Valve Corporation has formally responded to the regulatory agency investigating its proximity to and alleged enabling of skin betting, and has insisted it does not facilitate gambling—legal or illegal.

Valve counsel Liam Lavery wrote in a three-page letter to the Washington State Gambling Commission that the operation of its Steam API, which unlicensed third-party gambling sites use to facilitate casino and sportsbook-style betting, is lawful under Washington state law.

Techraptor posted the letter Monday night. It is available here.

The WSGC had originally ordered Valve to respond by Oct. 14, and told the company to stop allowing the transfer of skins, which are virtual in-game items, via Steam.

Valve questions legal basis for WSGC’s demand

Lavery asked the commission to provide it with a specific law that it was violating, and said Valve did not understand the “legal and factual reasoning” supporting the commission’s position.

He also said he was unsure of how the WSGC expected it to shutter illegal gambling.

In the following sentence, however, the letter alluded to one way of doing this: shutting down Steam entirely.

“The commissions (sic) main argument seemed to be, ‘Valve could stop this, so it should.’ We do not want to turn off the Steam services,” Lavery wrote.

Valve reiterates lack of financial, promotional connection with skin sites

Lavery wrote that Valve is aware that websites offer gambling propositions “outside of Steam and, we believe, outside of the United States,” and that those websites may accept skins “as wagers from other users.”

He told the WSGC that Valve neither receives revenue from these sites nor promotes them.

The comments echoed the only public comment the company has made regarding skin gambling this year, which came in mid-July when it posted a note on Steam itself threatening action against gambling sites that continued to use Steam.

On Tuesday, Lavery wrote that skin gambling sites utilize the API in two ways.

The first is in using it to facilitate the transfer of skins. This can occur between two players trading skins, or it can happen between two players buying or selling skins for Steam Wallet funds, which constitute Steam’s virtual currency to use in its marketplace.

(Another method of transferring skins, between a player and a trade bot, allows an automated bot to trade skins to a player as payout for winning a gambling bet. Steam’s API prohibits this.)

The second way, Lavery said, is by facilitating Steam authentication. This allows users to identify themselves by their Steam credentials without having to give that website their personal information. Many other tech companies also employ this “OpenID” system.

“None of these activities are illegal in Washington or any other jurisdiction, and we do not believe the commission contends to the contrary” Lavery wrote.

But the WSGC did not ask if Valve made money off of, or partnered with, these sites. Nor did it ask if third-party sites’ use of Steam was legal. It asked that Valve stop facilitating the use of skins for gambling through Steam.

[geoip2 region=’ROW’][show-table name=betway][/geoip2]

Valve says it’s not necessarily able to identify all bot accounts

Lavery noted that Valve has taken several steps to address the use of skins. He cited a July note that threatened action against Steam accounts that violated its user agreement, and the two cease and desist letters it sent later that month to 42 skin gambling sites.

But Lavery characterized the extent and scope of the problem as too vast for Valve to control.

“We do not know all the skins gambling sites that may exist or may be newly created, and we are not always able to identify the ‘bot’ accounts that particular skins gambling sites may use to effectuate trades,” his letter read.

“Cleverly designed bots can be indistinguishable from real users performing legitimate trades.”

Despite Lavery and Valve’s confusion over how to comply with the WSGC, the letter concludes by describing yet another way the game maker can do just that.

Lavery appeared to address the potential identification of bots based on the gambling site in connection with which they were used to facilitate trades.

“Valve can enforce its user agreement against the Steam accounts of skins gambling sites, where we can identify the site and identify the corresponding account. In fact, we would be happy to cooperate with the commission, if it is able to identify more skins gambling sites that are illegal in Washington,” Lavery said.

This policing of skin gambling sites could require significant time and legwork, and it’s unclear if the WSGC would identify the sites for Valve as the game maker appeared to ask.

Either way, it could foreshadow a potential way forward in combatting skin gambling not just in Washington, but all over the US.

Effect of the C&D letters was muted at best

A few of the sites in Valve’s July cease and desist letters reported trade bots being banned, but the majority either voluntarily shut down or brazenly kept running.

Those letters noted that the sites in receipt were gambling sites, and told the sites to stop utilizing its API for any commercial purposes. The C&Ds did not specify gambling (legal or illegal) as the specific use it was referring to.

After the letters were sent, Valve’s apparent enforcement of its own user agreement came to a halt. Now, the problem of skin gambling is growing for Valve, regulators, and others, not shrinking.

Three months after Valve sent its C&Ds, roughly half of the sites it ordered to shut down were still operating commercial gaming or gambling products using Steam and CS:GO skins.

