Lawsuit against Valve could be the end of loot boxes in the US according to lawyer

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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 filed 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 that prohibits such activities.

Attorney Harris Peskin called the legal development “huge news” for the gaming and esports world.

According to Peskin, the legal outcome of this case will likely depend on whether opening cases and getting skins constitutes “receiving something of value.” New York law defines gambling as risking something valuable on an event you can’t control, with the expectation of receiving something valuable in return, depending on what happens.

Valve will likely argue that its Terms of Service and actions against unofficial marketplaces demonstrate it doesn’t support gambling. However, these actions actually aim to reduce the monetary value of its in-game items (skins).

— Harris Peskin for democracy (@HarrisPeskin) February 25, 2026

He explained this wasn’t a new issue, referencing previous investigations in Washington State and a 2018 court case, Kater v. Churchill Downs. That case 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 inside loot boxes are considered illegal gambling, it could have a massive impact, according to Peskin. He believes it could effectively ban all types of loot boxes in New York State.

Okay, so if the Attorney General of New York, Tish James, wins her case, it could mean loot boxes get banned nationwide. Seriously, other states with similar laws would probably jump on board right away. And honestly, if that happened, it would make it way too expensive for game companies to keep offering them – it just wouldn’t be worth it anymore.

— Harris Peskin for democracy (@HarrisPeskin) February 25, 2026

Because New York is such a large market, a decision there could lead to similar changes across the country. It’s unlikely publishers would create different ways to make money in each state, so a change in New York would likely become the national standard.

If New York Attorney General Letitia James wins her case, it could lead to loot boxes being banned nationwide. Other states with similar laws would likely follow suit, making it too expensive for companies to continue offering them.

Peskin anticipates Valve will argue they aren’t involved in gambling by referencing their Terms of Service and efforts to close down unofficial marketplaces. He believes Valve is actually trying to eliminate the monetary worth of the in-game items, known as skins.

As a long-time fan, I remember when Valve ran into trouble in Europe a few years back. Back in 2019, players in France were able to see what they’d get in Counter-Strike cases before they even bought them, thanks to this X-ray scanner thing. It all happened because of gambling laws getting stricter – Belgium and the Netherlands were affected too, and it was a big deal at the time.

Peskin wondered where the line should be drawn, pointing to games like League of Legends and its in-game Hextech items as an example. He then asked if those items could now be considered illegal gambling.

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2026-02-26 18:52