The main fact missing from the article (and the comments here) is that most of the virtual items are initially generated through gambling with Valve.
The majority of items in CS:GO are initially generated by purchasing a key (for $2.75) to open a case. The game tells the user that the case contains one of a dozen possible items, but not which item. The act of opening the case generates an item that can be worth anywhere from $0.10 to $10,000. The in-game UI for this process even looks like a slot machine: https://www.youtube.com/watch?v=WpFlpyZ4eBM&t=1m45s
If you want a specific item, (rather than a random one from a case) you can buy it on the Steam Market. But that's a secondary market where the sellers are other gamers. The items themselves were still initially generated from playing Valve's slot machine game.
Valve has a vested interest in maintaining the perception that the items have zero value in real dollars. If the items had real dollar value, then the act of opening cases would make Valve a casino.
That's why when you sell your items on the Steam Market, you can only use the proceeds for other items on Steam. The money is steam dollars, not real dollars. There is no "cash-out" mechanism within Steam.
Of course, this perception is a farce because there is a large market outside of Steam for selling the items for real dollars. Two popular websites are https://opskins.com/ and https://bitskins.com/ . I don't believe that Valve can maintain their position that the items have a real dollar value of zero when lots and lots of people are trading them for real dollars. It's sort of like a casino saying the chips are worth zero because the cashier works for a different company.
I believe that this is at the root of why Valve is so comfortable with all the 3rd-party gambling sites. Valve has established their position that the items are worthless, so normal rules about money shouldn't apply.
It's sort of like a casino saying the chips are worth
zero because the cashier works for a different company.
This is exactly how pachinko gambling works in Japan. You win a prize (doll, medal, etc.) in the pachinko parlor, and sell it at the "we buy pachinko prizes" place next door.
You can - extremely rarely - get something valuable through the rank-up drop process. I got a skin worth ~$120 (FN M4A1-S Icarus Fell, one of the most valued patterns too) that way. It is incredibly good luck as the rest of what I've got ranges from $3 (once) to about 10c most of the time.
That seems to form part of Valve's escape plan if they're called on this. They can claim that gamers can get the items through other mechanisms that do not require monetary input. In reality, it's vanishingly rare that it happens.
Same with the monopoly game at mcdonalds (and now safeway/albertsons!). If they force a purchase to win its gambling, but if you send a letter to some address they have to give you a free game piece.
Not really the same. McD's is adding a lottery ticket on top of a regular purchase that sells high volumes at the same price when the lottery isn't running. valve is selling lottery tickets standalone..
Valve is basically doing what Wizards of the Coast has done for decades. I remember there were lawsuits arguing that packs of Pokémon cards should be illegal under gambling laws, especially for children. I can see the point, although I don't think such lawsuits will actually win.
I'd say that this problem isn't just with Valve. This strategy of gambling for virtual items with in-game currency is used in other games that use a freemium model.
Valve gets fewer complaints because you only spend real money on cosmetic items, it's not pay to win. But I think Valve has a better reputation than every other company that makes money off of gambling in video games. I usually assume companies are exploiting their players if they have gambling with in-game currency.
The CS:GO skins are purely cosmetic. I cannot, for the life of me, figure out what determines a price. There is the rarity aspect, e.g. a typical handgun is only a few cents while the lowest of knives is $50 or more. Beyond that there are "StatTrak" versions of each skin that visibly show confirmed kills on the weapon. Neat, but purely cosmetic. Those skins are usually several multiples of the regular version of the skin. Those factors will effect the price, but two comparable skins based on those factors will have drastically different prices.
Fads and scarcity! StatTrak versions of skins drop less than those without. Then patterns that people like. I haven't checked CSGO skin sites for awhile but normally multi-colored "fade" skins will all-blue patterns were very popular about a a year ago. How beat up the skin is determined by a number between 0.00 (best) and 1 (worst), so skins with a very low or very high "float" are apparently more desirable.
> colored "fade" skins will all-blue patterns were very popular about a a year ago
Yeah, that appears to be the case. I unboxed a +$300 M9 Bayonet the other week. I think it looks pretty shitty, but hey, who can complain when you can resell it? I kinda get the impression that folks just kinda jump on the bandwagon on certain skins at this point, that they desire to have something valuable rather than something they think looks good.