Just in the time since the WSGC sent its Oct. 5 C&D letter, at least four new skin gambling websites have launched:

• CSGO4Rolls
• CSGOLuminance
• CSGOASD
• CSGOUber

As many as 100 skin gambling sites are believed to be in existence.

Do not expect swift action to Valve’s response

Sources close to the investigation have indicated that regardless of the content of Valve’s response or non-response, it will likely proceed with especial caution. The timetable could be reflective of a slower, step-by-step approach that’s already underscored the WSGC’s investigation so far.

Despite the WSGC saying that Valve’s communication and cooperation broke down soon after the February meetings with Lavery, and despite the skin gambling industry growing over the first half of 2016, it wasn’t until Sept. 27 that the WSGC sent a blunt letter to Valve CEO Gabe Newell.

That letter threatened search and seizure of gambling-related property. While that specific action still appears unlikely, it would require time-consuming preparation, the cooperation of other law enforcement agencies, and possibly the securing of a warrant.

Following the February meetings, further attempts to contact Lavery and the corporation were not successful, according to the commission.

That account contrasts with Lavery’s letter, which alludes to conversations ongoing between both parties for 18 months, since April 2015. Lavery wrote that Valve and the WSGC last spoke on Oct. 3, two days before the WSGC send its cease and desist notice.

The WSGC could also be looking to other game developers’ reaction to the third-party use of in-game items as guidance.

Last week, game maker CCP changed the in-game license agreement for its game Eve to prevent items from being bought and sold, with the aim of discouraging skin gambling.

Another reason the process could take inordinate time is the makeup of Washington state’s gambling laws, which are among the most expansive and rigorous in the nation.

A two-part response

WSGC Executive Director David Trujillo expressed disappointment at the company missing the initial deadline. The game maker first responded to the WSGC on Friday in a brief email, in which it said it needed until Monday, Oct. 17, to prepare everything it needed for its full response.

“I am disappointed that Valve Corporation missed Friday’s deadline, but encouraged that they have committed to responding today. I look forward to reviewing their response in detail,” Trujillo said Monday, before Valve’s full response came through.

“The type of approach Valve decides to take will be very important,” said WSGC Commissioner Chris Stearns on Monday in regards to the investigation.

Stearns’ remark could foreshadow the wide-open nature of the investigation, and the special and detailed scrutiny the commission is giving to Valve’s response.

The same sources that spoke to the potential timetable of the investigation characterized Valve’s response prior to Monday’s letter as “extremely cavalier.”

The WSGC did not respond to comment Tuesday morning following Valve’s full letter, but said in a statement it was considering Valve’s response to see if it satisfactorily addressed its concerns.

The commission said it will “continue to evaluate its options” regarding the violation of Washington’s gambling laws.

As game maker Valve has come under fire in recent weeks for facilitating unlicensed gambling via its Steam API, the skin wagering landscape has shifted dramatically, with commercial gambling operators filtering into separate camps of compliance and contravention. 

ESBR’s October Skin Wagering Scorecard catalogues reactions by websites instructed by Valve in July to cease-and-desist using Steam.

It also embellishes how the skins market could react as regulators begin to take notice, and as courts begin to address skins as a virtual currency.

More, not fewer, sites appear to be violating Valve’s C&D orders

As of mid-August, roughly half of the named sites the game maker told to stop using its API had shut down. Eight were still operating in apparent violation of Steam’s terms of service by virtue of using Steam to conduct commercial activity.

Several more were either in the process of pivoting to a new business model, or had future plans that were unclear. 

Now:

• At least 19 sites are utilizing Steam in connection with commercial gaming or gambling.
• Five of those sites appear to US users as if they’re shut down, but are offered to users in other countries around the world.
• Five of those sites initially shut down and appeared to obey Valve’s C&D demand, but have since relaunched with equally violative products.
• Three of those sites not only failed to shut down, but have expanded their Steam-related gambling offerings to include sportsbook-style betting on matches.
• Three of those sites do not accept skin deposits themselves, but only accept as gambling currency coins from third-party, skin-to-coin deposit sites, which still involve Steam.

This illustrates not only the selective policing by Valve of the skin gambling ecosystem, but also the recurring, potentially unenforceable problem of operators popping up faster than Valve, or even regulators, can shut them down.

In fact, dozens of skin wagering sites not named in July’s two C&D letters are also operating, largely unfettered.

Some sites continue to comply, or have since complied, with Valve’s C&D

An additional 19 sites that formerly utilized Steam in connection with commercial gaming or gambling are now shut down.

Two other sites, CSGOLounge and Fanobet, are still operating the type of sportsbook-style match betting that made them popular, but are no longer using Steam or skins to do so.

