Valve has been named in a lawsuit by New York Attorney General Letitia James, citing loot boxes as “unlawful” in the state and urging the video game developer to pay any local players back for their in-game spending.
Loot boxes are nothing new. For as long as they’ve been around, they’ve been the target of legal action as individuals and groups sue for various reasons. In some cases, the in-game rewards have been called “deceptive,” while they’ve been classified as outright “illegal” in other jurisdictions.
Valve is no stranger to the courts, having been sued on multiple occasions for its gaming practices. It’s currently engaged in a $900M lawsuit over “unfair” Steam prices. But namely, loot boxes and skin trading revolving around Counter-Strike and the Steam marketplace are a common focus.
Now, the gaming giant is being sued once again. This time, by the State of New York, as Attorney General Letitia James issued a lawsuit on February 25, 2026.
Valve sued & urged to pay funds back to impacted players
Sharing the news on X, Attorney General James outlined the state’s intent to “permanently stop Valve from promoting gambling features in its games.” Not only that, but the legal action also seeks for the devs to pay back impacted local players and “pay fines for violating New York’s laws.”
“Valve, a video game developer, has made billions of dollars by letting children and adults illegally gamble for the chance to win valuable virtual prizes,” Attorney General James’ X account said. “These features are addictive and harmful. That’s why I’m suing to stop Valve’s unlawful conduct and protect New Yorkers.”
In particular, the lawsuit takes issue with Valve’s approach to in-game purchases. It labels Valve’s loot box model as “quintessential gambling, prohibited under New York’s Constitution and Penal Law.”
The New York Constitution states “no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling … shall be authorized or allowed within this state.”
There are some exceptions to the rule, of course, but Valve’s practice isn’t one of them. “Valve’s loot boxes have not been specifically authorized by law, and are unlawful,” the lawsuit reads.
Valve fined triple its microtransaction profits in New York
Attorney General James wants Valve to cease its “gambling” in the State of New York, but more than that, wants the company to pay up.
“[Valve] to produce an accounting of monies lost by consumers in New York as a result of illegal acts, and then make ‘a full restitution and pay damages caused directly and indirectly.”
Furthermore, Valve is to “pay a fine of three times the amount of its gain from the illegal practices alleged herein.”
That sum is unquantifiable with public data, but could be tens of millions, depending on how many gamers reside in New York and engage with Valve’s products.
Dexerto has reached out to Valve for comment.