It's all about showing off. Who has the most expensive skins, coolest looking skins, etc. I have a buddy I play with, he'll drop $100 on a skin on the secondary market and loves it when someone gets all bent out of shape because he has such nice/valuable items.
Others in the thread have touched on this, but this is definitely ensnaring naive, young kids into gambling and taking risks with expensive items. Seems at least once a week I'll be in a match wherein a prepubescent kid will tell his team how he gambled away $100 worth of skins, or got scammed by a "friend" in some kind of gambling pool. Folks also are constantly trying to trade-up, to convince someone to take a skin with less value for one of greater value. I personally unboxed a +$300 knife skin, and at least once a day I get some telling me some sob story, trying to get me to trade it for whatever shit they have to offer.
I was so glad when Valve finally let you set your Steam Inventory to private (or friends only), as for a while I got a random friend invite or message from a stranger wanting me to give them my TF2 hats.
The best part of that was how many of them wanted me to just give them my hats rather than trade anything for it, given my somewhat low playing stats I guess they assumed I was dumb enough not to realize the trading value of one hat in particular (which I actually do wear when I randomly play TF2, so hah). So many "Hey, I see you haven't played TF2 in a while. I like your hats, would you give them to me as I play TF2 a lot and want to look cool" messages...
Again, glad that my Steam Inventory is now private and I don't see that any more.
Hell, my problem is just people spec'ing me in game and asking me to either make a lopsided trade or, as you mentioned, just go give it to them. I think I got at least a dozen friend requests from strangers the day I unboxed my M9 on a maxed out casual server.
Just checked what the four most popular game of all games on twitch.com are.
At this moment they are, in order of viewers:
- Dota 2 (in-game gambling, 3d party sites for cashing out)
- Heartstone (game revolves around in-game gambling, no 3d party allowed)
- League of Legends (only 3d party sites!)
- CS:go (in-game gambling, 3d party sites for cashing out)
So from only looking at the very top games 3/4 involves heavy use of in-game gambling. Them being popular competitive games it's natural that e-sports betting is available for all of them. In 2/4 it's trivial to cash out in the other two's you'd have to sell your account.
I would distinguish Hearthstone (a.k.a Wizard Poker) from the rest; Hearthstone is fundamentally a gambling game.
However, I would also distinguish the "in-game" gambling in Hearthstone from CSGO because there is no legitimate or practical way to monetize your card collection. Once (or if) you have all the cards, there is little incentive to keep buying packs as you can only play with cards. In CSGO however, there is always the potential to open a new valuable skin that can be sold.
There's different twists to it, no doubt, it's just distracting the point I was making though.
I just found it highly interesting that 12 year old's gambling was such a recipe for success that 3 out of 4 of the most popular games out there have it as a core feature.
I tend to have a Bigger issue when it's in-game than out of game because do you really want the worlds best digital-heroin makers to run casinos where your kids are the guests?
There were several big Pinball machine bans that nearly killed Pinball machines (the big one being New York City's 30 year ban). I do think that all it takes is a couple of concerned parents or a well respected congress member watching a few Twitch streams too many and watch that bloom into a bit of a moral panic and suddenly you'll see some gambling law based videogame bans.
How is this more of a farce than arcades that allow you to trade tickets for prizes? These prizes have a cash value in a secondary market.
To me, "gambling" is kind of an arbitrary concept. Would you say that universities are casinos as well? They let students assume risk with an unknown payout.
It might be that I'm not defining gambling properly. I'm curious, how would HN readers define gambling?
This story isn't about Valve but the author sure made it seem like it was. A third party site uses Valve's API to enable users to bet skins on esport competitions. This third party site uses Valve's API. Valve is in no way involved in betting. The only thing they haven't done is turn off access to the API for this third party company.
This is probably more because of Valve's management structure than it is about any policy. Valve is a flat company with no managers. People work on what they want to work on. Jobs like customer support and policing API use are akin to taking out the trash, nobody wants to do it but someone has to. It just isn't a priority.
Anyway, ignorant article with a dishonest attempt at trying to spin two things together "illegal betting!" "valve" and failing.
No, Valve sells scratch-off tickets. Or if you like, they give you the ticket ("case") and sell you the coin to scratch it with ("key"). Same thing.
They're not directly involved in the sports betting aspect, but they'd be running an illegal lottery without the fiction that their digital goods have no real world value, which is the same fiction maintained by the betting houses.
