New York Sues Valve Over Alleged Gambling in Video Games

Attorney General claims loot box systems in Counter-Strike 2, Team Fortress 2, and Dota 2 violate state laws.

Published on Feb. 25, 2026

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The New York Attorney General's office has filed a lawsuit against video game company Valve, alleging that the loot box systems in several of its popular games, including Counter-Strike 2, Team Fortress 2, and Dota 2, constitute illegal gambling. The lawsuit seeks to permanently stop Valve from offering these loot box features and to force the company to pay fines and disgorge any ill-gotten gains.

Why it matters

This lawsuit represents a significant escalation in the ongoing debate around the ethics and legality of loot box systems in video games. New York is taking a strong stance that these randomized virtual item reward systems are a form of prohibited gambling, especially given their popularity with minors. The outcome of this case could set an important precedent and influence how other states and countries approach regulating loot boxes.

The details

According to the lawsuit, Valve's loot box systems allow players to purchase 'keys' for $2.49 plus tax to open virtual loot boxes and receive randomly-selected virtual items as rewards. These items can then be sold on Valve's Steam Community Market or third-party marketplaces, with rare items potentially worth thousands of dollars. The lawsuit alleges that this model is 'quintessential gambling' that violates New York's laws, and that Valve has made 'tens of millions of dollars' from these systems while also profiting from commissions on secondary market sales.

  • The lawsuit was filed by the New York Attorney General's office on February 25, 2026.

The players

Letitia James

The Attorney General of the State of New York who filed the lawsuit against Valve.

Valve

The video game company that owns and operates the Steam digital distribution platform, as well as popular games like Counter-Strike 2, Team Fortress 2, and Dota 2 which feature the allegedly illegal loot box systems.

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What they’re saying

“This loot box model that Valve has developed — charging an individual for a chance to win something of value based on luck alone — is quintessential gambling, prohibited under New York's Constitution and Penal Law.”

— Letitia James, New York Attorney General (The Verge)

What’s next

The judge in the case will decide whether to grant the state's request to permanently stop Valve from offering the loot box systems in its games.

The takeaway

This lawsuit highlights the growing scrutiny and legal risks facing video game companies that rely on loot box monetization models, especially in jurisdictions that view these systems as a form of illegal gambling. The outcome could set an important precedent and spur further regulatory action targeting predatory in-game monetization practices.