Two other sites appear to have been targeted incorrectly, and never used Steam or facilitated gambling in the first place. Therefore, those sites have not altered their operational model.

19 sites still utilizing Steam in connection with commercial gambling

The Washington State Gambling Commission last week instructed Valve to explain how it has not violated Washington State gambling laws by virtue of owning and operating Steam (the company is based in Bellevue, Wash.).

If Valve cannot give the WSGC a satisfactory answer, it risks criminal charges and seizure of property, among other inconveniences.

One of the ways in which Valve might try to make its case is by arguing the C&Ds it sent to 42 skin wagering websites constituted an act in good faith to prohibit those websites from operating.

But it could prove challenging for Valve to argue even this point when regulators consider that nearly half of the sites named in the C&Ds are now using Steam in connection with commercial gaming or gambling transactions.

In fact, more of the named sites are using the Steam platform in connection with skin gambling now than were using it in the direct aftermath of the C&Ds.

Even though some sites don’t directly accept skin deposits via Steam, they nonetheless rely on users’ Steam accounts in various forms to transfer some form of virtual currency, or turn skins into some form of virtual currency.

CSGOFast

CSGOFast appears to American users to be offline. A message on its website reads:

“In light of the recent announcement from Valve CSGOFAST has decided to close operations. All bots are stopped now, games are not functioning.”

But to users elsewhere in the world this message not only doesn’t appear—it’s flat out wrong. Instead, the site is not only functioning, but is bigger than it was before.

Fast runs both real-money and skin gambling operations using the G2A Pay suite of payment options, which include real-money processors like MasterCard and Discover.

Users can also deposit skins on the site via Steam.

Users convert either real money or skins to Fast Coins, which are then used to bet on the site. The site uses Steam, in part, to facilitate not only the conversion of skins to coins, but of coins back to skins.

Because coins hold no real-world value outside of the Fast ecosystem, users cashing out must purchase skins with coins in the Fast marketplace in order to derive anything of real-world value from their winnings.

Once a skin is purchased, it’s transferred to one’s Steam wallet, which again establishes the API as a tool by which to transfer items won in connection with commercial gambling.

Separately, in conjunction with HLTV.org, Fast also facilitates sportsbook-style skin betting on the outcomes of professional esports matches, against leveraging the Steam marketplace in a violative manner to transfer skins for the direct purpose of betting.

For more on Fast, see page 8 of this new report from ESBR and Narus Advisors.

CSGOBig

After disabling its casino-style skin gambling games just days after the first Valve C&D, CSGOBig relaunched on Aug. 31 and is once again using Steam to offer unregulated skin gambling across jackpot, raffle, coinflip, roulette and other games. 

Users on the site appear to only be able to deposit skins, and not other forms of virtual currency. Those in need of skins to deposit are encouraged to visit Bitskins, where they can purchase skins with real money and then deposit those skins into their Big account, which in turn turn to virtual coins players use to wager on the games.

Similar to Fast, users from the US are met with a site that appears dead. But gamblers from other countries can access Big in its fully-functioning entirety.

This could be problematic for Big, Fast, and other such sites because Valve mandated in July that they stop using Steam to facilitate commercial gambling the world over, not in the US only.

Big’s terms of service, which visitors are prompted to agree to after signing in through their Steam account, mandate users be over 18 and not a resident of the US, but the site employs no verification process to ensure this.

The ToS say that users are also “responsible for compliance with any applicable local laws,” and that the terms themselves are construed in accordance with the laws of the European Union.

“Any disputes relating to these terms and conditions will be subject to the exclusive jurisdiction of the courts of European Union,” the terms read.

Big is one of many sites that offer cash back promotions to users who include the phrase “csgobig.com” in their Steam profile name, which effectively advertises for the site directly on the API whose terms it’s in violation of in the first place.

CSGOStrong

CSGOStrong, a skin gambling roulette site, continues to block US users but operates elsewhere using a workaround it first employed in early August. Users may only deposit and gamble with coins from skins-to-coins site Skntrades, also known as SKN points, and not skins themselves.

Users receive SKN points by depositing their skins on Skntrades and receiving SKN points in return. They then transfer those coins to their Strong account. Cashout functions in the reverse form.

Despite this workaround, gamblers must still log in with their Steam account in order to use the site and receive or transfer their SKN points. In other words, Strong is still using Steam to facilitate commercial gambling even if Steam is not directly facilitating the transfer of skins to Strong itself.

Strong maintains its game is legal because SKN points have no monetary value. However, SKN points are earned in exchange for skins.

Skins, in turn, do have a real-world value thanks to third-party marketplaces like OPSkins, Bitskins and others that facilitate the purchase of skins for $USD.

