Loot Boxes Back in Court, as New York AG Sues Valve Claiming In-Game Treasure Chests Are ‘Quintessential Gambling’
Posted on: February 26, 2026, 08:06h.
Last updated on: February 26, 2026, 08:06h.
- New York’s AG is suing Valve over loot boxes
- Letitia James alleges that loot boxes constitute gambling
- Loot boxes allow videogamers to buy keys to virtual treasure chests
New York Attorney General Letitia James has filed a lawsuit against Valve on claims that the video game publisher’s selling of in-game “loot boxes” constitutes illegal gambling.
Valve Corporation, the Bellevue, Washington-based company behind such popular titles as Counter-Strike, Dota, Half-Life, and Team Fortress, is accused of facilitating unlawful gambling through loot boxes. Such in-game digital prize packs allow players to use real money to open the virtual treasure chests on the hopes of securing cosmetic items like character outfits, better weapons and armor, improved character talents and abilities, and in-game currency that can be used to open additional loot boxes.
James alleges that loot boxes expose younger people to the physiological rush of spinning a slot machine. While the FTC last year imposed a rule mandating that children under the age of 16 must have parental consent to purchase a loot box, countless teens remain exposed, James said.
Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people. Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes,” said Attorney General James.
“These features are addictive, harmful, and illegal, and my office is suing to stop Valve’s illegal conduct and protect New Yorkers,” James added.
Video game publishers have largely prevailed against previous loot box lawsuits on similar allegations. Federal courts in California have ruled that loot boxes are not illegal gambling.
NY AG Cites Slot-Like Loot Boxes
Valve, which did not immediately respond to requests for comment on the litigation, is accused of promoting gambling through video games that are popular with children and teenagers.
In Valve’s most popular game, the Counter-Strike series, James said the process of opening a loot box resembles a slot machine spin, with an animated spinning wheel landing on a selected item.
Estimates suggest that video game companies made $22.7 billion globally from selling loot boxes in 2025. The market is forecasted to balloon to more than $36 billion by 2032.
“Young users with limited funds can be enticed to start gambling through loot boxes in the hopes of obtaining a virtual item that they believe will enhance their status in the games’ virtual worlds. Research has shown that children who are introduced to gambling are four times more likely to develop a gambling problem later in life than those who are not,” James’ press release explained.
Loot boxes are not part of a video game’s regular gameplay but are ancillary attractions. Valve charges users for a key that opens the loot box and awards users virtual items. Assets secured from loot boxes can be sold on Valve’s virtual marketplace, the Steam Community Market.
Lawsuit Damages
James’ lawsuit seeks restitution for players, plus a fine of three times Valve’s alleged illegal gains. The New York AG additionally asks the court to force Valve to cease promoting gambling features and loot boxes in its games.
The litigation has been filed in New York County’s Supreme Court.
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