A Year After Valve’s Cease And Desist Letter, Inside The End Of One Skin Betting Site

Written By Matthew Lui on July 20, 2017 - Last Updated on January 22, 2018

[toc]Valve sent out a cease and desist letter to a list of 23 skin gambling sites in the middle of July 2016, ordering them to halt their use of the Steam accounts for gambling within 10 days.

Although I missed it the first time I read the letter, the site that I worked for and moderated, CSGOBattle.com, was named. The sites was essentially given ten days to shut down or disassociate itself from Steam’s network.

I jumped on the computer and opened up the site to see the chatroom busier than ever. Everyone had the same question for me: What was going to happen?

The backstory on skin gambling

Let’s wind back a little. CSGOBattle was a newcomer in a growing trend of skin betting. Users traded in their skins for virtual ‘coins’ which could then be gambled on the site and then withdrawn back into CS:GO skins.

It had been operating for a few months, but had only left its beta stage a few weeks prior and the site was plagued with bugs that were slowly being addressed. Additionally, players who held a balance in the beta were sitting on a waiting list to be refunded on the new site.

The site had just picked up a deal with a popular streamer and CS:GO merchandise company for the launch, so the management seemed much more interested in the endless waves of bets flowing in rather than addressing the issues. The attention was warranted; the site had been nearly completely reworked and it finally seemed as though the site was ready to compete with the biggest sites.

Despite knowing this, I never would have thought that the site, and for the most part the entire skin gambling scene, would be left in such a position of confusion and uncertainty.

The chain reaction for skin betting operators

The day after Valve verified it sent the letter, both the sites and their users began to consider what it could mean for everyone. The first word form CSGOBattle was that we’d “work something out.” Many of the other sites did the same and avoided making any kind of proper statement in the first few days.

But the lack of responses in the early stages didn’t stop users from taking the opportunity to withdraw everything they could from the sites. The stock of skins available for withdrawal began to run dry everywhere, and as the days progressed some of the sites began to officially begin encouraging user withdrawals.

What happened at CSGOBattle

At CSGOBattle, for better or worse, this wasn’t the case.

As luck would have it, the majority of the items in the withdrawal system had already been stuck for days because of a glitch in connecting to the trading bots. This left the account balances of everyone on the site currently worthless and in limbo. The users were understandably unhappy. However, this at least gave the owners some time to make a decision about what to do next.

The slight sense of optimism was continued roughly 48 hours after the letter. Then management finally made an informal announcement to the staff that they had been talking with CSGOWild and were working towards a way to continue the site. The moderators passed this down to the users and there seemed to be some calm.

But as the days progressed and the ten-day deadline loomed, some of the other sites began to indicate their closure and management fell completely silent.

In the final few days, the moderators began to independently accept that there wasn’t going to be a future for the site. Unlike some of the others, CSGOBattle had just used up all of its resources for its official release.

It became apparent, with some thought and discussion between us, that there was no way of continuing without yet another costly major rework. Furthermore, it didn’t seem as though we would have enough to mount any kind of legal defense if it came to it.

Given our size, it was likely not an option for the owners to ignore the US market entirely. I believe that it contributed for at least half of our bets, as we only had an English version of the site.

The end of skin betting as we knew it

This ultimately led to a dramatic shift in power towards the big players in the gambling scene. Larger sites were able to change their system, whilst forcing smaller ones out of the market completely because of their inability to pivot.

We began to tell users, against the request of the owners, that it was probably the end. The moderators each wrote a short explanation of the situation that asked the users to withdraw whatever they could, as some of the cheaper items in the market seemed to have become available again. We then repeated that message as much as we could to spread the word, but that came with the cost of dealing with the fury of the members as they heard the news.

As this was unofficial, we couldn’t do anything for the hundreds of people who couldn’t withdraw because of the errors. Nor could we help those still owed from the beta, which in one case was up to a thousand dollars. Some accepted the fact and moved on, but there was a sadness in seeing some of the users log on every hour and ask us if there was any news or anything we could do.

There never was.

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

The doors close

It neared the end of the week and I awoke one morning to see CSGOBattle with our maintenance error message:

“Something broke, so we’re fixing it… we’ll be right back.”

But below it the owner had left a farewell and it was clear that we would be one of the first to close its doors.

The Skype group we used for communication ended with a string of goodbyes from each moderator to the friends we’d made and then the notification that they had left the chat. I stayed until the end of the ten-day period but the owners never said a word to us after the closure, so I eventually left the group in good faith.

In retrospect, and in talking to some of the moderators, all seemed to be disappointed in how it ended. Even if the owners had wanted to let users withdraw, the nature of the letter presumably meant there was no flexibility in fixing the withdrawal issue so we could attempt a proper closure.

In the end it was seven days of confusion and frustration from members before we shut down, a trend that was reflected in many of the other sites as they followed suit.

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