If New York’s lawsuit against Valve is successful, it could significantly change how loot boxes are handled in video games throughout the U.S., according to a legal expert specializing in gaming.
New York Attorney General Letitia James announced a lawsuit against Valve on February 26th, alleging that the company facilitates illegal gambling through the use of loot boxes in games such as Counter-Strike 2 and Team Fortress 2. The lawsuit cites a section of New York state law prohibiting such activities.
Attorney Harris Peskin called the legal development “a huge win” for the gaming and esports world.
According to Peskin, the legal battle will probably center around whether players get something worthwhile when they open cases and receive skins. New York law defines gambling as risking something of value on an event you can’t control, with the expectation of receiving something in return based on the result.
Valve will likely argue that its Terms of Service and actions against unofficial marketplaces demonstrate it doesn’t support gambling. However, these actions actually seem aimed at reducing the monetary value of its in-game items.
— Harris Peskin for democracy (@HarrisPeskin) February 25, 2026
He explained this wasn’t a new issue, referencing previous cases like one in Washington State and the 2018 Kater v. Churchill Downs ruling. That ruling determined that virtual chips could be considered something valuable, even if they couldn’t be exchanged for real money.
Lawyer says Valve lawsuit ramifications are “huge”
If a court decides that the rewards within loot boxes qualify as gambling, lawyer Michael Peskin believes the consequences could be significant. He explained that this could effectively ban all types of loot boxes in New York State.
If New York Attorney General Tish James wins her case, it could lead to the removal of loot boxes nationwide. Other states with similar laws would likely follow suit, making it too expensive for companies to continue offering them.
— Harris Peskin for democracy (@HarrisPeskin) February 25, 2026
Because New York is such a large market, what happens there often influences the rest of the country. Publishers probably wouldn’t want to create different ways of making money in each state, so changes in New York would likely be adopted nationally.
If New York Attorney General Letitia James wins her case, it could lead to the removal of lootboxes nationwide. Other states with similar laws would likely follow suit, making it too expensive for companies to continue operating with this practice.
Peskin predicted Valve will likely argue they aren’t involved in gambling by referencing their Terms of Service and actions against unofficial marketplaces. He believes Valve is actually trying to eliminate the monetary value associated with in-game items, often called ‘skins’.
Valve has dealt with similar legal issues in Europe before. Back in 2019, players in France who played Counter-Strike: Global Offensive gained access to a feature that showed them what they’d get in loot boxes before buying them. This happened because of stricter gambling laws that also affected players in Belgium and the Netherlands.
Peskin wondered where the line should be drawn, pointing to games like League of Legends and its in-game Hextech system as examples. He then asked if those systems would now be considered illegal gambling.
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2026-02-26 18:20