Washington tribe files lawsuit against Valve Corporation

17 April 2019

Washington State-based tribal casino operator the Quinault Indian Nation has accused Valve Corporation of facilitating illegal gambling on its online video games distribution platform Steam in a lawsuit.

The tribe, which operates the Quinault Beach Resort and Casino in Washington, claims that Valve, also based in the state, has facilitated skin gambling, where players use virtual items as collateral for placing bets, for years.

Valve was previously targeted by a class action suite for allegedly allowing skin gambling on its platform in 2016, though this case was ultimately dismissed. In July that year, it moved to ban third party sites from offering skin gambling via the Steam platform’s OpenID API (application protocol interface).

However the Quinault Nation claims that its measures were “incomplete and ineffective”, going on to allege that Valve was aware of the accounts used by gambling sites to process bets, and took no action. These mainly facilitated betting on the popular title Counter-Strike: Global Offensive, it says.

The tribe goes on to say that Valve also provided technical support to skin gambling sites, while also refusing to shut down features used by such sites including free trading and gift trading, and refusing to blacklist offenders.

It also claims that Valve itself offered a form of gambling with a virtual key, which users could purchase for $2.50. This, the tribe says, allowed users to unlock virtual crates for the chance to win items much more valuable than the key itself, and had the look, feel and sounds more commonly associated with slot machines.

The Quinault Nation claims that Valve’s conduct violates its rights set out under its gaming compact with the state of Washington. Furthermore, it adds, Valve is engaging in unfair competition with the licensed, regulated and taxed tribal casino.

It is looking to have Valve barred from offering the key game until the Washington Gaming Commission has determined whether it requires a licence to do so, as well as having certain trading features offered on Steam suspended or eliminated.

The tribe is also looking for damages. While it does not set a figure, it says that the sum - should it prevail in the lawsuit - should cover “all monies wrongfully obtained by the defendant”.

In related news, the Interactive Software Federation of Europe (ISFE), the trade body representing Europe’s video games industry, has called on gambling regulators to follow the example of Danish regulator Spillemyndigheden by banning skin gambling.

Earlier this month Spillemyndigheden revealed that it had successfully petitioned Danish internet service providers to block access to 15 skin betting sites as part of an ongoing crackdown.

“We call on gambling authorities across Europe to follow the example of the Danish Gambling authority to further support efforts to stop illegal practices such as ‘skin betting’ where third party gambling sites allow consumers to bet and trade on virtual items,” ISFE chief executive Simon Little said. “Video games businesses do not allow, facilitate, or condone the conversion of virtual items or currencies  into money or the use of them outside the game such as within unlicensed third-party gambling sites.”

Little said that the video games sector was currently funding education campaigns across Europe to make parents aware of the importance of responsible gaming, the dangers of skin betting and unauthorised trading of virtual goods.

This, he said, would ensure parents would be able to have informed discussions with their children about the issue.