Valve got hammered by the Washington State Gambling Commission recently for the use of the Steam API OpenID being attached to certain unsanctioned gambling sites for Counter-Strike: Global Offensive. Well, Valve addressed the Commission with an interesting response.
Polygon picked up the response that Valve sent out, where they state...
As we have explained on multiple occasions, Valve is not engaged in gambling or the promotion of gambling, and we do not 'facilitate gambling.' The operation of Steam and CS:GO is lawful under Washington law. We were surprised and disappointed that the commission chose to publicly accuse Valve of illegal activity and threaten our employees with criminal charges.
Valve takes a very pushback mentality to the accusations from the Washington State Gambling Commission. The thing is, you can't really blame the Gambling Commissioner. Digital gambling is completely unregulated other than being outright outlawed in most states, and the fact that people were using Counter-Strike: Global Offensive to run these not-so-underground gambling rings while pretending that it was all just fun and games (even though in some cases there were reportedly hundreds of thousands of dollars being moved through the rings over the course of weeks) it's not surprising that an official state commission would eventually get involved and start asking questions.
Let's also not forget that these gambling rings were being promoted by YouTubers who have a majority of young viewers, many of which were under the age of 18. You could easily attach your Steam ID to these websites and use Steam Wallet to fill up the account. The only blockade to keep people under 18 from signing up for the gambling sites was a basic terms of service screen with the "Are you 18 years of age or older?" checkbox.
There were various reports and some complaints about the Counter-Strike gambling rings, but it wasn't until YouTube outlet H3H3 Productions did a video about several other high profile YouTubers running the gambling ring did it gain widespread attention, get the eyes of the FTC, and prompt for various lawyers to get involved to launch a case against Valve and the YouTubers.
Eventually the Washington State Gambling Commission got involved and started investigating after all the commotion was kicked up, and they came down on Valve first because Counter-Strike is their game, the Open ID Steam API is their software, and people were using their game and their software to facilitate unlawful gambling communities.
Valve has since tried absolving themselves from any connection with those rings by sending out cease and desist letters to the Counter-Strike gambling sites using their Steam API, but apparently the Washington State Gambling Commission didn't get the memo.
Chris Stearns from the Gambling Commission wants further investigations into eSports gambling, citing that it's "unregulated" and needs oversight. Valve updated the Commission in their letter about their cease and desist initiatives and seem to be willing to work with the state regulators to get the situation resolved.
And while the class-action lawsuit against both Valve and the YouTubers was denied, the lawyers are seeking to build a case on the state level. Whether Valve will still have to deal with those issues remains to be seen.