Valve issues cease operations notice to third party betting websites

Valve has taken action against the infamous third party betting websites market that operate based off of player matches and in-game items. The software development company issued an official statement reporting a request for all such websites to cease operations immediately. The action has already triggered a wave of reactions.

After years of complaints and two lawsuits filed against the video game developer, Valve has finally dropped the hammer on the third party item market and betting websites.

In an issued statement published on Steam last night, Valve notified the masses that they would be sending cease operations notices to these third party websites, effective immediately.

A feature was added to Steam in 2011 to allow users to trade in-game items and create an in-game economy for games such as Dota 2 and CS:GO. Following this implementation, betting and trading websites began to pop up – bringing the virtual economy to the forefront of the gaming experience.

Besides leveraging the in-game items, some websites also developed ways to transfer them into the real world currency – thus creating real monetization.

The result was a big boost and boom in the online gambling scene.

Reactions to Valve’s statement

Several websites have already notified users of their intent to shut down operations.

© csgodouble notification

Concerns have risen as to whether the companies even have enough revenue to deal with the situation and compensate users at this time.

While Valve’s stance has been met with positive reactions by many, others question the impact it will have on the viewership and future of the games.

According to several personalities, team owners and players – viewership exploded and the popularity of the games has increased significantly upon the release and availability of these items and access to the trading and betting websites.

One team owner has told DotaBlast:

Skin betting saved CS:GO. This decision which was forced by the community may have very bad consequences for CS:GO, especially now that Overwatch and other games are gaining traction.

Subsequently, Twitch has also made a statement of their own in regards to the code of conduct and content when streaming.

As a reminder, per Twitch’s Terms of Service, broadcasters are not permitted to stream content that breaks the terms of service or user agreements of third-parties. As such, content in which the broadcaster uses or promotes services that violate Valve’s stated restrictions is prohibited on Twitch.

Class action suit filed against Valve

Just recently, Valve became the center of a lawsuit filed by Counter-Strike: Global Offensive players over CS:GO skin (item) gambling. The suit is seeking class action status and is referring to third-party sites such as CS:GO Diamonds, CS:GO Lounge and OPSkins but is not limited to CS:GO or those individual websites.

The lawsuit alleges that Valve:

(…) has knowingly allowed an illegal online gambling market to flourish around the purchase, trade, and wagering of Counter-Strike: Global Offensive skins (…) and has been complicit in creating, sustaining and facilitating [a] market and thereby promoted the onslaught of illegal gambling and enabled underage betting.

These third-party websites don’t require age verification and many users are indeed underage. According to Michael John McLeod, one of the players who filed the lawsuit – he “purchased skins from Valve, gambled them — both as a minor and later as an adult — and lost money”.

Valve’s OpenID API software was directly used to verify the accounts of users and was also exploited by creating bots to mimic real users and trade winnings/bets – leading to the allegation that the company was aware of the practices and enabled the industry to thrive. According to the same allegations, Valve benefited financially from the use of their software by such websites.

Valve has clarified the intended use of the Steam’s trading system and their OpenID API in their statement, saying:

The OpenID API and making the same web calls as Steam users to run a gambling business is not allowed by our API nor our user agreements.

Bloomberg estimates that the skin gambling market is part of a $2 billion business.

Effects of gambling on the scene

Over the last several years, since the introduction of the in-game items and various third party market and betting websites – Dota 2 has had significant problems directly related to the feature.

In April 2015, ViCi Gaming’s 2-0 loss to LGD, in a VP Game Pro League, got supporters worked up to an aggressive extent. The Chinese organization claimed to have received numerous death threats and ISIS videos.

Other high profile players reflected the problems that come with a fan or viewer losing their “rares” or bets.

EG’s captain, Peter “ppd” Dager, was also a recent victim of rabid fans’ death threats:

DDoS attacks became frequent ways for gamblers to attempt to change the outcome of a match by disrupting the momentum, causing def-wins or player swaps.

In one such case during the DreamLeague Season 3 qualifier finals, the DDoS attacks resulted in long pauses and player replacements* with the series finally concluding well into the night.

*Alaan “Bamboe” Faraj was replaced by Omar “w33haa” Aliwi in Game 1, after 9 minutes. Kai “H4nn1” Hanbueckers was replaced by Roman “Scandal” Sadotenkov in Game 1, after 16 minutes.