The clampdown undergone by Valve Corporation, the creators of CS:GO, on third-party websites that enable skin gambling impacted the entire esports industry. This is because it resulted in panic selling as many of the websites sold off their inventories at ridiculous prices. Skin gambling where people bet skins on game outcomes for real money has become associated with CS:GO in recent times.
This piece takes a closer look at the Valve Corporation, skin gambling, and the impact of the changes on the gambling industry. When Valve banned sites from betting skins a lot of esports betting sites arose, with them came a lot of bonuses and free bets. Therefore, some people would argue that although a lot of sites disappeared, it gave birth to many other, legit operators to enter the game of gambling, which might be seen as a positive event. If you got intrigued by the free bets, Online Betting Guide has made sure to list the best ones for you.
Valve, founded by Gabe Newell and Mike Harrington who were formerly Microsoft employees, is a Washington-based game developer that has released several hit video games including Half-Life, Portal, DOTA 2, and Counter-Strike: Global Offensive which is arguably its biggest success. In 2002, it released Steam, a digital software distribution platform that integrates features such as multiplayer gaming, digital rights management, social networking services as well as voice-chat and cloud storage functions. All these features and functions transformed the platform such that it became the largest game distribution platform on PC.
Counter-Strike: Global Offensive is a multiplayer first-person shooter that was released in August 2012. It is based on a counterterrorism operation that involves two teams that are pitched against each other – that is, terrorists versus a counter-terror unit. It is expected that such a game would naturally entail the use of weapons, and this is where skin gambling comes into play.
Skin gambling involves the use of virtual goods, known as “skins”, as a virtual currency to wager on the outcome of any games of chance. Skins, introduced in 2013, are items of weapons that are cosmetic in nature, that is, aesthetically appealing. The weapons could be anything from handguns to rifles and even machine guns. Gamers seek after skins for not only their status within the game but also their financial value.
Valve, the developer of Global Offensive, runs a marketplace for Steam where players could possess inventories that could be exchanged for real or digital currency. This makes it possible for the marketplace to be interfaced with third parties to enable skins trading. Valve determines the number of skin to be produced while it earns a 15 percent fee each time skin is either bought or sold.
Players can obtain skins within the CS:GO gameplay, by opening weapon cases (or crates) within the game, or sought on the Steam open market. Some skins have special features that allow players to view the number of kills that have been made with a weapon while in the hands of the current player.
The real money element of the platform motivated players to build the desire to bet on matches. In other words, the popularity of the esport game birthed a lucrative industry around skin trading, thus enabling a healthy revenue stream. However, the gambling practices have since been condemned by Valve based on the basis of violating the platform’s Terms of Service.
How the clampdown began
Skin gambling became a gold mine for both Valve and gamblers since the launch of CS:GO in 2012. With websites adopting the Steamworks API, players can easily connect to their Steam accounts, place bets with their skins, as well as trade their skins for real cash. However, the long, peaceful coexistence between Valve and skin gambling operators was interrupted by the ‘bad’ reputation CS:GO had in the public.
It was difficult to sell a video game involving school shootings and international terrorism to the general public. As if all has been seen, Bloomberg published an article titled: “Virtual Weapons Are Turning Teen Gamers Into Serious Gamblers” to address the threats of underage gambling and fraud as posed by CS:GO gambling. This was further exacerbated by the iBuyPower scandal. This set the tone for the next action to expect.
As expected, a suit was filed against the company by a CS:GO player. The suit accused the company that it “knowingly allowed, supported, and/or sponsored illegal gambling by allowing millions of Americans to link their individual Steam accounts to third-party websites.” The player thus sought to recover gambling losses and there was massive litigation against the company. The impacts of these lawsuits on the company are better imagined than experienced. This resulted in Valve’s move against sites by preventing them from using its API to verify users.
As its measures to prevent the occurrence of fraud, CS:GO introduced an update that requires players to be in possession of skin for a minimum of seven days before trading it either between players or on other third-party sites.
Is Valve pro-skin gambling?
The numerous updates introduced by Valve either in response to the numerous litigations against it or as a means to preventing fraud have generated mixed feelings among gamers and players. For instance, some have claimed the end of skin trading; others have considered the company’s step as an attempt to eliminate all other third-party sites so it can maintain absolute control of every element of the game, including obtaining valuable user-data in the process. Players that fall within the second group have since called for the reversal of the company’s decision.
With esports gambling on the increase, CS:GO gambling has been severely hit by the inability to move skins on quickly. This is not to say that gambling on the game would be completely wiped. However, apart from the fact that the update will impact how players gamble their skins, it will also impact real-money value negatively. This is because there is an increasing loss of interest in skins, thus making the value drop. The implication of this is that players that place skins on gambling will get less value. Others who have skins engage in panic selling to forestall further value drop.
The ultimate decision to reverse these decisions that impact CS:GO gambling lies solely with Valve who is yet to show any positive sign in returning the gambling process back to its usual state. Nevertheless, only time will tell the company’s next updates or actions as the decision would be based on the outcome of legal ramifications of skin gambling hanging on the company’s neck.