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Valve Corp challenges Washington state to lawyer up or shut up

TAGs: eSports, Valve Corporation, washington

Valve Corp challenges Washington state to lawyer up or shut upeSports developer Valve Corporation has essentially told Washington state gaming regulators to prove that its facilitating ‘skin betting’ via its online marketplace or else stop grandstanding already.

Two weeks ago, the Washington State Gambling Commission (WSGC) issued a statement saying it had warned Valve to “immediately stop allowing the transfer of virtual weapons known as ‘skins’ for gambling activities through the company’s Steam Platform.”

In a letter first obtained by Techraptor, the Bellevue, Washington-based Valve – the folks behind the popular Counter Strike: Global Offensive eSports title – responded to the WSGC by saying it has explained “on multiple occasions” that Valve “is not engaged in gambling or the promotion of gambling, and we do not ‘facilitate’ gambling.”

Valve says there is “no factual or legal support” for the WSGC’s accusations, and says it was “surprised and disappointed” that the WSGC “chose to publicly accuse Valve of illegal activity and threaten our employees with criminal charges.”

HOW WE GOT HERE
The eSports world was upended in July, when Valve ordered third-party skin betting sites to stop unauthorized use of its Steam marketplace. Valve was prompted to act after aggrieved eSports players filed a class action suit accusing Valve of facilitating skin betting via Steam.

In addition to sites that allowed players to wager skins on the outcome of eSports matches, player could also wager skins on lottery-style games with purely random outcomes, which critics labeled as online casinos by another name.

Valve’s letter to the WSGC acknowledges the existence of sites offering “gambling propositions” but insists that it has “no business relationship” with such sites and “does not promote nor encourage Steam customers to use such gambling sites.”

Valve insists that it “does not receive revenue from these sites,” which is only technically true. Valve admits it “receives a small transaction fee in Steam Wallet funds for Marketplace transactions, but Valve does not receive any compensation” when customers opt to make a direct trade of skins with each other.

Valve says Steam also provides user authentication via the open internet standard known an OpenID, which allows a Steam user to identify himself to a third-party website via his Steam account without having to fork over his Steam credentials.

Valve says that neither Steam transactions nor Steam’s use of OpenID are illegal “in Washington or any other jurisdiction, and we do not believe the Commission contends to the contrary.” Valve says it’s unaware of any specific criminal statute or regulation it is violating, and challenges the WSGC to “provide a citation” of such a rule.

VALVE UNWILLING TO ADOPT NUCLEAR OPTION
Valve says the WSGC’s argument boils down to “Valve could stop this, so it should.” But Valve believes the only way to satisfy the WSGC is to “turn off the Steam services,” something Valve isn’t prepared to do, nor does Valve believe the WSGC has the authority to order it to shut down Steam, which most customers use responsibly without any connection to gambling.

Following this summer’s kerfuffle, Valve says it identified “over forty” skin gambling sites, issued cease and desist orders to all of them and shut down their Steam accounts. Valve says it’s willing to do likewise for any other skin betting sites the WSGC can identify.

But Valve says it can’t be aware of all the skin betting sites out there, nor does it have the capability to play whack-a-mole with the easily recreated ‘bot’ accounts that some skin betting sites use to facilitate Steam trades. Valve says it’s happy to cooperate with the WSGC in cutting off unauthorized sites and accounts, but it also wants to “clarify the legal allegations” against the company.

The WSGC’s response should be interesting. Washington state has traditionally adopted a fairly humorless approach to online gambling, having made the practice a Class C felony way back in 2010 and made an attempt this year to bring daily fantasy sports under that same felonious umbrella.

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