In video games, skin gambling is the use of virtual goods, which are most commonly cosmetic elements such as "skins" which have no direct influence on gameplay, as virtual currency to bet on the outcome of professional matches or on other games of chance. It primarily has occurred within the player community for the game Counter-Strike: Global Offensive by Valve Corporation, but practice of it exists in other game communities. Valve also runs the Steam marketplace which can be interfaced by third-parties to enable trading, buying, and selling of skins from players' Steam inventories for real-world or digital currency, though Valve itself condemns the gambling practices and such activity violates Steam's Terms of Service.
Valve added random skin rewards as part of an update to Counter-Strike: Global Offensive in 2013, believing that players would use these to trade with other players and bolster both the player community and its Steam marketplace. A number of websites were created to bypass monetary restrictions Valve set on the Steam marketplace to aid in high-value trading and allowing users to receive cash value for skins. Some of these sites subsequently added the ability to gamble on the results of professional matches or in games of chance with these skins, which in 2016 was estimated to handle around $5 billion of the virtual goods. These sites, along with Valve and various video game streamers, have come under scrutiny due to ethical and legal questions relating to gambling on sporting matches, underage gambling, undisclosed promotion, and outcome rigging. Evidence of such unethical practices was discovered in June 2016, and led to two formal lawsuits filed against these sites and Valve in the following month. Valve subsequently has taken steps to stop such sites from using Steam's interface for enabling gambling, leading to about half of these sites closing down, while driving more of the skin gambling into an underground economy.
Counter-Strike: Global Offensive
Counter-Strike: Global Offensive (Global Offensive) is a team-based first-person shooter developed by Valve Corporation and Hidden Path Entertainment, released in 2012. The title itself was a stand-alone game built atop the Counter-Strike mod developed in 1999, and subsequently built out into a game series by Valve. Players in the game take the role of a terrorist or a counter-terrorist, with each team having a unique goal to complete before they are eliminated by the opposing team or before the timed round is completed; for example, the terrorist team may be required to plant and defend a bomb at a specific site, while the counter-terrorists must eliminate the terrorists before it can be planted, or disarm the bomb once it has been activated.
Skins as a virtual currency
The introduction of the Arms Deal update to Global Offensive in August 2013 added cosmetic items termed "skins" into the personal computer versions of the game. The developers had considered other types of customization drops for the game before coming to weapon skins; they had ruled out on player skins, since Global Offensive is a first-person shooter and the player would not see their customization, as well as new weapons, fearing this would imbalance the game. Following the model they used for Team Fortress 2, Valve enabled players to be rewarded with random skin drops as they played matches which would be stored in their user inventory within Steam, Valve's software delivery and storefront client. Limited-time "souvenir" skins could also be earned by watching competitive Global Offensive matches within the game or through a Twitch.tv account linked to a Steam account. Unlike Team Fortress 2, the Global Offensive skins do not have any direct impact on gameplay, only influencing the look of a player's weapon. Skins, unique to specific in-game weapons, are given several qualities, including a rarity that determines how often a player might acquire one by a random in-game drop just by playing the game or as in-game rewards, and an appearance quality related to how worn the gun appeared.
These skins were added to try to unify and increase the player size of the community, who were split between Global Offensive, Counter-Strike v1.6, and Counter-Strike: Source. According to Valve's Kyle Davis, the introduction of skins to Global Offensive was to encourage more players for the game by providing them free virtual items simply by playing the game which they could then use as part of the Steam Marketplace to trade with others, boosting the Marketplace's own economy. The Arms Deal update drew an audience back to the game, with a six-fold increase in the average number of players from the previous year about seven months after its release.
Initially, Valve had considered skins that appeared as camouflage would be more desirable to help hide on some maps, but found there was more community interest in bright, colorful skins that made their weapons appear like paintball guns. The addition of skins made the game attractive to expert players, as the skins could be taken as a kind of trophy, showing off to other players how serious of a player they were. Valve's CEO Gabe Newell described the offering of skins as an "investment" that would retain some nominal value well after the player stopped playing the game, though did state that they had concerns about factors that might fall out of their control with this feature.
