It was only a matter of time until it happened. Following last week’s events involving unregulated virtual betting site CSGO Diamonds admitting to fraudulent advertising, a class action lawsuit sheds more light on Valve’s dirty secret. The video game giant must finally answer for it’s role in allowing unregulated and underaged real-money gambling to take place on it’s platform. While Valve will likely sweep this case under the rug, it puts the spotlight directly on an issue that has gone unquestioned for years. It’s time to take a look at the Valve underaged gambling problem.
The Class Action Lawsuit
A class action lawsuit was filed Thursday in a Connecticut District Court. Michael John McLeod claims to have been gambling on fully unregulated Counter Strike: Global Offensive (CSGO) betting sites since 2014. The lawsuit states that Valve has been violating multiple gambling laws due to profiting off these third-party operations. The class action suit does not specify exactly the demand value, nor does it state the extent in which he gambled on these sites. While the details of this class action lawsuit have yet to come out, we can start to put the pieces together. In this article we will explore the negligence Valve has shown towards allowing unregulated and underaged gambling to take place on it’s platform. On top of this, we will look at the various ways Valve has been profiting off the existence of these third-party sites.
Why CSGO Gambling is Criminal
As someone who reviews offshore American betting sites, I believe it is important to contrast the differences in operating practices between real currency and virtual item gambling. Offshore “real money” sportsbetting sites like Bovada and 5Dimes (that accept American customers) are located in countries where gambling is legal and regulated. While bettors from the United States must still use them at their own caution, you can at least expect certain regulations to be met. All customers are required to verify that they are at least 18 years of age before depositing or withdrawing their funds. This is done by scanning a picture of your ID (drivers license, passport), and sometimes even a utility bill or bank statement. On top of this, customers provide proof of credit card ownership in order to avoid fraud. All of the reputable offshore betting sites are reliable with their payouts or else their gambling license will be revoked. There are standards:
The same cannot be said when it comes to CSGO gambling. You are not required to verify your age in order to deposit or withdraw your funds. Only a handful of sites even require you to check off a box indicating that you are at least 18 years old. A large percentage of their users are in their early teens. None of these unregulated betting sites ever message their customers asking them to prove that they are of legal gambling age. The only thing you need to do is link your Steam account and you are ready to go.
These criminal unregulated betting sites attempt to draw a difference between virtual items and real money. When you deposit your skins into one of these underaged gambling sites, you will be given the market value equivalent in the site’s “currency” of choice. They typically use some form of gem (emeralds, diamonds, rubies). At the end of the day, there is no difference between this and obtaining poker chips at your local casino. There is a distinct real-world monetary value attached to the fictional currency.
I have also seen some of these unregulated gambling sites attempt to make the case that just because someone has expensive CSGO skins, does not mean they paid real money for it. For those of you who do not know much about CSGO, I will give you a brief explanation. When you complete competitive matches in-game, you have a chance at obtaining skins or cases. Apart from a few exceptions, nearly all of the skins you obtain have a market value under $0.30 USD. So let’s cross that option out. The cases you obtain typically have a market value under $0.10 USD. Cross that one off as well.
99.9% of skins that are worth significant money are obtained through case openings. You can purchase keys for a flat $2.50 USD rate directly from Valve in order to receive a skin from that case edition’s collection. Some are worthless, others rare. This fixed key value along with varying drop rates is what keeps CSGO skins at reasonably high prices. So let’s not waste anybody’s time with the argument that virtual skins do not have any direct monetary value. We are not that stupid.
No Skin Purchasing Age Restriction
I wanted to throw this one in here in the event that readers are curious how underaged gamblers fund their Steam accounts and CSGO inventories. There are a variety of different ways to purchase skins (or keys). You can go directly through the Steam marketplace funded by either a credit card or PayPal. Anybody can head down to the local store and use their savings to buy a prepaid VISA or MasterCard gift card to fund their account. They can also make an unverified PayPal account without providing any form of photo ID. This keeps fuelling Valve underaged gambling due to easy access.
However if you purchase them off-site on marketplace websites or forums, you can get between 65-75% off the market price. These sites accept a variety of payment methods, most of which are PayPal and Bitcoin. We already know that underaged users can still operate PayPal accounts due to that company’s ineptitude, but the booming cryptocurrency should concern some individuals. If used correctly Bitcoin is entirely anonymous with no restrictions. We see how all of these payment methods are wide open for underaged gamblers to get money directly from their savings accounts into their sportsbook balances.
Valve Underaged Gambling Reasoning
Valve has a dog in the race. Besides adding to the hype of their video games, they earn a percentage off all weapon skin sales (on top of the prices of case keys). The greater the flow of virtual items, the more money Valve rakes in. These unregulated betting sites help maximize the flow of items. Allowing underaged users to participate bumps it up even further. It is far too late for Valve to plead ignorance on this issue as well. Many reports indicate that they have provided technical support, advice, and money to these unregulated and underaged gambling sites. They do the same for third-party marketplace websites that sell off the betting site earnings (which are where they earn their commission). The trade bots that keep these sites running operate on Valve’s platform. They know exactly what is going on, and it appears they want to get away with it as much as possible.
Valve Underaged Gambling Timeline
Things are finally starting to fall into place. Two months ago mainstream media picked up on the money involved in CSGO gambling when Bloomberg published their investigation into the shady industry. Then the strange incident involving both CSGO Diamonds and mOe coming clean about willingly creating fraudulent advertising in order to attract more underaged gamblers to their website with promises of unrealistic win percentages. After it was revealed that mOe received $91,000 in Bitcoin to keep quiet, everyone has their eyes fixated on unregulated video game gambling. This lawsuit is the next step, and I forecast the time between them will get shorter and shorter as we move forward this summer.
What Will Happen
I am making the prediction that nothing substantial will happen from this lawsuit. The details are foggy, and it is still early enough for Valve to squash this. But what is important is that Valve’s disgraceful activities are finally getting the attention of mainstream media. People are getting wind of the Valve underaged gambling sites. The artillery has yet to be deployed against them. It is coming, and it is going to be ugly. Underaged gambling is very dangerous, and Valve is letting hundreds of thousands of children deplete their savings accounts in order to develop a nasty habit. Both Valve and the owners of these unregulated CSGO gambling sites are going to be hit hard. It’s time to put an end to the Valve underaged gambling problem.