Washington State Gambling Commission acts in eSports betting row

Seattle-based Valve, the publisher of eSports game Counter-Strike: Global Offensive, was on the receiving end of a cease-and-desist letter from the Washington State Gambling Commission Wednesday as the regulator moved to crack down on the multi-billion online gambling market that uses skins (decorative game accessories and weapons) for gambling purposes.

It was a turn-about for Valve, which itself issued 23 cease-and-desist warnings to skin betting sites earlier this year, claiming they were violating its terms of service (see previous reports).

The WSGC pointed to the abusive use of the skins, which can be earned in virtual games or bought through Valve’s Steam platform. Users can also trade skins for cash on third party sites or use them to place bets on other websites, most of which rely on Valve’s software.

WSGC Commissioner Chris Stearns said in a press statement Wednesday:

“In Washington, and everywhere in the United States, skins betting on sports remains a large, unregulated black market for gambling. And that carries great risk for the players who remain wholly unprotected in an unregulated environment.”

The cease-and-desist letter to Valve CEO Gabe Newell was signed by Commission director David Trujillo and claimed the company had not responded to requests for more information by the WSGC after a meeting in February this year.

The letter goes on to warn Valve that failure to comply with state gambling laws can result in the seizure of any property or assets related to illegal gambling activity.

The Commission appears to feel that the measures taken against skin betting sites by Valve are insufficient, and that this form of gambling activity would not be possible without Valve’s implicit approval.

It has been claimed that Valve benefits, albeit indirectly, from betting activity; betting drives demand for the skins, which can be purchased from Valve-Steam, and also increases interest and participation in the company’s games and events.

Observers have opined that Valve could shutter skin betting by restricting access to the Valve software that allows websites to trade skins.

Valve has until October 14 to respond to the WSGC’s latest communication..