Because of the rarity and other qualities, certain skins became highly sought-after by players. Skins became a form of virtual currency, with some items like special cosmetic knives worth thousands of United States dollars. This virtual currency was further impacted by the game giving out "weapon cases" that would contain an unknown skin. A case, and discovery of that skin, could only be opened by purchasing a key in the in-game store for $2.49. At the same time, the most common skins that could be earned had a value far less than the cost of the key, so the player would effectively lose money if they bought a key and found a common skin. Because of this, cases also became part of the virtual currency within Global Offensive.
Global Offensive is not the first video game where players have traded, sold, or bought virtual in-game items, but the ease of accessing and transferring through the Steam Marketplace made it a successful virtual economy. However, with increased monetary values placed on some skins, the Steam Marketplace became infeasible. The Steam Marketplace only allows sales up to $400, with all transactions subject to a 15% fee collected by Valve. Trades and purchases via the Steam Marketplace required players to add funds to their Steam Wallets to purchase skins from others, with those funds being placed in the Wallet of the seller; such funds could not be taken out as real-world money, as otherwise Valve would be regulated as a bank. As the value of skins grew beyond these limits, new websites opened up that used the Steamworks application programming interface (API) to link players' inventory to these sites as to manage the trading of Global Offensive skins while enabling these users to spend more and receive money through other online banking/payment sites like PayPal or using digital currency like Bitcoin, and bypassing Valve's transaction fee.
The player community for Global Offensive grew quickly following the addition of skins, further enabled by the growth of streaming services like Twitch.tv. Valve promoted features into Global Offensive that made it favorable for professional play (eSports), including sponsoring its own tournament. Several teams arose from high-ranking players, creating viewing opportunities during tournaments; this was further enhanced by the ability for viewers to earn "spectator" skins simply by watching these matches. Compared to League of Legends, one of the most-watched eSports in 2013, Global Offensive is considered an easier game for spectators to understand and follow, making it more attractive for viewing audiences. Within a year of the Arms Deal update, Global Offensive has seen a significant turnaround in player counts, and is poised to be a major eSport. More than eight million players played Global Offensive by September 2015, and as of April 2016[update], Global Offensive was one of the top five games watched on Twitch, peaking at more than 525,000 concurrent viewers during a championship round. At the start of 2016, Global Offensive was poised to be the largest growing eSport that year.
As Global Offensive's popularity as an eSport grew with increased viewership, there also came a desire for players to bet and gamble on matches. Outside of the United States, several sites arose to allow users to bet with direct cash funds on the result of matches from games like Global Offensive. Cash gambling on sports, including eSports, had been banned in some European countries, and, up through May 2018, in all but four states within the United States under Professional and Amateur Sports Protection Act of 1992 (PASPA). With the decision in the Supreme Court case Murphy v. National Collegiate Athletic Association that ruled PASPA unconstitutional, states are now free to enable sports gambling including for eSports. American case law has also determined that use of virtual goods for betting on the outcome of matches is legal and not covered under gambling laws. Companies like Blizzard Entertainment and Riot Games have made strong delineations between virtual currencies and real-money to stay within these prior rulings while offering betting on matches within their games using strictly-virtual funds.
Some of the websites created to help with trading of Global Offensive skins started offering mechanisms for gambling with skins, appearing to avoid the conflation with real-world currency. These originated as sites that allowed players to use skins to bet on eSport matches; Players would bet one or more skins from their Steam inventory, which are then moved to an account managed by the gambling site. Upon winning, the player would be given back their skins and a distribution of the skins that the losing players had offered.
Over time, other sites started to expand beyond eSports betting and instead offered betting on games of chance. Jackpot-like sites were introduced, where users can put their skins into the pot, which will end in one person winning. The higher total value, the more chance the user would have to win. A few sites reduced the gambling to betting on the result of a single coin flip. Some sites also offered unopened weapon crates for purchase with skins. In combination with the gambling features, players could then trade skins they won for their cash value through these sites, or purchase skins with currency to gamble further. The exact timing for the growth of these gambling sites is unclear, but Chris Grove, an analyst for Eilers & Krejcik Gaming and Narus Advisors, observed as early as August 2015 that skins were being used for betting on eSports. At that time, the use of skins for gambling on more traditional games-of-chance was not readily apparent.