Strong’s terms of service say the site is “governed by and construed in accordance with the laws of Costa Rica, and any disputes relating to the Terms and Conditions will be subject to the exclusive jurisdiction of the courts of Costa Rica.”

The ToS also forces users to agree that:

• They are 18 years old or of different legal age as might be required at the jurisdiction from which they access Strong in order to engage in its activities.
• They are not accessing the website from jurisdiction from which it is illegal to do so (the website is freely accessible from the US).
• The owner of the website is not a financial institution and that, “no legal requirement to obtain any type of licence in order to provide services offered at the Website are in force at the jurisdiction from which the Website is being accessed.”

CSGOCrash

According to this site, Valve personally targeted the site in mid-August after it failed to comply with the company’s first C&D.

CSGOCrash said someone, likely the game maker, was blocking its trade bots—the automated mechanisms websites create to facilitate gambling pay-outs and pay-ins over Steam.

This disruption rendered the site effectively unable to conduct skin gambling. It also illustrated a key tool Valve has in its arsenal to end skin gambling, but has not yet chosen to use: The ability to manually block every trade bot associated with every skin wagering website or transaction. 

The Crash site appeared to either shut down or to block users in the US in late August. Its accessibility vacillated throughout the month of September.

Now, like Big, Fast and Strong, Crash has blocked itself to US users while those from other countries are allowed on, and prompted to sign in with their Steam account.

Oddly, the site’s FAQ page, which US users are also blocked from viewing, discusses problem gambling and links to the National Council on Problem Gaming, an American organization that advocates for programs and services to assist problem gamblers.

The FAQs also freely admit that coins used to bet on Crash:

• Are “backed” by Steam skins.
• Are acquired by the depositing of skins, via Steam, onto its platform.
• Have a $USD monetary value of 1/10th of one cent.

The site even allows users with large YouTube or Twitch followings (minimum 10,000 subs and 100,000 views) to receive “special perks” if they connect their Crash account with their streaming account.

Popular esports figures streaming their gambling on a site to their following serves as a critical driver of traffic to skin sites. It’s unclear to what extent YouTube or Twitch endorse, or police, casters using their platforms to promote esports wagering.

CSGO500

CSGO500 is one of the few skin gambling websites operating that has blocked itself in more countries than just the US.

Attempts to access the Wheel of Fortune site from the UK and Canada also did not work.

Log-on attempts from Eastern European countries like Poland and Romania, or from Scandinavian countries like Sweden, on the other hand, did work.

Despite not being available in most countries where English is spoken, 500 prompts users to read its terms of service in English before entering.

Similar to CSGOStrong, for example, users cannot log in to the website via Steam. Instead, 500 accepts “Bux,” which are obtainable by users simply by depositing their skins somewhere else (at skin exchange platform SkinX).

SkinX, however, requires users to log in with their Steam accounts.

CSGOBubble

CSGOBubble also went dark in the wake of Valve’s C&D order, but teased a new product and vowed to return. 

The coinflip site did not tweet anything between Aug. 17 and Oct. 1, but an announcement at the bottom of its home page says that its new site is now live. The site prompts users to log into Steam and utilize its trade URLs.

The site’s terms of service make it clear that Bubble does not consider itself a gambling site for real money. It reads in part:

“By using CSGOBubble.com you agree that you will deposit virtual items to play. Understand that this is not a gambling website for real money.”

In the next line, Bubble acknowledges that, based on data collected from Steam, the items players win on its site have values.

“Skins (sic) value are for comparison purposes only. The values of each virtual item are based on analytics collected from steam market transactions.”

But the terms do not acknowledge the real-world value those items have on marketplaces outside of Steam, such as OPSkins.

The site is one of many that lists the G2A marketplace as a partner. The capacity of that partnership, which could range from skins marketplace and pricing provider, to a full payment solutions system, is unclear.

CSGO2X

To be clear, CSGO2X is not currently utilizing Steam in connection with any commercial endeavors. Yet.

CSGO2X had shut down following its receipt of the first Valve C&D on Jul. 19, and has not been active since.

But on Monday it announced it would relaunch on Oct. 15 and that it would be giving away a $400 skin.

Its exact product offerings are unclear, but based on the nature of the announcement it appears that skins, in some form, will be a component of the new CSGO2X.

No skin gambling website, either one that accepts skin deposits via Steam or one that does not, has yet proven able to operate without utilizing the API at some point of the wagering ecosystem.

CSGO2X’s website currently prompts users to log in with an email and password, but attempts to sign up for an account now bring visitors to a blank page.