It stretches credibility to say they aren't very involved.
I don't buy "scratch-off ticket" analogy. How are those crates with randomized prizes different from a pack of pokemon cards that are randomized with cards with differing value? They are pretty identical in the terms we are talking about.
To the extent that there is a liquid secondary market in trading cards, I'm not sure there is a real line between them and retail gambling instruments. But, some things cases have more in common with scratchers than Pokemon booster packs:
- They're available instantly in effectively unlimited quantity, as many as you want to buy.
- Although technically there are many gradations, the quality label of an item ("Factory new", "battle-scarred", etc.) is incontrovertible and easily verified.
- As a digital good, liquidation is extremely low-friction and virtually risk-free. In fact:
- You can click a button from within the game itself to see the current market value in USD -- sorry, in "Steam credit" -- and another to immediately offer the item for sale at that price.
- Maybe most relevant to this thread, even without liquidating they can be easily used as currency to participate in unregulated online roulette, slots, sports betting and more.
Astute analysis, Valve's proximity to the secondary market seems to be the issue here. They also appear to allow you to generate keys for games that can then be sold[0][1]. This provides you with an indirect way of cashing out your earnings.
They don't allow end-users to generate keys for games - that is restricted to the publishers or game creators (in smaller cases).
The keys on those sites are generally sourced from physical copies in cheaper regions (as mentioned in a sibling comment), cheaply sold bundles (Humble Indie Bundle, and other similar sites), and other such sources.
You could possibly make an argument for gift-copies of games[0] being resalable, or games that can be added to third party systems (ME2 gives a CD key that can be added to Origin, for example) though the latter would be limited to one attempt per-game per-account.
Valve makes money when people buy or sell skins, which in this case is akin to buying or cashing in one's poker chips. There's also no way that Valve doesn't know that this is going on. While they're not involved in the strictest sense, they continue to allow this gambling to happen (by not policing their API) and make money by doing so.
I wonder what the legal implications are for valve here, vs the third parties that are facilitating the gambling. Surely the companies taking bets are also taking a rake (how else would you pay for your infrastructure/support overhead) and this is illegal in most of the US. Does Valve, by indirectly profiting from the wagering exchange actually bear some (legal) responsibility?
A better question would be whether NASDAQ or any other stock exchange is responsible if people use them to trade poker bets. What if NASDAQ was making a large profit on those exchange fees?
Valve is not only issuing the stock, but it's also acting as the stock exchange and taking exchange fees. It may not make them any more "responsible", but there is a whole lot of moral gray area there.
>Anyway, ignorant article with a dishonest attempt at trying to spin two things together "illegal betting!" "valve" and failing.
How is a system where you spend real money in the hopes of receiving a valuable item by random chance not considered betting/gambling? Because that's effectively what system like the skins in CS:GO is at its core.
As someone pointed out above, that's not different than trading card games. It's arguably more restricted than real world trading cards because you can't sell them outside valves market.
That's what I meant. The game is not centered around skins. It is not a "Collectible Skins Game", but an FPS. CCG's are, as the name implies, all about the cards and what you can do with them.
Assuming that Valve just hasn't gotten around to closing this loophole seems remarkably charitable, if not naive.
Valve is making untold millions on people gambling for items in the game itself. They're looking the other way as secondary markets allow for monetization. I respect Valve as a game maker, but I have no respect for this extremely dubious, gray-market gambling. Claiming that the article is "dishonest" when Valve is one of the largest beneficiaries of this seems dubious.
It's also worth noting that this is very real money. I can put $70 on my Steam account and buy a new triple-A game....or in the land of Valve I can sell some skins and buy the game. It is trading things in CS:GO for real world value, so comparisons to closed-systems (throughout this thread) seems deeply suspect. I can also use that CS:GO loot to "gift" a new game to a friend who then pays me in the real world. And so on.
How on Earth did anyone get through that entire article without using the phrase "skin in the game"? I'm not sure whether to be impressed or disappointed.
CSGO gambling is fairly profitable because there is a lot of information asymmetry and a long tail of inexperienced gamblers. I believe that will change, because CS:GO is a more quantifiable game than many others:
The goals are easily defined: kill everyone, or defuse the bomb (usually kill everyone).
The available stats are pretty representative of how matches go.
There is a compounding effect between rounds, since you choose to buy weapons each round based on if you didn't die and still have weapons or how much money you have left.