These sites have created a type of black market around Global Offensive skins, generally unregulated by Valve. The exact monetary values processed by these skin gambling sites are difficult to measure due to the opaqueness of the ownership. Eilers and Narus estimated that $2.3 billion in skins were used to bet on eSports in 2015, $5 billion in 2016, and projected that over $20 billion in skins would be gambled by 2020 if the market was left unchecked. Of the $5 billion in skins during 2016, Eilers and Narus estimated that only $2 billion were used for eSports betting, while the rest was used on traditional games-of-chance. Some individuals are estimated to have a cumulative worth of tens of millions of dollars of skins in their inventories. The effect of Global Offensive gambling is estimated by the Esports Betting Report as an "eight figure" number that feeds the overall area of professional eSports due to viewership and promotions related to the skin gambling.
Several factors led to concerns about the Global Offensive skins market and gambling. The skin gambling mechanisms work towards those predisposed to gambling because of the ready-availability and acquirability of skins within the game, and can earn great rewards, according to UCLA's co-director of gambling studies Timothy Wayne Fong This is particularly true for younger players, which make up a substantial portion of the Global Offensive player base, who also may be encouraged through peer pressure to obtain unique skins to show off to their friends.
With the pressure applied to skin gambling websites in 2016, some have moved to use skins as part of a cryptocurrency called "Skincoin", which was launched in June 2017. Skincoin, backed by Ethereum, allows users on the gambling websites to trade skins for Skincoin which then can be used for gambling or purchasing skins. Other sites arose in 2017 that would allow users to obtain skins for doing "free" tasks, such as watching ads or advertising these sites through other games. These free skin sites do not have gambling aspects as a means to appear to be legal, but users can subsequently take these skins into other gambling sites.
While skin gambling and the issues relating to it has been limited mostly to Global Offensive, other games have also seen similar gambling using virtual goods. Valve's multiplayer online battle arena game Dota 2 uses cosmetic clothing and weapon replacements for the playable characters as virtual currency, which have been both traded and used for eSports betting on similar or the same sites as for Global Offensive. As drops of these costume elements are far more rare than in Global Offensive, the gambling situation around them was not seen as egregious as Global Offensive skin gambling, though does suffer from the same ethical and legal issues. Team Fortress 2's virtual goods are also used on various gambling sites, to a lesser extent.
Similar black markets and gambling sites exist for games in the FIFA series by Electronic Arts, starting with the FIFA Ultimate Team feature in FIFA 2013, where players would use virtual coins, purchased with real-world funds, to create a team based on real-world FIFA players. Though players are able to trade virtual athletes with another, the mechanisms of behind the coins and players has led to third-party gambling sites that operate on the same principle as Global Offensive skin gambling. At least one such case against the sites that offer this type of gambling has prosecuted.
Eve Online, a persistent massively-multiplayer game which includes an in-game economy that is driven by players rather than its developers CCP Games, has had issues with virtual item gambling which imbalanced the player-driver economy. Notably, in an event called "World War Bee" in 2016, numerous players worked with a player-bankrolled casino as to acquire enough in-game wealth and assets as to strip control from the reigning player faction in the game. Following the conflict, players from the affected faction noted potential legal issues with this in-game casino that would run afoul of European gambling laws if minors were involved, as well as how they affected the game's balance beyond what CCP had envisioned. CCP discovered that alongside these casino, there was also virtual item gambling that involved real-world finances, practices that were against the game's terms of service. In October 2016, in anticipation of making Eve free-to-play, CCP altered their end-user license agreement terms to disallow any type of gambling using in-game assets, and later banned the accounts of those involved in the gambling scheme, effectively seizing in-game currency estimated to be worth $620,000 in real monetary value.