CSGOCasino

CSGOCasino was among the sites named by Valve that was believed to have quickly complied with the C&D. Attempts to visit the site from an American IP address in August were unsuccessful, and the site was believed to have shut down completely.

On Oct. 2, however, its Twitter account said the website had returned. Users from anywhere can access the site and must log in to their Steam accounts in order to play.

Casino offers both traditional roulette and the popular crash game, in which players attempt multiply an amount of wagered coins. They do this by selecting a multiplier that is less than a randomly generated amount, which grows and grows until it “crashes.” 

Society.gg

Society.gg also shut down in the wake of Valve’s C&D, but quietly relaunched in beta on Sept. 30.

The site prompts users to log in to their Steam accounts, and offers the standard skins-for-coins conversion, except here coins are referred to as bananas. Users can use coins to play “bust” (aka crash) “Wheel of Fortune” (aka roulette), as well as coinflip and jackpot games.

Among the more intriguing aspects of Society.gg is its terms of service.

The “most exclusive CS:GO betting platform,” as it touts itself, forces users to agree to terms that state the user of the site is at least 18 years of age, or the legal age in their jurisdiction. Like most skin sites, Society employs no age or geolocation enforcement tools.

Aside from the fact that there is no “legal age” for skin gambling in any jurisdiction, since skin gambling is not legalized or regulated, two sentences later the ToS appear to contradict themselves when they say, “you must be at least 21 years of age to use Society.gg.”

.Gg is the domain for the United Kingdom crown dependency of Guernsey, a tiny island located near France. The country has built a reputation as an “eGambling” regulatory hub and passed a set of eGambling regulations in 2009.

CSBetGo

CSBetGo is yet another site believed to have shut down following the C&D, but is now back up and running. It is accessible to users in every country and requires users to log in to Steam to place bets.

The site appears to deliberately have a low profile. It does not have a Twitter handle, and hasn’t posted on Facebook in nine months. Few users were visible on the site when it was visited this week.

Oddly, the site’s terms of service say that the website is only available to Ukrainians, but the site does not provide any geolocation capability to block users from other countries. Like most sites, it defers the responsibility to the user.

“If you want play in countries where gambling is illegal, you do so at your own risk,” the terms read.

CSBetGo is one of the few sites that list a conversion rate for coins, (or in its case, “tickets”) to USD. One $USD equals 100 tickets.

However, $USD are not directly convertible to tokens on the site. Instead, when users deposit a skin, they receive only the “ticket” amount of whatever the listed USD price is on CSGOAnalyst, a marketplace, for that skin.

CSGOSpeed

CSGOSpeed briefly went down for maintenance in mid-August and came back online around the end of that month. In a notice, the site said it intended to “return with an alternative that complies with Steam’s Terms of Service and Subscriber Agreement.”

When it relaunched, Speed offered a redesigned product with flashy skin giveaways, a jukebox playing Bruno Mars and a whopping 13 different betting games. The site now offers traditional games like roulette and jackpot, newer games with names like “scratchy” and “drag race,” and sportsbook-style betting on professional esports matches.

But it’s unclear how the new product complies with either Valve’s C&D or Steam’s terms.

Despite maintaining an email-and-password log-in at its home page doorstep, users are immediately prompted to input their Steam account’s trade URL before proceeding further on the site. Users then utilize their Steam account to deposit skins, which are converted into virtual currency.

Like several other skin sites, its terms of service say that it is governed by the laws of the European Union.

The same terms aren’t specific on age requirements, either, saying that users of the site must be “at least 18/21 (EIGHTEEN/TWENTY-ONE) years of age.”

CSGOPolygon

CSGOPolygon has quietly operated its roulette and coinflip games throughout the summer and into the fall, and has even expanded its Steam-login-reliant product offering in the interim.

The site prompts users to log in through their Steam accounts after they agree to a set of terms and conditions that state they are at least 18 years of age.

The terms also make clear that users “are responsible for compliance with any applicable laws” that may pertain to their use of the site.

On Sept. 21, Polygon launched an esportsbook feature, where bettors could wager skins on the outcome of professional esports matches.

CSGOPot

On Aug. 5, the site said it was temporarily shutting down to comply with Valve’s (and not Steam’s) terms of service.

It has since rebranded as CSGOPot.win, and offers skin gambling via users’ Steam accounts. Similar to CSBetGo, Pot equates one $USD to 100 of its virtual currency, which it also calls “tickets.”

Users can either deposit skins via their Steam accounts into their Pot account and receive tickets, or they can buy tickets outright, ostensibly with real money. PayPal is mentioned as a payment processor the site uses.