The biggest issue I can think of is how many kids will lose their cash. There's no 18 year old requirement on the internet!
If our brains have a hard time distinguishing between perceptions of reality and imagination, what would make anyone think that currency, or tradeable goods would be any different? Games like Clash of Clans scare the hell out of me already, I can't imagine stumbling into a gambling addiction at 19 years of age...
That is, I think it says more true things (that are more an analogy than an exaggeration) than we're generally able to admit or even process. Our plates are so full that our tiny spoons sometimes strike me as fig leaves rather than eating utensils.
It took me a good 15 seconds to read the subtitle with that background repeatedly stabbing me in the eyes. Bloomberg's design aesthetic is certainly unconventional.
It indeed is a painful image to look at, I don't know why some articles start out like this, I'm not particularly fond of this style for articles I'm trying to read. Not sure when this became a thing, some articles do it right, but if it's done in every single article it doesn't always work out, it's like a place holder wasting my screens real estate.
My older son has been engaged with this - mainly DoTA2, CS:GO and H1Z1. He has had a fairly limited budget of real cash in (a few 10s of pounds) - and has taken (and lost) significantly more than that in game through tournament prizes, trades, gambling & drops.
My initial impression was rather negative - but I do concede that it has acted as a kind of 'Kerbal Space Program' for markets and gambling - including the spectacular explosions. He now has a far better understanding of supply, demand and timing, along with a healthy respect for probability and risk vs. reward.
It may have worked for him because of limited funds (have to go in thru' my card), and there were things inside the system (knife skin) that he really wanted to acquire.
I did, however, get him to name that knife 'SSD' in honour of what he could have bought if he cashed out.
Blaming the gambling that's occurring on the virtual goods is quite silly. People aren't gambling the e-guns because they want them, they have a dollar value associated with them. This gambling could just as easily occur with bitcoin.
I've spoken to dozens of gambling addicted teenagers in counter strike. You're mistaken. The guns themselves are a status symbol which, combined with their financial value, makes this way more enticing to them. They see their favourite players (often sponsored by gambling sites) using them, and want to do the same.
I've mostly stopped playing the game because it's too depressing and sickening to talk to all of these kids, with undeveloped reasoning faculties, throwing away every cent they get into bets they're convinced they'll win, until it's all gone.
I have more experience with DoTA2 which is another valve game and virtually (DoTA2 has way more worthless items) the same the situation.
You have people who want the status symbol of owning a golden e-hat and are willing to pay for it on the open market. The gambling portion is largely separate situational.
Where are their parents? How are these kids throwing away any substantial amounts of money without their parents knowing? Surprise, if you don't supervise your kids, they do stupid shit like gamble away lots of money. If it wasn't Counter Strike skins, it would be marbles or poker or sports.
The annoying thing is the amount of people whining about their losses or gloating about their wins. I couldn't care less about gambling, so to me it just drowns the discussion about the game itself.
Not to mention the unpleasantness when I read a tweet by a pro saying "sorry for letting our fans down today" after a loss, and the first reply is some random guy blaming them for the skins they lost. Maybe they're just trolls, maybe they aren't, doesn't really matter.
At least during LAN tournaments the casters and analysts almost never mention gambling, and would rather talk about the game and the players. Hope it stays this way.
You are upset that people enjoy a videogame differently from you. Maybe the gamblint is the game (that's where the money is made) and the fighting is the sideshow.
If HN news threads suddenly started to be filled with comments such as "made $500 betting on the Falcon 9 first stage to tip over after landing", would you also answer "you are upset that people are interested in news for different reasons than you"?
Rather, I would expect the community/mods to either downvote/remove comments about betting, making it clear that betting should be discussed somewhere else, or upvote/tolerate them, making it clear that people who prefer not hearing about betting should go somewhere else.
Of course, going somewhere else requires effort, so my selfish hope as someone not interested in betting is that the communities I browse will pick the first option.
Not really that accurate; sure they access the valve servers, however most all of them use custom software made by reverse engineering the steam client called steamkit [1] and it's forks. Steam doesn't provide any public api's for trading.
[1]https://github.com/SteamRE/SteamKit
Apparently, allowing players to gamble in game for real money, fine. Allowing people to gamble for them and then sell them through third party sites, fine.
