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The State of New York has taken the publisher of Counter-Strike 2 and Dota 2 to court over the boxes its players pay to open. On Wednesday, February 25, 2026, Attorney General Letitia James announced a lawsuit against Valve Corporation, alleging that the company promotes illegal gambling through three of its games: Counter-Strike 2, Dota 2 and Team Fortress 2.
The complaint was filed the same day in the Supreme Court of the State of New York, County of New York. It runs to 52 pages and 174 numbered paragraphs. What it contains is the state's case, and nothing more than that at this stage: no judge has ruled on any of it. Valve had not responded publicly when Esports Insider last updated its report on February 27.
For the esports market, the case goes to the base of an economy that surrounds two of its largest games: the cosmetic items, known as skins, that players win, trade and resell.
Complaint filed by the New York Attorney General on February 25, 2026, New York County Supreme Court.
What a loot box is, in the state's account
A loot box is a virtual container that a player pays to open, without knowing which item is inside. The complaint lists the names the three games give them: weapon cases in Counter-Strike, Mann Co. Supply Crates in Team Fortress 2 and treasure chests in Dota 2.
Opening one usually requires a key. Most keys cost US$2.49 plus sales tax, the complaint says. In New York the tax adds US$0.22, so a resident pays US$2.71. Some Team Fortress 2 and Dota 2 boxes need no key, but the player still pays the same US$2.49 plus tax to open them.
Related readSuspicious betting alerts in esports: what the IBIA numbers meanThe item that comes out is cosmetic: a weapon finish or a hat that changes how something looks and gives no advantage in a match. The attorney general's press release describes the opening sequence in the most popular of the three games as an animated spinning wheel that comes to rest on one item, and its subhead compares the feature to a slot machine. Which item appears is random, with chances set by Valve, and the complaint says the company deliberately makes some items much harder to obtain than others.
The three elements the complaint has to show
New York's Penal Law defines gambling, in the section the complaint quotes, as staking or risking something of value on a contest of chance or on a future event outside the person's control, with the understanding of receiving something of value if a certain outcome occurs. The state's argument takes those elements one at a time.
- Something of value is stakedThe player buys a key, US$2.71 with tax for a New York resident, to open the box.
- The outcome is left to chanceThe item is selected at random on Valve's servers. The player has no influence on it.
- Something of value is wonThe item can be sold for Steam funds on Valve's own market, and for cash on outside sites.
On the first two elements the filing is brief: a key has a price, and the complaint says the result is produced by a random number generator on the server side. It spends far more of its length on the third, whether a cosmetic item in a video game is something of value in the sense of the law. That is the part of the complaint that describes what happens to an item after it is won.
Where the items go after they are won
The complaint describes two routes. The first belongs to Valve. On the Steam Community Market, the marketplace inside Valve's own store, a player can sell an item to another player. The proceeds land in the seller's Steam Wallet, a balance that buys games, hardware, keys and other items on the platform. Valve takes a 15 per cent commission on each of those sales, according to the filing, which adds in a footnote that the company purportedly limits the sale of a single item to US$1,800.
Related readValve answers New York's gambling suit as a class action is filedThe state argues that wallet funds are as good as money. To make the point, the complaint recounts that an investigator from the attorney general's office sold a skin on the market for wallet funds, used those funds to buy a Steam Deck, the handheld console Valve sells, and then resold the console for US$180 in cash at an electronics store.
The second route runs outside Valve's store. Players can connect their accounts to third-party marketplaces that buy and sell items for cash, and the complaint says some of those sites handle rare items worth tens of thousands of dollars. It points to a link Valve gives each user for trading, and to Valve's own help page, which tells users they can share that link on third-party trading sites.
The filing leans on a few figures to show the scale. It cites a Bloomberg report of March 2025 that put the Counter-Strike skin market above US$4.3 billion, and the sale of one Counter-Strike skin for US$1 million in June 2024. At the other end, it prices a common item at about US$0.13 on the Community Market, and it estimates that about 96 per cent of the items that come out of Counter-Strike cases are worth less than the key that opened them.
On Valve's income, the complaint gives orders of magnitude and no exact sum: billions of dollars in Counter-Strike key sales overall, and tens of millions of dollars in key sales to New York residents alone, plus millions in commissions on items sold by New Yorkers.
