Valve, the creator of Steam and the owner of the largest PC digital games storefront, has found itself at the center of a legal storm. The scale of its ecosystem—spanning hundreds of millions of users—along with its hardware business and its own multiplayer titles, has made the corporation an easy target for regulators and plaintiffs. The disputes are unfolding on several fronts at once and across different jurisdictions, from allegations of illegal gambling to antitrust cases.
Five Cases Across Two Continents
The current cases can be grouped by topic and country:
- U.S.: two parallel cases over loot boxes in Counter-Strike 2, Dota 2, and Team Fortress 2 (a consumer lawsuit in Washington State and a state enforcement action in New York).
- U.S.: a developer antitrust class action challenging Steam’s 30% commission.
- United Kingdom: an antitrust case built on allegations of market dominance and “locking” users into the store.
- United Kingdom: claims by PRS regarding the licensing of music rights.
At stake are fines, a review of commissions, restrictions on certain mechanics, and new rules for content licensing.
For the First Time in the U.S., a State Targets Loot Boxes
In Washington State, the lawsuit was filed by the law firm Hagens Berman on behalf of players who consider themselves victims of “casino-like” tactics. The case brought by New York Attorney General Letitia James differs fundamentally in that the state itself is bringing the case. Previously, no U.S. regulator had brought a similar lawsuit against a game developer, making the proceedings a potentially more significant precedent.
The Mechanic Under Scrutiny—and Valve’s Revenue Model
The argument runs as follows: Randomized rewards mimic slot-machine psychology and pose risks to minors. Valve earns money from selling keys to loot boxes and takes a 15% fee on each resale of items on the Steam Community Market. It is this secondary market that has become the central element of the allegation, because it allows users to cash out digital items for real money.
Previously, such lawsuits have often failed in the U.S. In 2021, a California court dismissed the case against Supercell (Brawl Stars, Clash Royale) because the plaintiffs were unable to prove either consumer harm or the monetary value of the items received.
Three Elements Likely to Decide the New York Case
To classify loot boxes as gambling, the state must demonstrate that a set of elements is met.
- The player pays money for access to an item (a stake/risk is present).
- The contents are determined by an RNG (random number generator).
- The items obtained can be exchanged or sold for real money.
The key dispute centers on the third point—namely, the ability to extract monetary value via the Steam Community Market.
An Expert on the Key Weakness of Earlier Lawsuits—and New York’s Chances
Dr. Leon Xiao, a specialist in the legal regulation of loot boxes at City University of Hong Kong, notes that worldwide such cases have stalled precisely on the “third element.” However, in Steam’s case, in his assessment, the condition is met thanks to a functioning resale market. If the court agrees with this logic, the Marketplace rules—and the entire revenue model around it—could be called into question.
A Defense Built on an Analogy to Baseball Cards
Valve compares its loot boxes to physical collectibles, from Magic: The Gathering cards to Labubu figurines. In U.S. case law, attempts to challenge card packs as a form of gambling have already been made, but none has succeeded. The case Schwartz v. Upper Deck Co. in the 1990s failed due to the inability to prove a direct loss of property. The analogy may help Valve contest the allegation, but it does not remove the question of how applicable 19th-century statutes are to the digital market.
The Antitrust Front on Both Sides of the Atlantic
In the U.S., the developers’ class action, launched by Wolfire Games in 2021, was certified as a class action in 2024 and now covers anyone who paid Steam’s 30% commission since January 28, 2017. What’s at stake isn’t a single game, but Steam’s distribution economics.
In the United Kingdom, a parallel lawsuit is built on similar logic. The plaintiffs argue that market dominance forces developers to accept the commission and “locks” buyers into the ecosystem once they’ve made their first purchase. The UK case increases pressure on the platform’s rules in the largest markets.
Music and Licenses as a Separate Front
PRS (Performing Right Society) claims that Steam makes games with musical content available for download without the proper licenses. According to lawyer Rebecca Rechtszayd, this is a fairly standard digital-rights dispute, but its consequences could affect both the platform and publishers. This front is important because it concerns content and intellectual property, not just the store’s economics.
What Will Happen to the Marketplace and Loot Boxes If Courts Side With Plaintiffs
Realistic scenarios include restricting or disabling the Steam Community Market in certain states, large fines, and disgorgement of “ill-gotten gains.” The litigation could drag on for years, but the precedent itself could affect the secondary market for digital items well beyond Valve’s own titles.
The Psychological Effect of Loot Boxes and Its Consequences
While this isn’t part of the litigation, many experts point to a less obvious effect of loot boxes. Quite often, they can serve as a “gateway” to gambling. A particularly vulnerable category of players includes teenagers and people who are emotionally vulnerable. Becoming accustomed to variable, chance-based rewards when using loot boxes pushes players to seek other kinds of gambling entertainment. Interest in this topic is fueled by a steady stream of gambling ads. All of this creates fertile ground for a person to use sign up no deposit casino bonuses or other promotional offers from online casinos. There is already a number of studies showing that many who report a “transition” from loot boxes to gambling started using them before the age of 18. This is a worrying trend that has been drawing increasing attention lately.
Outdated Laws and Targeted Fixes
The final legal classification of these mechanics and the limits of what’s permissible will be determined by the courts. Leon Xiao emphasizes that legislation whose roots go back to the 19th century may be poorly suited to the realities of the online economy. A more targeted approach is also being discussed, under which the transferability of digital items is preserved, but the resale of loot-box items on secondary markets is blocked. Such a scenario directly affects the Marketplace and the legal assessment of loot boxes.
Valve responded to the New York lawsuit by leaning on an analogy to collectible cards. On the other fronts, the company has not commented publicly. GameRant requested comment from Valve, but had not received a response by the time of publication. Some of the cases may run for years, and their precedents could potentially affect future lawsuits in both jurisdictions.
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