Valve Lawsuit: The New York AG Is Going After Steam — And 14 Million UK Gamers Want Their Money Back Too

Over the course of more than three decades, Valve Corporation has built what is arguably the most covertly powerful company in the entertainment industry somewhere in Bellevue, Washington, on the kind of low-key tech campus that doesn’t try very hard to announce itself. Not a single shareholder. There are no earnings calls. There isn’t a public-facing CEO using prepared soundbites to tour conference stages. Just Steam, which is thought to hold 75% of the PC gaming market, is running smoothly and collecting 30% of almost every transaction that goes through it. Regulators hardly looked twice for a long time. It seems like that time has passed.

Letitia James, the attorney general of New York, filed a lawsuit against Valve on February 25, 2026, claiming that the company has been using the loot box systems in Counter-Strike 2, Team Fortress 2, and Dota 2 to run what amounts to an illegal gambling operation. The fundamental mechanism that the AG targets is not subtle: users pay to open virtual containers, the outcome is determined by an animated spinning wheel, and the resulting items, which are purely cosmetic and have no gameplay advantage, can range in value from a few cents to, in at least one documented case, over a million dollars. By early 2025, the value of the Counter-Strike skin market alone is said to have exceeded $4.3 billion. According to the AG, Valve has made billions operating this slot machine, primarily through marketing to teenagers, and it is a slot machine with superior graphics.

Valve Lawsuit: The New York AG Is Going After Steam — And 14 Million UK Gamers Want Their Money Back Too

Almost immediately, Valve retaliated, posting a thorough response on Steam’s support pages and drawing parallels to blind-box toys and baseball card packs, which are randomized collectible items that have been a part of childhood for generations without violating gambling laws. Additionally, the company cited its own enforcement history, stating that it has introduced features like trade cooldowns specifically to disrupt gambling sites that take advantage of its ecosystem and locked over a million Steam accounts linked to third-party gambling operations. The company stated that “players don’t have to open mystery boxes to play Valve games,” noting that the majority of users never open a box. It’s a valid point. However, it doesn’t fully address the fundamental problem, which is that those who open boxes—and continue to do so—are the ones making money. Research consistently demonstrates that children who are exposed to gambling mechanics are four times more likely to experience problems in the future.

Reading the opposing filings gives the impression that while both sides are right on some points, neither is being totally honest about the more difficult issues. Valve is correct—for more than a century, baseball card packs have been lawfully sold to minors. However, no one has ever reported a Pokemon card being sold for a million dollars, baseball cards lack a live secondary market worth billions, and they cannot be sold for cash through third-party platforms that Valve has allegedly helped run. The lawsuit aims to capture the fact that the size and liquidity of Valve’s virtual item ecosystem differ significantly from the comparisons the company seeks.
In the meantime, Valve is dealing with a different and possibly equally significant legal challenge on the other side of the Atlantic. Digital rights activist Vicki Shotbolt filed a collective action against Valve in January 2026, which was certified by the UK’s Competition Appeal Tribunal under the name “Steam You Owe Us.” Steam’s up to 30% commission on game sales, according to the claim, locks developers into its platform and forces them to price-match on other storefronts, thereby preventing customers from ever finding lower prices elsewhere. The claim has been cleared to move forward to trial. Approximately 14 million UK PC gamers who may have been overcharged at any time starting in 2018 are covered by the £656 million total compensation estimated in the lawsuit. If the case is successful, individual payouts could be between £22 and £44 per person; these amounts are not life-altering, but they are significant as a sign of the court’s assessment of Valve’s market position.

The antitrust debate in the UK is well-known. In 2020, Epic Games sued Apple over commissions from the App Store, forcing a protracted public debate about whether 30% is a monopolist’s premium or a natural fee. Although the case had conflicting outcomes, it permanently changed the discourse. For years, Spotify has vigorously opposed Apple’s take rate. Valve, which has mostly avoided scrutiny by remaining private and maintaining a low public profile, is now being asked to defend the 30% figure in front of a tribunal because it has become a flashpoint throughout the entire digital marketplace industry. Although it’s still unclear if the UK court will ultimately determine that Valve’s dominance qualifies as anticompetitive behavior, the fact that the claim was certified following Valve’s initial attempts to have it dismissed indicates that this is not going away quietly.

Valve has previously withstood significant legal pressure. The company was on the verge of bankruptcy in its early years due to a lawsuit from Vivendi in 2002. Few people outside the gaming industry recall this near-death experience, considering how completely Steam went on to define digital distribution. This survival created a company that is especially cautious about being seen by the public and prefers to settle disputes in private rather than in front of the public. There is no such option available at this time. The company’s operations in its two most significant markets may change as a result of two jurisdictions, two distinct theories of wrongdoing, and a combined legal exposure.

Observing all of this, it is difficult to avoid feeling that the more general question—whether a private company should be allowed to operate the most popular gaming platform in the world with virtually no regulatory oversight—has been left unanswered for longer than any government official would be willing to acknowledge. Valve created something truly beneficial. Steam made PC gaming accessible in significant ways. However, size and utility do not always justify every practice that developed alongside them, and courts on two continents are now being asked to draw boundaries that lawmakers have been hesitant to do so up until now.