Loot boxes are a controversial topic in gaming. Valve is also regularly criticized for its approach to weapon skins in Counter-Strike 2. Now, the state of New York is taking action against this. The Attorney General is suing the Steam developer.
What is this lawsuit about? As the state of New York announced on February 25, 2026, Steam developer Valve is being sued by Attorney General Letitia James. This is the highest position in the legal system of the state.
In the lawsuit, the state aims to take action against the loot box feature in Valve’s games like Counter-Strike, Team Fortress, or Dota. The state accuses Valve of violating New York’s gambling laws with loot boxes.
Protecting youth from loot boxes
What does the Attorney General say about loot boxes? The lawsuit describes that the Attorney General’s office conducted investigations into Valve’s games (Counter-Strike 2, Team Fortress 2, and Dota 2). They compare the mechanics to gambling since one can sell virtual items without in-game functionality
online for a lot of money. They mention a skin that was sold for over 1 million US dollars (about 848,000 Euros) (source: Kotaku). We reported on this as early as April 2025, about how much money Valve could have made with the boxes.
According to the lawsuit, Valve has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling in the hopes of winning expensive virtual items that they can cash in on.
The Attorney General is referring to third-party websites where one can sell their skins for real money.
Selling skins is attractive to thieves who want to hack accounts or trick users. Regarding the danger for children, the lawsuit also references younger players who could be encouraged to start gambling through loot boxes to enhance their status in the games’ virtual worlds.
The lawsuit compares Valve’s loot boxes to slot machines.
Letitia James urges Valve to stop promoting illegal gambling in their games. Additionally, Valve is to pay a fine to protect the state’s population. She describes the features as addictive, harmful, and illegal.
In the lawsuit, the Attorney General focuses heavily on youth protection. Previously, she warned about sports betting and advocated for the regulation of social media for those under 18.
What is the situation with loot boxes in Germany? Traditional loot boxes are not considered gambling in Germany since virtual items are received and no real money is involved. The Bundesrat called on the federal government in November 2025 to examine whether loot boxes exhibit gambling-like mechanisms and need to be regulated for child and youth protection.
According to an article from the European Consumer Center Germany from September 2024, the legal question in Germany is controversial since there have been no rulings regarding loot boxes and gambling. In countries like Belgium or the Netherlands, paid loot boxes fall under illegal gambling.
In 2026, Valve was already sued, but this was not about their loot box mechanics, rather about the Steam platform itself. They are accused of having an unfair influence on market development. More about this can be read here: Valve faces a lawsuit amounting to over 754 million Euros for unfairly exploiting its dominance with Steam
