CS:GOLotto and Online Gambling

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supermanfromazle
SanjiHimura
Over the last week, the Counter-Strike community has become more up in arms over the emergence of gambling sites involving the game. One site in particular, CSGOLotto has emerged in the forefront of possible legal trouble with the Federal Trade Commission, which regulates online gambling in the United States. To tell the story properly, I must first tell you of two YouTubers, TmarTn and ProSyndicate (Real Names, Trevor Martin and Thomas Cassel respectively), and how they are involved with the site.

The site emerged as a way to gamble weapon skins in a game of chance* in pots up to thousands of dollars (if the two personalities are to be believed) on a virtual coin flip. Valve takes 15% of every skin sold, and CSGO Lotto takes 8% of the total pot size. TmarTn and ProSyndicate used their YouTube channels to showcase the site and demonstrate how they earn their cash, and many were minors.

Aside from the minors issue, which I will address later, the pair has failed to disclose to FTC standards that not only that they were working for the site, but were actually the owners of the site since day one.

Now they are trying, and failing, to cover their tracks for when the FTC comes calling, there is a class action lawsuit against Valve, CSGO Lotto, and Martin and Cassel personally for encouraging underage gambling.

The filing

Video below will explain it better than I can. Some top notch journalism:


7/11/2016 UPDATE: A new class action has been filed in New Jersey. Read more about it here.

To break this down by State:

Connecticut:
Valve is the only named defendant.

Florida:
Valve, CSGOLotto, Trevor Martin and Tom Cassel are named defendants. CSGOLounge, CSGODiamonds, CSGOSpeed, CSGOCrash, Skin Arena and OPSkins are "unnamed co-conspirators."

New Jersey:
Valve, Trevor Martin and Tom Cassel are named defendants. Will edit if I obtain a copy of the complaint.

Also, according to the YouTuber who broke the story, Honor the Call, the UK's gambling commission is now looking into Trevor Martin and Tom Cassel and CSGOLotto. BBC
 
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Cap'n Jack

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9,887
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GoldMineGutted
I'm not at all into CSGO, but I've been following this debacle thanks to H3H3. The way Martin and Cassel have reacted to the situation has been absolutely abysmal, they've been making all the wrong moves; responding to tweets, YouTube comments, hiding videos, changing information on the Lotto website, etc. I really hope they get what's coming for them.
 

homeforsummer

Bonbonbonbons!
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Irrespective of any wrongdoing, the bit about all of this that I find crazy is how many people are apparently willing to spend huge sums of money gambling on ways to make virtual guns and knives look pretty.

Even if there wasn't anything dodgy going on behind the scenes you'd have to be a bit daft to get involved. Can't help but think part of the more public backlash against Martin and Cassel is from people realising they've wasted a load of money on absolutely nothing of significance and it's easier to find scapegoats than it is to admit you've been a bit of a tit.
 

FoRiZon

(Banned)
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Singapore
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I'm into CSGO. But even I couldnt grasp how people can buy 3-5 dollars for a crate that will grab one skins (aka gun texture) with random chances (with only 2 rares out of 10-20 skins).

Well of course you can buy it directly at 5 dollars for most common up to 50 dollars for rares.

The solely reason its not gain as much backslash as COD did is because its just changing the texture, not the gun stats. Its also one of the main source for Players Steam Wallet income since they can create their own skins and submit it into Steam Workshop to be sold.

Imagine tenths of dollars for ONE TEXTURE.
 
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4,464
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Azle, TX
supermanfromazle
SanjiHimura
I actually took the time to read the lawsuit. I think that Valve themselves are complicit in this activity when they alone could shut it down like that. It is actually disgusting that Activision was considering the same thing with Overwatch.
 
14,207
Antarctica
TRAPPIST-1g
ProjectWHaT
I play CSGO and I've got an inventory worth about a bit over $40 I think. I spent 0 of my own money on them. I got them from saving up money from drops in game. I've also won some giveaways.

People like skins because it's personalization. You get to show people what you like. People who have the money buy their skins. They can do whatever they want with their money.
 

homeforsummer

Bonbonbonbons!
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They can do whatever they want with their money.
They can indeed. But that doesn't mean it isn't daft. It's still assigning monetary value to something that's effectively worthless. That $40 doesn't make you richer in the real world, you can't trade it for actual goods and services, and when CS:GO is eventually replaced by whatever the next Counter Strike game is, your $40 inventory will be worth diddly-squat.

If you've amassed it without spending a penny then that's great, and you've clearly lost nothing from the experience. But I've very little sympathy for anyone who feels they've been defrauded by the two Youtubers if they've been spunking large amounts of real, physical money making virtual objects look a bit better for the few tenths of a second it'll be visible to someone before they virtually shoot you in the head.

Gambling is never an easy win, but at least people who do it for real have a chance of winning something tangible.
 
4,464
United States
Azle, TX
supermanfromazle
SanjiHimura
7/11/2016 UPDATE: A new class action has been filed in New Jersey. Read more about it here.

To break this down by State:

Connecticut:
Valve is the only named defendant.

Florida:
Valve, CSGOLotto, Trevor Martin and Tom Cassel are named defendants. CSGOLounge, CSGODiamonds, CSGOSpeed, CSGOCrash, Skin Arena and OPSkins are "unnamed co-conspirators."