Related readBETER Reports eFootball Betting Spiked Around the World CupValve's stated position, as the filing records it
No statement from Valve followed the filing in the first two days. The complaint does, however, set out the position the company has taken in public until now. Valve, it says, has consistently maintained that its user agreement, the Steam Subscriber Agreement, prohibits selling skins outside the platform, and that it acts against trading sites that let users sell items for real money. In a reply to the Danish Gambling Authority quoted in the filing, Valve said such sites violate its terms and that it had banned thousands of automated accounts.
The attorney general's office alleges that practice does not match that position. According to the complaint, Valve enforced its agreement against sites that use skins as stakes in games of chance, but not against marketplaces where items are sold for cash, and in some cases restored the accounts of such marketplaces. These are allegations drawn from the state's investigation; Valve has not yet answered them in court.
A complaint is one side's account, not a finding
The filing opens the lawsuit. It states what New York intends to prove. Valve is entitled to answer or to ask the court to dismiss the claims, and nothing in the complaint has been tested before a judge.
Three claims and a list of remedies
All three claims are brought under Executive Law section 63(12), the provision that lets New York's attorney general sue a business for repeated illegal acts. Each one rests on a different rule against gambling.
| Claim | Rule cited | What the state alleges |
|---|---|---|
| First | New York Constitution, Article I, section 9 | Loot boxes are gambling that falls outside every exception the constitution allows. |
| Second | Penal Law section 225.05, promoting gambling in the second degree | Valve advances gambling by creating the boxes and profits from it through key sales. |
| Third | Penal Law section 225.10, promoting gambling in the first degree | Valve accepts bets from the public as a business, which the law calls bookmaking. |
Complaint of February 25, 2026. The second offense is a class A misdemeanor and the third a class E felony under New York law.
For the third claim the complaint alleges that Valve repeatedly received more than five bets totaling more than US$5,000 in a single day, the threshold it attaches to bookmaking in the first degree.
The relief the state requests is broader than the three lines of the attorney general's announcement, which spoke of stopping the features, disgorging gains and paying fines. The prayer for relief asks the court for a permanent injunction, an accounting of the money New York consumers lost, restitution and damages with interest, and disgorgement, meaning the handing over of all money obtained through the practices. It also asks for a fine of three times Valve's gain under Penal Law section 80.10, and for US$2,000 in costs. The complaint names no total figure.
Related readBrazil's betting law from 2018 to 2026: legalization to provisional banThe filing does not demand a jury trial.
Why the state stresses young players
The attorney general's announcement frames the case around minors. "Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people," James said in the release.
The complaint supports that framing with two kinds of material. The first is about access. Valve's user agreement sets a minimum age of 13, and the complaint says that creating an account requires only ticking a box to confirm that age, with no verification. The second is research: the filing cites a study published in April 2021, a paper of June 2025 and a bulletin of April 2025 from New York's addiction services office, among others. The press release adds that children introduced to gambling are four times more likely to develop a gambling problem later in life, without naming the study.
The filing also reaches into the competitive scene to make the point about age. It says many well-known players of the three games began before they were 13, and that more than half of the 22 players on the top five Counter-Strike academy teams, which the filing likens to the academies of top soccer leagues, are 18 or younger.
Three years of contact, and a rule change already made
The lawsuit did not arrive without warning. The complaint states that the two sides signed tolling agreements, contracts that pause the legal deadline for bringing a claim, covering the period from April 5, 2023 to February 6, 2026. The suit was filed 19 days after the last of them ended.
During that period Valve changed two things in Counter-Strike that touch the same ground. In September 2025, an update introduced the Genesis Uplink Terminal, a feature that offers the player skins to buy directly at a set price, as Esports Insider and HLTV both recalled; HLTV described it as a move away from loot boxes. In December 2025, Esports Insider added, Valve updated its Tournament Operating Requirements, the conditions organizers accept to run Counter-Strike events, to stop teams and organizers from promoting third-party skin gambling and case-opening sites through broadcast and jersey logos. Neither change is mentioned in the complaint.
New York is not the first authority to look at the question. HLTV noted that the Dutch gambling regulator classified paid loot boxes as gambling in 2018, that the decision was overturned in 2022 while case opening stayed restricted in the Netherlands, and that in October 2025 a committee of the European Parliament adopted a report recommending a ban on loot boxes for players under 16.
The sources give no date for a first hearing. The next step on the record is Valve's: a response in court, or a public statement on a case that, for now, has only been told by the plaintiff.
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