Issues and criticism
Skin gambling contributed greatly to the success of Global Offensive as an eSport, but some argued that it needed to be regulated to avoid legal and ethical issues. Most of the discussion and action on skin gambling resulted from a video posted by YouTube user "HonorTheCall" in late June 2016. HonorTheCall had observed some allegations of questionable Global Offensive promotion through his Call of Duty videos, and in searching in publicly-available information, discovered evidence of unethical practice by one gambling site, which he documented in this video; subsequently, several media outlets took the initial evidence and reported more in-depth on the matter.
Skin gambling sites have attracted a number of malicious users. When roulette-like websites were created, browser extensions claiming to automatically bet for the user were actually malware designed to steal skins and coins.
While gambling using virtual items falls within acceptable practice in US case law, the fluidity between virtual goods and currency, enabled by the Steam Marketplace, makes it unclear if skin gambling is legal under US law and if Valve would be liable. As of 2016, United States gambling laws, which include the Illegal Gambling Business Act (a component of the Organized Crime Control Act), the Unlawful Internet Gambling Enforcement Act of 2006, the Federal Wire Act, and the Professional and Amateur Sports Protection Act of 1992, do not explicitly cover the gambling of virtual goods in eSports, though argued could be easily modified to include virtual goods.
Further, the ease of accessibility of skin gambling websites has enabled underage gambling. Justin Carlson, the creator of a skin selling online marketplace website called SkinXchange, said underage gambling is a huge issue, and there were "countless times" where he's had to call parents to tell them their child had used their credit card to buy items. Carlson cites cases where underage users have bet hundreds or thousands of dollars, just to end up losing them on a betting or jackpot site.
Many skin gambling sites do not explicitly declare who owns them and may be operated by offshore agencies, leading to issues involving transparency and promotion. Some of these sites are located in offshore countries which do not have restrictions on gambling, putting them outside of law enforcement in some countries. In early July 2016, the video posted by "HonorTheCall" led to the discovery that one gambling website, CSGO Lotto, was owned by two YouTube users, Trevor "TmarTn" Martin and Tom "Syndicate" Cassell and supported in equity by Josh "JoshOG" Beaver, none of whom disclosed this relationship on their videos while promoting this website to their subscribers, with some of this promotion paid for in the way of Global Offensive skins. This practice was identified as conflicting with the Federal Trade Commission (FTC) on promotional videos, though the owners have claimed they are operating within the law. Valve subsequently blocked CSGO Lotto from the Steam services, but a few days later overturned that ban. In September 2017, in what the FTC called its first settlement with "social media influencers", the FTC arranged an agreement with Martin and Cassell, requiring them to disclose any business ties with their videos in the future or face more drastic action; this agreement was finalized in December 2017. The FTC also updated its guidelines in how product endorsement relates to social media in light of this situation. The lawyer representing Martin and Cassell said that CSGO Lotto should not be classified as a gambling site, as through its fine print, allows users to participate without having skins by simply requesting entry tickets for its events, similar to how McDonald's Monopoly promotions are run.
A similar situation was discovered for YouTube user PsiSyndicate, whom promoted the site SteamLoto without disclosure, while being paid for the promotion in rare skins. One site, CSGO Wild, in announcing their closure in response to Valve's cease and desist letters, revealed they had promoted members of FaZe Clan who had previously neglected to reveal this promotion on their videos. At least one member of FaZe Clan has since updated their video archives to include a message regarding their CSGO Wild promotion following this announcement.
A further problem with these gambling sites were claims of rigging between some skin gambling sites and players. One site CS:GO Diamonds has admitted to providing at least one player with inside information to help make the resulting matches more exciting to draw viewers to the site. In January 2015, Valve banned seven professional Global Offensive players from the same team after finding evidence that they were match fixing in association with skin gambling site CS:GO Lounge during a major competition. Further, Valve warned that professional Global Offensive players and event organizers "should under no circumstances gamble on Global Offensive matches, associate with high volume Global Offensive gamblers, or deliver information to others that might influence their Global Offensive bets", threatening to exclude players that may even be suspected of such interactions. Despite this discovery, CS:GO Lounge continued to remain active, and later that year announced its sponsorship of a professional Global Offensive team, raising questions of its legitimacy.