New Jersey:
Valve, Trevor Martin and Tom Cassel are named defendants. Will edit if I obtain a copy of the complaint.

Also, according to the YouTuber who broke the story, Honor the Call, the UK's gambling commission is now looking into Trevor Martin and Tom Cassel and CSGOLotto. BBC
 

Joel

Premium
8,137
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Halifax, NS
Noob616
They can indeed. But that doesn't mean it isn't daft. It's still assigning monetary value to something that's effectively worthless. That $40 doesn't make you richer in the real world, you can't trade it for actual goods and services, and when CS:GO is eventually replaced by whatever the next Counter Strike game is, your $40 inventory will be worth diddly-squat.
Most of these guys are actually making real money though, there are certainly some people who gamble on CS:GO simply for the sake of getting cool gun skins, but many get into it for actual financial gain. Through official channels you can only sell the skins for Steam credit, but there's many places online which set up real money transactions for skins through paypal and people are genuinely selling gun skins for hundreds or thousands of dollars/euros.
Even if there wasn't anything dodgy going on behind the scenes you'd have to be a bit daft to get involved. Can't help but think part of the more public backlash against Martin and Cassel is from people realising they've wasted a load of money on absolutely nothing of significance and it's easier to find scapegoats than it is to admit you've been a bit of a tit.
It's no less significant than any other kind of gambling. The fact that it's CS:GO skins is just a level of abstraction to get around gambling legislation like Pachinko machines in Japan. People are making real life cash off this stuff and it's hugely unethical to present a gambling platform that you own as something you just found online. I also think it's really dangerous because of how easy it is for teenagers to get into this stuff, there's a reason why most gambling platforms are restricted to adults and why getting kids into gambling is considered so unethical.
 

FoRiZon

(Banned)
8,645
Singapore
Singapore
7/11/2016 UPDATE: A new class action has been filed in New Jersey. Read more about it here.

To break this down by State:

Connecticut:
Valve is the only named defendant.

Florida:
Valve, CSGOLotto, Trevor Martin and Tom Cassel are named defendants. CSGOLounge, CSGODiamonds, CSGOSpeed, CSGOCrash, Skin Arena and OPSkins are "unnamed co-conspirators."

New Jersey:
Valve, Trevor Martin and Tom Cassel are named defendants. Will edit if I obtain a copy of the complaint.

Also, according to the YouTuber who broke the story, Honor the Call, the UK's gambling commission is now looking into Trevor Martin and Tom Cassel and CSGOLotto. BBC
I think its safe to say that having people around the internet circling them is much better fate than having them go into prison.

They already breaking quite significant laws honestly. Just hoping they realize their mistake before its too late.
 
4,464
United States
Azle, TX
supermanfromazle
SanjiHimura
Came across this article on Reddit about how the lawsuits don't have a case against Valve. Allow me to tear a new one into PC Gamer.

First of all, my qualifications: I am a tournament organizer for various video games for nearly 10 years, and my sister-in-law is (was?) a casino dealer for various games of chance and skill at Winstar Casino in Oklahoma.

Let me first start by going over some basic economics. Prior to 1971, all dollar bills in the United States was backed by two things, physical gold and the full faith and credit of the United States government in all transactions. This means that if you don't trust the government to back your paper dollars, you can go to any bank in the country and get a equivalent amount of gold, no questions asked. In other words, for every dollar in circulation prior to 1971, an equal amount of gold has to be held in Fort Knox.

With that bit of history out of the way, let's fast forward to today, and what is exactly going on with CS:GO's online currency, for reasons that I shall make clear soon.

When these online sites launched after the ability to trade skins from the Steam Workshop emerged, "Lord" Gabe knew that he had a problem on his hands. How to encourage trading, and eventually gambling, of the skins that people would pay $2.50 to unlock. He did it very carefully. As a US based company, Valve can't be seen as contributing to the charge of "delinquency of a minor", and carefully selected sites to support (by way of linking your Steam Account) to offshore-based sites. "This is not an accident. This is by design," a Steam employee was quoted at a 2014 game developers conference about a robust market place for skins. It was this market that Activision hopes to emulate with Overwatch, another First Person Shooter. By supporting a site like OPSkins, which is based out of Canada (if their Terms of Use is to be believed), they (OPSkins) sets the prices of skins as if they are a virtual stock market, but pays out in physical cash. Holding a valuable skin at one moment too long may cost you hundreds of actual dollars. Ditto on if you sell a skin one moment too soon. And Valve? All of this is backed at a 15% cut.

Okay, that explains one part now what about the gambling?

Gambling has been something that was going on since ancient times. Hell, they even gambled at Jesus's crucifixion. Remember what I said about Valve being supportive of select sites by linking your Steam accounts to the site in question (Like CSGOLotto and CSGODiamonds)? None of the online gambling sites have age verification to see if you're legal to gamble in your jurisdiction, just a simple check mark that states that you are 13 years or older! According to US law, this is considered underaged gambling because, as explained, OPSkins sets the prices of a skin as if it were a virtual stock market, all backed by Valve at a 15% cut. In other words, OPSkins is providing backing of your skins with cold hard cash, and that drives the market to valuable skins and items. Gambling sites, like CSGOLotto, charge up to 8% of the total pot in skins, and all of it backed overall by Valve because "Valve is 'well aware of the skins gambling that goes on,' as the company has refused to remove the trading option on the skins," according to the Florida Class Action suit.