Valve, a Bellevue-based video game developer, was accused in a lawsuit last week of operating a system that too closely resembled gambling, violating Washington state law.
The company, founded by former Microsoft employees in the 1990s, developed the platform Steam, a marketplace for PC games. Valve also publishes video games, including popular franchises like Counter-Strike, which is at the heart of the lawsuit filed in federal court in Seattle.
Valve sells loot box keys for games like Counter-Strike, which allow players, for $2.49, to open a virtual loot box that holds items that can be used in the game. But the outcome of those loot boxes is random. And many times, that “loot” is worth less than the $2.49 charge for the key, according to the lawsuit.
The plaintiffs’ attorneys say in the lawsuit that odds are often stacked against the user. Citing an analysis, they claim that roughly 96% of the items awarded in Counter-Strike loot boxes are worth less than the key used to open the case.
“But on rare occasions, a player wins an item worth hundreds or even
thousands of dollars. … It is this possibility — remote but tantalizing — that
drives players to keep buying keys and opening loot boxes,” the attorneys said in the lawsuit.
It’s not just the loot box system that the plaintiffs say mimics gambling, but the aesthetics as well. The process to open loot boxes is designed to resemble a slot machine, with images of possible prizes spinning across the screen before one is slowly picked, according to the lawsuit.
The lawsuit said Valve’s loot box system violated Washington gambling law, which regulates gambling and ensures victims of illegal gambling games have recourse to recover money or anything of value.
“We believe Valve deliberately engineered its gambling platform and profited enormously from it,” said Steve Berman, one of the lawyers representing the plaintiffs, in a news release. “Consumers played these games for entertainment, unaware that Valve had allegedly already stacked the odds against them.”
Valve did not respond to a request for comment.
The company has two other popular franchises that have loot box reward systems: Team Fortress and Dota.
All three franchises have included free-to-play games for years. Valve makes money off the games in two ways: through the loot box system and through commissions that Valve collects on virtual item sales on the Steam Community Market.
The revenue stream for virtual items in free-to-play games is massive. The market for digital items in Counter-Strike hit a record $4.3 billion in early 2025, according to Bloomberg.
More than 400 million Counter-Strike loot boxes were opened in 2023, with Valve generating over $1 billion from the key sales, according to a third-party tracking service cited by the plaintiffs’ attorneys.
The plaintiffs are seeking an unspecified amount in restitution and damages, as well as attorneys’ fees and a jury trial. Attorneys are seeking class-action status for the lawsuit, which was filed on March 9, in the U.S. District Court for the Western District of Washington.