But attempts by the author to purchase tickets resulted in a warning that appeared to require proof of ownership of Counter-Strike, the game:

“In a desperate attempt to stop piracy, we require that you own CSGO before being able to buy tickets. Contact us at [email protected] if you feel you are seeing this message in error.”

The site’s terms of service force users to agree that they are over 18 years of age. The site says that if they suspect users are not of age, it will ask for “proof of identity.”

Nothing in the terms mentions players accessing the site from the US, or any other specific country. The ToS say that the site is governed by the laws of the European Union.

Bets.gg

After shutting down over the Summer, Bets.gg relaunched sometime around early September. But similar to CSGOStrong and CSGO500, the site places a third-party layer between itself and direct skins-to-gambling-currency conversion.

Users on Bets.gg are now prompted to sign in not through Steam, but through website Skrilla.io. Users deposit skins on Skrilla, earn coins, then deposit their Skrilla balances on Bets.gg.

Users can cash out their Bets.gg winnings and use the coins to purchase skins on Skrilla, which they then transfer back to their Steam account using, of course, Steam.

The site just added the popular crash game to go along with dice, roulette and coinflip gambling.

Bets.gg has also joined the growing number of sites offering sportsbook-style esports match betting, thus far only on CS:GO matches. It offers this form of betting “tax free“, ostensibly meaning it takes no vig, or fee, on wagers. 

Its terms of service state that users must “acknowledge Virtual currency (‘BETS.gg Coins’ or ‘Coins’) cannot be redeemed for ‘real world’ money or any other item of monetary value.”

That point is debatable. In fact, Bets.gg coins can exclusively be redeemed on Skrilla, which defines itself as a skin exchange, exclusively for skins.

Skins are frequently bought and sold on third-party marketplaces such as OPSkins and Bitskins for $USD, aka, real-world value.

Kickback

Kickback, a website that allows gamers to wager on their own in-game performance as opposed to playing casino gambling games, is currently running as it was before Valve sent its second C&D.

The site matches players up to compete against one another and allows players to win either cash or skins by actually playing Counter-Strike: Global Offensive, either in 1v1 or 5v5 match-ups. 

It boasts of “instant skins-to-cash withdrawals.” It also uses its own virtual currency, Rubies.

According to Kickback’s legal notice, its game is legal in 45 states because that number of states, as well as the US government, “consider video games to be games of skill.”

Valve did not order sites to stop using its API for illegal gambling transactions. It ordered sites to cease and desist using Steam for any commercial purpose. 

The site uses Steam to facilitate the use of skins as an entry fee in a contest. From Kickback’s terms of service:

“In order (sic) use Counter-Strike: Global Offensive (“CS:GO“) in-game items (each, a “Skin“) as Entry Fees, you must link your Steam account and deposit your Skins to Kickback. (A “Skin Contest“) occurs when a user enters Twitch Betting contest.”

Furthermore, the site facilitates the depositing of skins in exchange for virtual currency that can be used to wager. That currency can then be used in the “Ruby store” to redeem skins.

“Global Offensive Skins may be deposited to Kickback in exchange for Rubies (“Skin Deposit“). Depositing Skins on Kickback implies that you fully accept Kickback’s Skin valuation prices, and understand that you will not receive a refund in the case of a Skin price being above or below Steam market value.

You may be required to wager a minimum of 30% of all Rubies credited to your Kickback account as a result of Skin Deposits in Kickback contests to be eligible to withdraw Skins from the Ruby Store.

You can redeem Rubies for Skins in the Ruby Store by creating a trade offer from your Steam account to a Steam account owned by Kickback.”

CSGOMoment

CSGOMoment is still offering its roulette game, and is not even pretending to avoid facilitating betting through Steam. The opening lines of its terms of service announce:

Our CSGO casino is the best online service where you can always win more by depositing your CS items and skins!

1) Sign in on CSGOMOMENT.COM casino CS:GO via your Steam account.

2) Make an item deposit to your account after signing in. (It’s pretty simple, just send steam exchange offer to our trade bot by clicking homepage the “Deposit” button of our CSGO skin casino.

The terms also maintain the site awards 1000 of its virtual coins for every $1 in value of deposited skins. G2A is a site partner.

Other active, named skin wagering sites

SkinArena, CSGOHowl.us, and CSGOFade also appear to be operating normally as well, and utilizing Steam.

Again, dozens of other skin wagering sites are also operating with the use of Steam to facilitate commercial transactions.

Those sites, however, have not knowingly been told by Valve to shut down. Consequently, the scope of skin wagering extends far beyond the 42 sites Valve named.

19 sites formerly using Steam for commercial gambling have shut down

CSGOLotto

CSGOLotto came under fire in July when its owner was found to have broadcast video of himself gambling and winning on his own site without disclosing his ownership position. 

