New York Attorney General Letitia James has accused Valve of promoting illegal gambling through its video games in a lawsuit filed by her office. According to the AG’s announcement, her office conducted an investigation and had concluded that Valve enabled gambling by enticing users to pay for a chance at rare items from loot boxes in Counter-Strike 2, Team Fortress 2 and Dota 2. In the lawsuit, the New York AG stressed that Valve’s loot boxes are “particularly pernicious,” because the games are popular among children and teenagers.

The lawsuit described the loot box model, which requires a player to open a mystery chest for the possibility of winning rare items, as “quintessential gambling.” It argued that people introduced to gambling at an early age are at a significantly higher risk of developing gambling addictions later on, based on research. In addition, it explained that gambling is mostly illegal in New York.

Players have to pay for chests or boxes and the keys to be able to open them in Valve’s games, and the company has reportedly sold billions of dollars’ worth of keys for Counter-Strike alone. The lawsuit said that Valve has made tens of millions of dollars in fees from the sale of virtual items on the Steam Community Market, as well. In addition to being able to sell items on Steam for funds directly credited to their Steam Wallet, players can also sell on third-party marketplaces for cash.

According to James’ office, Valve facilitates and even assists third-party marketplaces in their operations, based on its investigation. Engadget has asked Valve for a statement about the lawsuit, but we have yet to hear back. However, the company previously denied being involved with third-party marketplaces that allow the sales of its game items for real-world money. In a response to an inquiry by the Danish Gambling Authority, Valve explained that those third-party websites create sock puppet accounts to sell and receive items on Steam in exchange for cash. “[T]his behavior is in violation of our terms of service,” Valve said.

The lawsuit also pointed out that there’s a huge market for Counter-Strike skins and referenced a Bloomberg article from 2025, which reported that the market for those skins had already surpassed $4.3 billion. As an example of in-game items sold for real money, it cited the sale of a Counter-Strike 2 AK-47 skin in 2024 for $1 million. The Attorney General’s Office wants the court to stop Valve from violating New York laws, to give up money it allegedly earned from illegal activities and to pay a fine three times what it allegedly earned from illegal business practices.