On October 5, 2016, the Washington State Gambling Commission (where Valve is headquartered) ordered the company to "immediately stop allowing the transfer" of skins for "gambling activities through the company’s Steam Platform", giving the company until October 14 to submit notice of compliance or otherwise face legal repercussions which may include criminal charges. The commission had previously contacted Valve in February over issues with the practice, specifically focused on issues relating to the use of the Steam API that enabled the third-party websites. Valve's reply re-asserted it was not involved with these gambling sites and did nothing wrong under state law, further asserting that most of the Steam service features used by the gambling sites are primarily designed to be used to facilitate legal and acceptable practices for other users, and thus cannot directly shut down these services without impacting the bulk of other Steam accounts using the services legally. Valve continued that they have and will continue, in an offer of cooperation with the State, to identify those Steam accounts being used for gambling sites and shut them down due to violation of their end-user license agreement terms. The Federal Trade Commission is evaluating whether some of the Global Offensive players that have promoted these gambling sites have violated appropriate disclosure rules, however, the Commission has not issued a formal statement of their investigation yet.
In 2016, Australian senator Nick Xenophon planned to introduce legislation that would classify games like Global Offensive, Dota 2, and other games with virtual economies with the option to use real currency to buy items with random or different value (as in the Global Offensive weapon cases) as games of chance. Under this proposed law, such games would be regulated under gambling laws, requiring them to carry clear warning labels and may be required to enforce age requirements to play. Xenophon stated that he believed these games "purport to be one thing" but are "morphing into full-on gambling and that itself is incredibly misleading and deceptive". Norway's Gambling Authority, which oversees all gambling operations within the country, deemed skin gambling of any form to be illegal in March 2017, and will take action again operators of skin gambling websites within the country.
The government of the Isle of Man enacted licensing conditions in February 2017 allowing online gambling operators to allow players to deposit, gamble with and withdraw virtual items such as skins. This is performed under strict regulation ensuring all gambling is done using certified random number generators (RNGs) and that no minors participate. This was seen as potentially restoring the skin gambling market after the 2016 discovers. In August 2017, the United Kingdom's Gambling Commission opened an investigation into skin gambling. The Commission has previously carried out the successful prosecution of two owners of a UK website which promoted virtual goods gambling around the FIFA games, on charges of advertising unlawful gambling and encouraging underage gambling. The Commission published their report in December 2017, finding that 11% of 11- to 16-year-old children in the country had participated in skin gambling, in part due to lack of safeguards against underaged used on those sites that allowed for skin gambling. The Commission said they are prepared to take criminal action but need assistant of parents and game companies alike to enforce underage gambling rules.
As per 6. February 2018 the Government of Denmark blocked access to 6 large skin gambling sites accessible via the Danish version of Steam. The blockage followed a court case between the Danish Gambling Authority and two Danish telecommunication companies. The court ruled that since the named skin betting sites were promoted at a site in Danish, they were required to have permission from the Danish Gambling Authority. The Danish telecommunications had initially refused to comply with the demand by the Danish gambling authority to block access to the sites on principal grounds, which was why the case was decided in court. The same court case also outlawed 18 other gambling sites not involved with skin gambling.
With the concerns over loot boxes in late 2017, the Dutch Gaming Authority reviewed several games with loot boxes, found them to violate the Netherlands' gambling laws, and issued letters to publishers of several unnamed games in April 2018, giving them eight weeks to correct the loot box or start facing fines or criminal charges. On June 20, 2018, the deadline given, Valve disabled Global Offensive and Dota 2 item trading for users within the Netherlands as to comply with the Gaming Authority's order.
At the Gambling Regulators European Forum conference in September 2018, members from fifteen European nations, as well as the American state of Washington, announced a collaborative effort to address the "risks created by the blurring of lines between gaming and gambling", with their primary focus to be on third-party websites that offer skin gambling features.
In June 2016, Valve was sued in the American state of Connecticut by resident Michael John McLeod. The lawsuit cites "illegal gambling" issues "knowingly" created by Valve and three of the trading sites, CSGO Diamonds, CSGO Lounge and OPSkins, including potentially gambling by minors, stating that Valve not only provides the currency in the form of skins for gambling, but also profits from the resulting trades when such skins are won. McLeod's lawyers are seeking to treat this as a class-action lawsuit once proceedings begin.