Shortly after, Lotto said it would temporarily stop offering its casino-style skin gambling games. But its wagering features never came back online. As of early August, its url directed visitors to an error message. 

Both the website and the owner, noted player and streamer Trevor ‘TmarTn’ Martin, were named as co-defendants in a class-action suit against Valve.

The suit alleged that the defendants violated RICO statutes, facilitated illegal gambling, and that Martin specifically promoted gambling to minors.

A federal judge granted a motion by Martin and Lotto to dismiss the lawsuit. The plaintiffs’ attorney said the case is not dead, but will simply move to a state court.

For more on the four major skin gambling scandals of the summer of 2016, see page 4 of this new report from ESBR and Narus Advisors.

[geoip2 region=’ROW’][show-table name=betway][/geoip2]

CSGOShuffle

Another site implicated in the four skin gambling scandals of the Summer of 2016, Shuffle shut down on Jul. 29 and hasn’t returned to the market.

The casino-style gambling website was pressured into shutting down after its owner, James ‘PhantomL0rd’ Varga, was found to have gambled on his site without disclosing his ownership position.

Skype logs published by esports journalist Richard Lewis revealed Varga gambled on his own site with unlimited amounts of house money, and often asked his web developer to feed him the “percentages” of the website’s jackpots.

Such information likely increased Varga’s odds of winning dramatically.

CSGOWild

Despite shutting down all gambling features on its site in July, CSGOWild never lost its domain. Its website has promised something is “coming soon” for the past six weeks, but offers no other functionality. 

Little is known about any forthcoming projects from Wild. The site’s Twitter account, however, tweeted out a promotion for a new skin gambling site, CSGONinja, which hosts automated footraces between bot characters who users can bet skins on. It is not clear if Wild and Ninja are related.

Wild shut down in the US twice over a period of two months this past summer.

The process was plagued by scammers posing as site administrators, customers reporting an inability to withdraw skins, and complaints of arbitrarily-raised skin prices on the site’s skin marketplace. 

The site came under fire for allegedly being owned by members of a professional esports organization.

These allegations hastened its second departure from the domestic market. A site admin, ‘Gagey,’ refuted the charges in a statement.   

CSGODiamonds

CSGODiamonds, a player-vs.-house casino-style gambling site that offered betting on the outcome of dice rolls, shut down gambling operations on Jul. 29, the deadline mandated in Valve’s first C&D.

In June, a sponsored player on the site who broadcast his playing to his followers on Twitch admitted that the site’s owners told him the outcomes of “rolls” in advance.

This dramatically increased his odds of winning on the site, which in turn, made the promotional broadcasts of his playing that much more exciting (and deceptive). 

CSGOCosmos

As of mid-August, CSGOCosmos was operating almost identically to, and possibly in connection with, CSGOStrong.

It bypassed directly processing skin deposits by forcing users to deposit skins on Skntrades, receive Skntrades’ virtual currency, and then deposit that virtual currency back on Cosmos to gamble with.

At some point in either late August or early September, though, the site went offline.

Attempts to visit its website from both inside and outside the US elicit an error message.

With the fortunes of Strong, Skntrades and Cosmos thought to be linked, it’s unclear why the latter site is down while the former two continue to operate unfettered.

CSGOBestPot

CSGOBestPot was one of the 10 initial non-compliant holdouts from the second C&D letter that operated well into the month of August.

At some point since then, however, the site has stopped offering gambling. 

The website remains up, but all games are static and none of the site’s features are accessible. 

The site has not tweeted since January, and it’s unclear if the shutdown is temporary or permanent.

CSGOHouse

CSGOHouse shut down shortly after the first C&D was sent. It is one of the few skin gambling websites to acknowledge what appears to be a simple, powerful truth.

“We have been forced to close, because we have created trade bots and are using valves (sic) API for gambling,” a note on its website and Facebook page reads.

“Thank you for all your support, you are truly awesome! Stay tuned for future updates.”

The website has not hinted at any future updates or product re-launches since the announcement, which came on Jul. 26.

CSGOPoor

It’s unclear to what extent CSGOPoor is operative. Users are prompted to log in to Steam once they reach the site, but trades were blocked as of Tuesday, and a site counter said that zero users were online.

No games were visible from the home page. 

The site’s Twitter account is active, and the site appears to be in the middle of various skin giveaways. The site’s chat feature, also, was quite active.

CSGOBetBig

This site might be functioning, but it’s unclear to what extent Steam or skins are involved.

On one hand, users are prompted to log in to their Steam accounts to play on CSGOBetBig.

