New York is suing Valve, which says the game developer promotes illegal gambling

The New York Attorney General has filed a lawsuit against Valve, accusing the game developer of promoting illegal gambling among young people through its use of in-game “loot boxes.” Valve makes hugely popular games like Counter-Strike 2, Team Fortress 2, and Dota 2.

Attorney General Letitia James said in the complaint that Valve’s loot boxes amounted to “perfect gambling,” which is prohibited under New York’s constitution and penal code.PDF) was filed Wednesday in a Manhattan court. James said the problem is exacerbated by the games’ appeal to teens and children.

“Valve has made billions of dollars by allowing children and adults alike to illegally gamble for a chance to win valuable virtual prizes,” James said in a statement. “Illegal gambling can be harmful and lead to serious addiction problems, especially for our young people.”

Loot Chests – random treasure chests containing in-game items – allow players to pay real money for a chance to win rare virtual items used to decorate weapons or characters in an attempt to build prestige among other players.

Valve has made millions of dollars selling “keys” to open loot boxes, which James’ office says contain a virtual item “worth only a few pennies — far less than what they spent to open the loot box.” Valve sets the odds of winning particularly rare virtual items, which can then be resold on Valve’s Steam Community Market, generating more revenue for the game developer from their sale, according to the complaint.

“Valve’s loot boxes are particularly harmful because they are popular among children and teens, who are enticed to open loot boxes by the prospect of winning expensive virtual items that convey their status in the gaming world,” according to the complaint.

One game features a slot machine-like mechanism, complete with a wheel that spins around potential winning items, conveying the illusion of impending failure before stopping at one of the items.

The complaint also cited research conducted by the Massachusetts Department of Public Health that found that children who are introduced to gambling at age 12 are four times more likely to become problem gamblers later in life.

Valve representatives did not immediately respond to a request for comment.