But featuring a casino in a game causes the age rating to go up, even if it's non interactive (at least in Europe)? Letting people gamble with fake money that can't be exchanged for anything outside the game (in a casino esque) setting causes the rating to go up?
Yeah, some of the media watchdogs have really screwed up priorities. Apparently they find the Pokemon Game Corner more offensive than the mobile app 'freemium' content or CS:GO case gambling.
The core question here ends up being 'how many hops' in two senses: how many hops will users tolerate & how many hops make it legal? Make A >= B and you have yourself an arb.
This isn't the only new area of law where levels of indirection matter; it's true with anonymization in online privacy as well.
People literally playing 50-50 coin flip games with skins, sometimes with somebody else, or sometimes even just against a "bot". Its pretty crazy. Its started with betting on matches, which i think is kinda okey, but i think coin flip is the end. (cs:go player)
The ammo for the virtual one is a lot cheaper. I met a gun collector who liked to play Call of Duty because it had guns he owned in real-life, but in real-life he could only use them at the range or in case of zombie apocalypse. I told him I played Team Fortress 2 and explained what it was and he said "I don't like fantasy games". So there are people out there who try to collect the real and virtual versions in pairs.
Sought-after skins for the most-used rifles are often more expensive than knives. AWP Dragon Lore (doesn't drop from cases) and AK-47 Fire Serpent (only dropped from the very first case) are the most expensive skins AFAIK.
I read the article twice but still don't get how this thing work: are they gambling that certain player(s) with specific skin come up winning? (so the skin makes it easy to identify players)
Its a bit sad to see the gambling sometimes overshadowing the esports sides of things. I'm not a huge CS:GO fan but as a Brazilian the MLG Columbus major was very exciting to follow :)
From the gambling house's side it avoids regulation, plain and simple.
From the gambler's side: People already own skins (from playing normally) or want skins that would be expensive to buy outright. Gambling provides an exciting way of exchanging them. This kickstarts the gambling market. This initial activity then attracts more serious gamblers looking to make a profit in this low-regulation gambling environment populated by many inexperienced gamblers. Cue feedback loop as more and more serious gamblers get involved.
Indeed you can't take money out of them, and the various app stores have pretty strict policies about this. Honestly, if Valve gets worried about gambling laws they could learn a few things from casino apps here. There are a few of them out there where you can "buy" something like a hotel comp using an in-game currency. This is actually ok for a number of reasons but two big ones are that:
- The currency you use to get these IRL items is not the currency you play with and is not necessarily directly related to real money. It's more akin to frequent flyer miles getting you a free flight. That is to say, it's more "how much you play" and less "how much you pay".
- There simply is no secondary market for these IRL items because they're tied to you personally, are non-transferrable, and can't be traded for cash. So while they have real-world value, they're worthless to anyone but you specifically
But Steam items can be exchanged on 3rd party sites for real dollars. So let me pose this question. If I created an iOS app whose only purpose was to purchase CS:GO Shadow Cases, would Apple deny the app?
The majority of items in CS:GO are initially generated by purchasing a key (for $2.75) to open a case. The game tells the user that the case contains one of a dozen possible items, but not which item. The act of opening the case generates an item that can be worth anywhere from $0.10 to $10,000. The in-game UI for this process even looks like a slot machine: https://www.youtube.com/watch?v=WpFlpyZ4eBM&t=1m45s
If you want a specific item, (rather than a random one from a case) you can buy it on the Steam Market. But that's a secondary market where the sellers are other gamers. The items themselves were still initially generated from playing Valve's slot machine game.
Valve has a vested interest in maintaining the perception that the items have zero value in real dollars. If the items had real dollar value, then the act of opening cases would make Valve a casino.
That's why when you sell your items on the Steam Market, you can only use the proceeds for other items on Steam. The money is steam dollars, not real dollars. There is no "cash-out" mechanism within Steam.
Of course, this perception is a farce because there is a large market outside of Steam for selling the items for real dollars. Two popular websites are https://opskins.com/ and https://bitskins.com/ . I don't believe that Valve can maintain their position that the items have a real dollar value of zero when lots and lots of people are trading them for real dollars. It's sort of like a casino saying the chips are worth zero because the cashier works for a different company.
I believe that this is at the root of why Valve is so comfortable with all the 3rd-party gambling sites. Valve has established their position that the items are worthless, so normal rules about money shouldn't apply.