pro (6-3), and EnVyUs (8-1).
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