Skins. Cosmetic ingame items without any actual influence on the gameplay. Virtual things with real world price tags. Subjects of desire, envy, trading and in recent years also gambling. And the last one is about to be changed soon.
It was being expected for quite some time and now it has finally happened. Valve made a step forward against betting and gambling sites based on CS:GO skins and DotA 2 items. It is quite interesting that it took them so long. There was a large and constantly growing number of websites bound with suspicious transactions with skins and last year Valve even banned a few professional teams because they were purposely losing matches in order to profit from betting.
Two weeks ago Valve published a statement saying that they did not have any involvement in these operations. They also said that they would soon take action against them.
More recently, these company sent out a C&D letter asking the gambling organizations to cease their activity in the following ten days, saying, that otherwise it would terminate their accounts and prosecute the owners. The reason they stated is violating the Steam Subscriber Agreement, which forbids using the API for commercial purposes. But there’s more to it.
One of the main objections that have been mentioned many times in relation to the skin gambling was the fact that young people under the age of 18 were able to gambling. It would be very difficult and almost impossible to make sure only elder players use these services.
The sites in question split into two different groups: sites such as csgolounge.com, which offered a possibility to bet skins on pro-gaming matches and those based on pure gambling such as dice rolling or a roulette which can be considered more dangerous, especially to the affair mentioned “under 18 group”.
The constantly growing market also included plenty of shady business. There have been numerous cases of scamming and also scandals such as YouTubers Trevor "Tmartn" Martin and Tom "Syndicate" Cassel making videos of them winning bets on CS:GO Lotto site, purposely not mentioning the fact that they own the site.
Another case to be pointed out is one of Twitch streamers Moe "m0E" Assad who was being told results of dice rolling on CS:GO Diamonds site in advance, resulting in huge winnings. And then there is Phantoml0rd. The gaming journalist Richard Lewis uncovered Phantoml0rds dirty business topped by the fact that he owned one of the websites he was promoting on his stream. There is much more to it, explained in Lewises video.
This whole step of Valve means shutting down a huge branch of business. The total cost of the betting market is difficult to define, but it is estimated to be as huge as $7 billion a year. Even if it was only a half of such amount, it is clear that ceasing it completely is not an easy task, even for a Valve sized company.
That is probably why we can expect Valve to leave a bit of room for third-party skin trading, another reason being the amount of attention this brings to the game. For example site opskins.com which is basically used to convert your skins into real money has not heard from Valve. This means that sites not being connected to gambling should remain functional, at least in a certain manner. You can’t be sure about that staying legit though - Richard Lewis is here again with detailed coverage.
Furthermore, the betting sites may find a way around using the Steam API, which would make it a lot harder for Valve to prosecute them. On the other hand, this will inevitably make the betting much more difficult to organize and we have no idea how the sites would sustain the same not using the API. And they don’t probably have it neither.
Right after the announcement, the prices of skins started to lower down, because players were advised to retrieve their items from the websites. We were able to see an average drop of 13,7 % the evening after the announcement. Now, some of the websites mentioned in the letter already ceased their operation (an example being skingambling, others are still waiting to see what happens. You can check out the full list of the sites reactions here.
One way or another, we consider this a good step. There have been cases such as 14 year olds addicted to gambling and combined with all the scaming and scandals such as the affair mentioned, this didn’t put a good light on the whole skin/item trading market. It spoils the beauty of the game and deals a heavy hit to sense of fair play overall. Thanks to all players, hackers and journalists trying to uncover every dirty little secret there is. We’ll see how things work out now.
emkay, Trignom @ ESGA Team