A second lawsuit, also filed as a class-action, was initiated against Valve, Martin, Cassel, and CSGO Lotto by a Florida mother in July 2016 shortly after the CSGO Lotto discovery. This suit states that Valve enables gambling by minors and users such as Martin and Cassel promote this, all considered illegal activities under federal racketeering laws and Florida consumer protection laws. ESPN outlined the story of Elijah Ballard, one of the 44 plaintiffs in the case, who had become addicted to skins gambling when he was twelve years old, using his parents' credit cards and bank accounts to purchase skins.
Jasper Ward, a lead counsel in both cases, undertook the lawsuits due to his current involvement in the legal investigation into gambling issues with DraftKings and FanDuel, sites that allowed players to bet on fantasy teams. Ward stated that Valve "created and is profiting from an online gambling ecosystem that, because it is illegal and unregulated, harms consumers, many of whom are teenagers". Ward noted that, as of a July 6, 2016 interview, Valve had not issued a response to either case, and believed that the company's "public silence [...] is unconscionable", particularly in light of them unbanning CSGO Lotto.
Part of both suits asserted there were Racketeer Influenced and Corrupt Organizations Act (RICO) violations at play, requiring part of the suit to be heard at the Federal Circuit Court. The presiding judge in the first case ruled in favor of the defendants' motion to vacate this aspect of the case in October 2016, stating that "gambling losses are not sufficient injury to business or property for RICO standing". Valve successfully lobbied to transfer the case to a federal court in Seattle in August 2016, and subsequently had the case dismissed on juridical grounds in November. The plaintiffs attempted to refile in King County Superior Court in Seattle, but Valve also lobbied this to federal court and similarly received juridical dismissal. The plaintiffs were joined by additional plaintiffs in Washington and Illinois and filed in federal court in Seattle; the new filing includes the actions of the Washington State Gambling Commission as part of its assertions. Similarly, the second case against CSGO Lotto was kicked out of federal courts on the same RICO arguments, and was refiled in Florida state courts where CSGO Lotto was incorporated. Ward noted that Martin had moved out of the United States to the United Kingdom around the time the lawsuits had been filed, making it difficult to see any legal action towards him.
Reactions by Valve and others
Shortly after the second lawsuit above, Valve's Erik Johnson stated in a July 13, 2016, letter to Gamasutra that they will demand the third-party sites that use Steam functionality to aid in gambling to cease their use of Steam in that manner, as their methods of connectivity and use go against Steam's acceptable use policy. Johnson also stated that Valve has no business relationships with these sites, and will pursue legal action if they continue to violate their service terms. On July 20, 2016, Valve followed by issuing several cease and desist letters to 23 sites they believed involved in skin gambling that were inappropriately using their services, giving them ten days to discontinue use of the Steamworks API. Another 20 sites were issued similar cease and desist notices by Valve a week later.
The same month, Twitch.tv warned its users that streams depicting or promoting Global Offensive gambling sites were in violation of its terms of service, which forbids streams that depict content which violates the terms of service of third-parties. As a result, Twitch banned James Varga, also known as "PhantomL0rd", the highest-viewed Global Offensive player on Twitch with over 1.4 million followers at the time, asserting the ban was for violating their terms of service, though did not clarify further for the specific reasons. This ban had followed a few days after yet-proven allegations regarding Varga's connections to a skin gambling site were made public. Shortly after, Varga announced that he had obtained legal counsel to fight his Twitch ban, and filing a formal lawsuit against Twitch for it in February 2018, seeking monetary damages due to having his streaming career impacted by the ban. Twitch filed a countersuit in May 2018, arguing that Varga violated terms and conditions of using the site, and seeks compensatory damages for harm that Varga had created for Twitch and its users.
