Is the legal CS:GO Gambling?

There isn’t a lot of legal precedent on virtual item gambling. Are skins money, virtual capital, or are they more like arcade tokens that these gambling websites accept like pinball machines? One of the few, somewhat comparable recent cases is Mason v. Machine Zone, in which a plaintiff alleged that the ‘Casino’ area of Game of War, where players could bet in-game currency in order to receive rewards, constituted a gambling device, and that the $100 she lost was a result of “unfair competition.”

The court didn’t rule in Mason’s favor, going so far as to call comparing the value of in-game virtual gold and in-game rewards to the value of real money “a whimsical undertaking” that “has no place in federal court.” Because Game of War doesn’t offer payouts of real-world money, Mason had transformed her money into valueless play money, the court says. “[The] Plaintiff was not wagering with dollars,” the decision reads, “she was playing with virtual gold. Plaintiff acquired that ‘gold’ in the “gold store,’ where she exchanged her real-world currency for a nontransferable, revocable license to use virtual currency for entertainment purposes. At the moment of that antecedent transaction, Plaintiff’s ‘loss,’ if any, was complete: then and there she had swapped something of value (real money) for something of whimsy (pretend ‘gold’).”

What does Valve say?

There are major differences between Game of War and CS:GO, especially the presence of an open digital market operated by Valve that provides pricing information on weapon skins in real money. But one small similarity is that secondary markets do exist for selling Game of War accounts for real-world money, a fact that the court didn’t seem to give much weight.

“What she could not do is cash out of the game. In this respect, while GoW’s Casino function aesthetically resembles classic games of chance, the underlying transaction is more akin to purchasing cinema or amusement park tickets. Consumers of such services pay for the pleasure of entertainment per se, not for the prospect of economic gain,” the decision read.

Some of the only legal insight on the topic came in an AMA on /r/GlobalOffensive this week, where three lawyers who specialize in gaming, gambling, or esports offered their perspectives on the issues connected to CS:GO skin gambling.

“For my money,” Bryce Blum says of the likelihood that skin gambling will be considered gambling by the law, “I think this is a no brainer because the secondary market is prominent, permitted to exist, and skins have widely known value. That being said, there isn’t a case directly on point here so it’s impossible to say for certain.”

“[T]he question is whether the skins are a “thing of value,” adds Jeff Ifrah. “Generally, in traditional gambling cases, this means cash or chips. Skins, even with secondary markets, hold their value because of the gaming, which puts it squarely in the virtual world,” he continued, “If the skins are virtual things of value, using them for gambling would be OK under most laws.”

Overall, their legal attitude is that betting doesn’t necessarily need to banned in all forms, but that it needs more regulation and protections for participants. “CSGO has grown to its current prominence in large part due to betting, and I don’t think eliminating all skin betting is necessary or a smart move,” writes Blum. “We do however desperately need to eliminate the bad actors from the space. The types of fraud that came to the fore in the CSGO Lotto and CSGO Diamond situations are precisely what arises when betting sites operate without oversight or transparency. The entire industry needs to take a stand on this issue, not just Valve.”

CS:GO skin gambling operations are not in imminent legal danger, and there are no known suits against them at time of publication. Sports betting is illegal everywhere within the United States with the exception of Nevada, Oregon, Delaware, and Montana. Internet-based gambling is prohibited in all but three US states, even if you’re older than 18. Unless Valve makes a public statement condemning the activities of these groups, or restricts use of its Steam Market API to groups that it vets, gambling will continue to be a morally and legally gray by-product of one of the world’s most popular PC games that’s accessible to anyone with a Steam account.

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