Washington State’s Gambling Commission has made a move involving the controversial online betting of video game “skins” by ordering game maker Valve Corp. to stop supporting the betting market.
In skins betting, players involved with eSports games like Valve’s Counter Strike: Global Offensive use virtual items from the games as currency in making bets. The commission called the betting an unregulated black market.
“In Washington, and everywhere in the United States, skins betting on sports remains a large, unregulated black market for gambling,” Commissioner Chris Stearns said in a statement. “And that carries great risk for the players who remain wholly unprotected in an unregulated environment.”
The commission sent a cease-and-desist letter to Valve Chief Executive Officer Gabe Newel after officials said the company did not respond to requests for more information following a meeting in February. Valve is headquartered in Bellevue Washington.
The commission said that if the company doesn’t comply with the state’s gambling laws, it could seize any property related to illegal gambling activities, according to the letter.
Skins betting has been drawing attention from regulators after several controversies involving the practice, which often appeals to underage players. Valve has been trying to distance itself and has taken some action against sites that use its Steam platforms to exchange the virtual items.
In July, Valve sent a cease-and-desist order to 23 skins betting sites, saying they were violating its terms of service. Some shut down, but according to a report in the Seattle Times, others have switched to using virtual currencies, which then could be used to trade for the skins.
Analysts told the paper that the commission’s move reflects an opinion in the industry that Valve hasn’t done enough to stop the practice, and ultimately has supported skins betting by encouraging players to acquire the virtual items through game play or to buy them from the company.
Valve did not respond to the report and has until October 14 to respond to the state gaming commission’s letter.
