Skin betting still rife despite Valve cease-and-desist orders

The unwanted spotlight is very quickly returning to Valve with regards to their alleged facilitation of unlicensed gambling through their Steam API. 

EBSR‘s Will Green has released his October scorecard for skin betting sites that were previously issued cease-and-desist orders by Valve. 

The main findings of the scorecard are as follows: 

  • At least 19 sites are utilising Steam in connection with commercial gaming or gambling.
  • Five of those sites appear to US users as if they’re shut down, but are offered to users in other countries around the world.
  • Five of those sites initially shut down and appeared to obey Valve’s C&D demand, but have since relaunched with equally violative products.
  • Three of those sites not only failed to shut down, but have expanded their Steam-related gambling offerings to include sportsbook-style betting on matches.
  • Three of those sites do not accept skin deposits themselves, but only accept as gambling currency coins from third-party, skin-to-coin deposit sites, which still involve Steam.

(Originally published by EBSR: here)

Seemingly several of these websites have straight up ignored the Valve cease-and-desist. The sites which appear dead to US users were told to cease activities all over the world – but have seemingly ignored that part. Since apparent relaunches, websites such as CSGOBig are effectively offering identical services to those that were previously offered. Roulette, Lotto, CoinFlip are amongst features that users have access to. 

The workaround that these companies have seemingly applied is replacing skins with virtual currency. The virtual currency is earned by depositing skins on a separate website before transferring the currency to their website. Effectively, they are doing exactly the same thing as previously. 

Near enough every single one of these operators applies no geographical test nor age verification meaning they are likely in breach of licensing law and are likely facilitating underage gambling.  

There have been 19 websites that have completely vanished since the cease-and-desist orders but that’s far eclipsed by the number of operators in the space. When Valve first released the C&D orders we suspected that Valve were merely acting to try and take some heat away from them and that they were by no means addressing the bigger picture. With ESBR suggesting that there’s over 100 operators in the space, it’s abundantly clear that there is a huge problem here and one that Valve are going to have to address – sooner rather than later.

Valve are under increasing pressure, with the Washington State Gambling Commission instructing Valve to explain how it had not violated Washington state laws by owning and operating Steam. Should Valve’s answer prove unsatisfactory – which it may well do – it risks facing criminal charges and seizure of property. 

Esports Insider: Having been involved in the gambling space of esports for a little while now, I still find myself genuinely surprised that Valve have not been hit extremely hard by regulators and have not taken significant action. The skin betting industry is riddled with underage clientele and is generally completely unlicensed and unlawful.  It’s vital for the esports ecosystem that the problem is sorted, as this could easily develop into an issue that plagues esports for years to come.