But in the site’s “about” section, it instructs users to deposit and win Bitcoin. Then, when users follow that link, they’re prompted to sign into their Steam accounts and input their Steam trade URL, as opposed to their Bitcoin URL.

The site appears to have a low current user base and does not have an active Twitter account.

It says it published its updated terms of service on June 28, which would have been one month before Valve sent it a C&D notice It last updated the terms, it says, on Sept. 20.

Other named skin wagering sites that have shut down

CSGOJackpot, Csg0.com, CSGODouble, CSGOatse, CSGOBattle, CSGOSweep and Skins2, also appear to have shut down.

CSGODices, CSGO.One and CSGOMassive still have functioning URLs and appear to be actively offering games. But repeated log-in attempts from multiple countries to Dices and One timed out, while Massive no longer offers any type of deposits and only allows users to bet with existing balances.

Two sites offer esports betting that doesn’t involve skins or Steam

CSGOLounge

After a chaotic summer of refusing to abide by Valve’s terms, followed by a half-hearted shut down, followed by a complete skin betting shutdown, CSGOLounge is back to offering betting—just not with skins. 

The world’s largest skin betting sportsbook, which took in the USD equivalent of $1 billion in handle in the first seven months of 2016 alone, is now a coin betting sportsbook.

Users can still utilize Lounge’s popular skin trading platform. But all bets on the outcome of professional CS:GO matches are now facilitated via Lounge’s own digital currency.

As of mid-October, these coins hold no value. It is unclear how users who win coins betting on matches will be able to cash them out, if at all.

Users who sign up for free with an email-and-password account receive 100 coins automatically with which to wager. Users cannot wager Steam items on matches, and cannot currently convert Steam items to coins.

The new format involves players making a series of bets on pro CS:GO matches with coins over time, and a rankings system to show who has made the most successful bets and who has the highest balance of coins.

For more on Lounge’s tumultuous closure and reopening, see page 5 of this new report from ESBR and Narus Advisors.

Fanobet

The former skin betting sportsbook converted to a real-money sportsbook after Valve purportedly disrupted its trade bots in early August.

Originally, Fanobet said it was converting its skin betting platform to a Bitcoin platform. While it appears to have done this, and while Bitcoin is the site’s most prominently preferred payment option, it also says it accepts Visa and MasterCard as payment options.

A spokesperson for the site confirmed on Reddit that the site also accepts G2A Pay, Skrill and Neteller.

Recent attempts to log in to the site via Steam were blocked. A message reads that the site is no longer accepting Steam log-ins from new users as of Sept. 15. It’s unclear if users prior to that date can log in via Steam or not.

But now, users must log in via a traditional email-and-password format.

The site recently became the official sponsor of professional esports organization mousesports. Since Fanobet offers sportsbook-style betting on esports events that mousesports participates in, it’s unclear if Fanobet prohibits betting on matches involving the team it sponsors.

Unlike other websites, Fanobet also offers betting on NBA, Major League Baseball and NFL games.

But since it no longer accepts skin deposits from new users, and takes action on traditional sports in addition to esports, it appears to simply function as an unregulated, real-money sports betting site.

The site has a responsible gaming section where it warns users of the dangers of problem gambling.

Much like CSGOLounge did before it shut down in mid-August, it has implemented a self-exclusion policy for gamers who want Fanobet to shut down their account. It even provides an email address for concerned parents to contact Fanobet.

The site is licensed in Curacao, and continues to block customers from the US.

Only the beginning for Valve, regulators

There is a key challenge standing between not only Valve, but also regulators, lawmakers and the courts, and the enforcement of illegal gambling laws: Defining the size, structure and scope of the skin gambling industry it’s trying to regulate in the first place.

Valve only chose to name (as far as we know) 42 of the existing skin wagering sites in its C&D notices.

But there are likely more than 100 skin gambling sites operating at any given time (See: CSGONinja, CSGORage, CSGORoll, CSGOHunt, CSGOTrinity, CSGOCoinFlip, CSGOBlackJack, CSGOWorld, SkinRaffle, etc.).

Understanding the size and scope of the market becomes even more challenging when one considers the relative transiency of these sites.

Many, including several named in the C&Ds, can go away for a short while and then pop up again under another domain, or with amended products, or appear to users in some countries as if they’re shut down while operating in others.

Because it is the creator, moderator and final gatekeeper of Steam, only Valve can observe and quantify to the fullest extent the amount of wagering-related activity being conducted via the integration of its API.

This could point to one eventual, involuntary outcome the game maker could be forced to comply with: Devoting significant time and resources to policing Steam and blocking the trade bots that are akin to the oxygen coursing through the body of the skin wagering ecosystem.