Earlier this week, a letter from the Washington State Gambling Commission to Valve set the Internet on fire. The commission demanded that the Washington-based publisher of Counter-Strike:Global Offensive and Dota 2 immediately shut down in-game skin trading operations by any means necessary. Their letter, addressed to Valve managing director Gabe Newell, threatened legal action including seizure of property, forfeiture of Valve's corporate charter, and even criminal charges.
But despite the strong language, WSGC commissioner Chris Stearns says the warning was intended to encourage Valve to cooperate with the commission’s investigation into skin gambling. In an interview, Stearns said the WSGC wants to know what steps Valve has taken to comply with the law.
"Right now, what we specifically asked them for is just to describe to us the steps they're taking," he said. "We sincerely hope Valve will work with us, because I think that'll help us do a better job. There's some really good and smart people over there."
According to the letter, the commission made several earlier attempts to contact Valve without issuing a subpoena or making accusations of illicit activity. Valve wasn't obligated to respond, and the fact that they didn't won’t surprise anyone familiar with Valve's less-than-organized corporate communications. Stearns says that Valve’s lack of cooperation so far was not a factor in their decision to send this week’s more strongly worded letter, but it has slowed down the commission’s investigation. Valve did not respond to a request for comment from theScore esports.
From what little we’ve been able to gather over the past few months, it appears Valve has been making an attempt to shut down skin gambling. They’ve sent cease-and-desist letters to dozens of gambling operations that have been using item-trading bots plugged into Valve’s Steam API, and many of those sites have indefinitely ceased operations. It’s possible Valve has taken further action behind the scenes to cut off sites that refused to stop using item-trading bots for gambling purposes, but no one has come forward with evidence.
Stearns said the WSGC is now confident that skin betting counts as gambling for regulatory purposes, and the commission has received multiple citizen complaints about minors involved in skin betting. Washington’s gambling laws are more restrictive than most states — gambling was only legalized there in 1972, and the state legislature has taken a strong stand against illegal online gambling over the past decade.
Despite the urgency of the WSGC’s letter, Stearns seemed to expect the process will take time.
"We're just trying to have a sensible approach to things," he said. "I wish I could tell you we had some kind of typical course to fall back on, but honestly this is a brand new environment for us. ... Esports wagering is really a recent phenomena."
He stressed that the WSGC are not “anti-gaming,” and aren’t against esports betting on principle. "People like to gamble, we just want to make sure it's being done legally," he said.
For now, Valve is not being forced to shut down item trading within the Steam API, and no criminal charges have been laid. Asked whether the WSGC will take up a criminal case if Valve refuses to cooperate by Oct. 14, Stearns was equivocal. "I don't have an answer to that, because we don't know what they're going to say," he said.
Ryan "Gorgon the Wonder Cow" Jurado writes about Dota 2 and freelances for theScore esports. You can follow him on Twitter.