In the wake of Valve's statement, several of the gambling sites either went dark, closed off the use of the site by United States residents, or formally announced their closure, such as CSGODouble. Valve warned users that they should move any skins they have transferred to such sites back to their Steam inventory, while several affected sites have promised users they will automatically return skins in the near future. One site, OPSkins, remained active, saying in a statement that they were not a gambling site and do not anticipate Valve would take action against them as a result. CSGO Lounge had announced plans to obtain legal gambling licenses in the countries it plans to operate within, and restricting access to users from countries with these licenses. However, the site announced the following month that they were shutting down all virtual item gambling, offering users an opportunity to recover their virtual items, while shifting to a general eSports entertainment website. By January 2017, only about half of these sites contacted by Valve had been shut down, with more off-shore sites being set up around the time. Further, the newer skin gambling sites have kept low profiles, making skin gambling more of an underground economy that is more difficult to track. Around the same time, Valve announced that they were going to take similar action to block sites and accounts that engaged in gambling using Team Fortress 2 items.
In March 2018, Valve extended its Steam storefront policy of a seven-day cooling off period on newly acquired items from trades to apply to Global Offensive skins; this was done purposely to target skin gambling and trading sites which depend on the immediacy of being able to trade items, without disrupting fair trades between players. This was met with criticism from players, particularly those that have run legitimate community trading sites and streamers that offer skins for viewers, and a petition with over 100,000 signatures had been started to have Valve review this decision. Shortly afterwards, OPSkins had launched ExpressTrade, a site that used bots to automate some of the trading functions as to effectively bypass the seven-day period. Valve sent a cease & desist letter to OPSkins demanding they shut down ExpressTrade for violating Steam's Terms of Service, and subsequently, when OPSkins failed to act, deactivated the accounts of the bots used by ExpressTrade. Users from Reddit estimated that over US$2 million-worth of skins were lost from this shutdown, which included about US$1 million in PlayerUnknown's Battlegrounds skins that had been locked in the system when the PUBG Corp, which publishes the game, opted to lock skin trading when they saw their skins being used in skin gambling.
The revelations of several problems with skin gambling during June and July 2016 highlighted the nature of gambling as a significant problem for eSports. Todd Harris of Hi-Rez Studios, a developer of several eSports games, believed that these events signaled the end of an era where eSports went mostly unregulated, requiring publishers and tournament operators to exert tighter control on their games to reduce gambling problems. Psyonix, the developers of Rocket League, announced plans to bring a similar loot-drop and trading system to their game as with Global Offensive, but purposely opted not to use the Steamworks API to manage player inventory, seeking to avoid a similar situation with gambling that happened with Global Offensive. Brendan Greene, lead designer for PlayerUnknown's Battlegrounds, believed that by mid-2017, Valve had put enough safeguards in place to use the Steam marketplace to manage the trading and selling of cosmetic items for Battlegrounds without worrying about skin gambling. However, by November 2017, several Battlegrounds skin gambling sites of questionable legality began to appear. PUBG Corp, the developers behind Battlegrounds, disabled Steam trading in May 2018 as they found players were still abusing the system.
As there is still a desire to gamble on eSports, programs are being developed to use completely virtual currencies that have no monetary value to avoid the skin gambling issues. For example, in September 2016, Twitch announced plans to offer a virtual currency, known as "Stream+", to users of their platform which would as act as points within a loyalty program. The points can be earned by watching streams, and a user would be able to bet on eSport matches with them.
When the existence of the skin gambling situation was discovered in mid-2016, estimates for the economics of skin gambling market had dropped, but by early 2017, these analysts found the market did not drop as much as they expected, and with gambling sites still open and growing, they do not expect to see this diminish in the near future unless the legal matters are resolved. Analysis firm Naruscope estimated in early 2017 that even with increased awareness of the legal ramifications of skin gambling, there could be as much as $12.9 billion gambled this way by 2020, compared to their previous estimate of $20 billion made in mid-2016. Grove places much of the future of skin gambling on Valve and its control over the Steam API that enables the third-party websites; Valve had stated that changing the API to cut off these websites would also affect other legal activities that could be performed with it, making it difficult to enforce without more direct oversight and monitoring by Valve. It is unclear if the two lawsuits against Valve will come to a full trial, and thus attention is being placed on the Washington State Gambling Commission's pending actions to resolve the situation.
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