New York AG Pushes to Ban Loot Boxes, Seeks Player Compensation from CS2 and Dota 2 Developer

^{Pictured: Letitia James, the Attorney General of the State of New York}

New York Attorney General Letitia James has filed a lawsuit against Valve Corporation, accusing the video game developer of unlawfully promoting gambling.

The complaint centers on loot boxes available in several Valve titles, including Counter-Strike 2, Team Fortress 2 and Dota 2. Loot boxes are virtual containers that offer random in-game items and can be opened using real money. Prosecutors argue that the system effectively constitutes a form of gambling.

In Counter-Strike 2, items obtained from loot boxes are cosmetic, such as weapon skins. Some skins are significantly rarer than others, increasing their market value.

By early 2025, sales of loot boxes in Counter-Strike had generated an estimated $5 billion in revenue for Valve, according to the filing.

One AK-47 skin from Counter-Strike 2 sold for more than $1 million in 2024.

Players can sell acquired items through Valve’s Steam Community Market or via third-party platforms. They can also use the items to place bets on so-called skin gambling websites. The attorney general’s office alleges that Valve has effectively facilitated the operation of such platforms.

Prosecutors say the loot box model poses particular risks to minors. Court documents cite research indicating that children with experience purchasing virtual containers are four times more likely to develop gambling addiction later in life.

^{An AK-47 skin from Counter-Strike 2 that was sold for more than $1 million in 2024}

The attorney general is seeking a court order to ban the use of loot boxes in New York State, require restitution to affected users, disgorge allegedly unlawful profits, and impose civil penalties of up to three times the company’s purported illegal gains.

The attorney general’s office said the lawsuit is part of broader efforts to combat illegal gambling.

Gambling Park notes that in October 2025, the market value of in-game items in Counter-Strike 2 fell by nearly $1.8 billion in a single day.

* A cosmetic item that alters the appearance of a weapon or piece of equipment without affecting gameplay and that carries market value.