Deception, Lies, and Valve

Summary

Highlights

• Valve is heavily implicated in the ongoing issue of underage gambling in Counter-Strike. 🕵️‍♂️
• The company has faced criticism for not doing enough to stop gambling activities related to their games. 🎯
• Despite public pressure, Valve's actions against gambling appear minimal and ineffective. ⚖️
• Gamblers frequently use third-party sites to bypass Valve’s internal restrictions and cash out valuable skins. 🌐
• Legal loopholes have allowed Valve to avoid stricter gambling regulations up to this point. ⚖️

Key Takeaways

• Valve's lack of aggressive action against underage gambling raises eyebrows and questions their ethics. 🎮
• The gambling scene in Counter-Strike is a billion-dollar industry that appears to indirectly benefit Valve. 💰
• Legal loopholes are a recurring theme, allowing gambling practices to thrive within gaming platforms. 🚪
• Efforts to regulate or challenge these practices often fall short, leaving young players vulnerable. 🛡️
• Coffeezilla calls for Valve to take responsibility and address the issue comprehensively. 📢

Overview

Deception, Lies, and Valve Transcription

• 00:00 - 00:30 I got bribed to make a video exposing a single Counter-Strike casino but I decided to expose the whole industry instead which led us from pitchforks to people rushing stages millionaires making excuses and Esports teams who say they can't survive without gambling the lack of any accountability making me wonder about the biggest casino of them all valve the owner of Counterstrike now if you've watched the last few episodes you know there's a lot of opinions about what the problem is who's the villain who's the good guy hardly anyone agrees on anything thing but I did find one
• 00:30 - 01:00 thing that nearly everyone agrees on I started gambling on Counter-Strike when I was probably 13 years old 13 years old I think I was 14 valve definitely does have an underage gambling problem I think valve does have an underage gambling problem yes it is underage gambling a disguise because it holds real life value underage middle age overage however you want to slice it when I was young that's the most easily influential age to get people in cuz I can't go to real Casino casino and
• 01:00 - 01:30 gamble like what I did back then was I I went to our local video game store bought like $20 worth of steam credits I would buy skins with those $20 credits no verification at all right this is the most consistent answer I've received in a story where no one agrees on anything underage gambling is rampant on Counterstrike not only that valve has known this was a problem for at least 8 years and for those eight years valve has done things here and there but they they've never seriously tackled offshore
• 01:30 - 02:00 gambling issues with some speculating the reasons why I think they have all the responsibility I mean you can pass me some of that if you want but ultimately they're the Kingpin reaping in all of the money or majority of the money and there's a reason why they haven't killed it yet they've possessed the power for all these years but they allow it to go and I feel like they do the bare minimum Crackdown to allow it to keep operating that's right now the person you just heard has motives for
• 02:00 - 02:30 putting the blame on someone else either way today I want to investigate valve's role in Counter-Strike gambling how we got here what valve can do about it and how they've been fighting the change that is so desperately needed so let's start from 2013 when loot boxes were first introduced to the game in an update valve called the arms deal it was first described as all the illicit Thrills of Black Market weapons trafficking without any of the danger which is kind of true they did create a
• 02:30 - 03:00 Black Market of skin betting the only thing that I find false here is the quote without any of the danger because if you look at the wrong Cino this guy might show up bet your house either way the arms deal update was the start of Counter-Strike gambling as we know it with the introduction specifically of loot boxes we're going to open one here so you can experience what that's like first you take out your wallet pay $250 the case opens and a wheel spins where items of varying Rarity pass by knives and gloves are particularly
• 03:00 - 03:30 valuable because they're particularly rare but usually you get an item worth pennies now you might notice this whole process especially the near misses resembles a slot machine I believe that's not on accident this is the same company that hired experimental psychologists to design parts of their games so my name is Mike amander I'm an experimental psychologist at valve applying knowledge and methodologies from psychology to game design so thinking about how how knowledge of human behavior Can can impact the choices that we're making the hope is that we we can take what we know about
• 03:30 - 04:00 psychology um about the predictable ways humans might react or respond um and apply it to game design um and induce various um various responses or particular responses right valve is a game Studio that uses psychology to manipulate user behavior and it's harmless in some areas when optimizing for fun or excitement but when we look at loot boxes what is valve optimizing for what behaviors are they trying to cause when they make their loot boxes look like like a slot and the answer I
• 04:00 - 04:30 believe is they want you to just spend more money and making a slot simulator has been incredibly effective for that in total some estimates are that 1.9 billion cases have been sold at $2.50 per case that's 4.9 billion for valve all spent on video game Cosmetics you can then trade these on the steam store which all gets valve even more money cuz they take a cut last year alone Counter-Strike made about a billion dollars opening cases the Skins update
• 04:30 - 05:00 was a big change for the community giving you something you can buy something that you can customize your guns it's done where it doesn't necessarily impact gaml but it gives people this exciting element to keep coming back and keep playing to get more skins so you might be surprised to learn that although valve designed a machine that looks like gambling valve actually insists that it's not this is because of a loophole where technically valve doesn't let you cash out your skins you can sell them for money for your steam
• 05:00 - 05:30 wallet but you can't convert that steam wallet for cash so the Skins are technically worth nothing in the real world they're just worth something in steam's Marketplace meaning their slot machine of skins isn't gambling at all or that's what they would say the expected value is actually zero and all that sounds great except for the fact that obviously you can go to these third party sites and get real money real crypto you can also go sell them on trading websites which is also a huge
• 05:30 - 06:00 part of this economy where you can go sell your skins for cash you never have to interface with the slot machine side of it so this idea that skins aren't worth money is just it's just not true it's just that valve isn't directly allowing cash outs which is a loophole that allows people of all ages to open loot boxes trade skins for money all without showing ID it's worth saying this loophole isn't new it's the same thing Pachinko parlor use in Japan because there gambling is illegal but Pachinko parlers are gambling but
• 06:00 - 06:30 technically not because when you gamble instead of winning cash you win these small silver balls which once again you can't cash out in the Parlor you have to go to a thirdparty vendor [Music]
• 06:30 - 07:00 [Music] all reminiscent of exactly what valve does too you can't cash it out in the steam store you can only cash it out on third-party sites it's just gambling with extra steps however one player of the game explained to me that even this is a pretty weak excuse has anyone explained to you the steam decks so this right here it's the maxed out version
• 07:00 - 07:30 I think it's like 650 spent in Steam funds now how do you get steam funds you can put money on you can sell stuff on the store you can unbox a case get a $1,000 knife sell it and then get this so items don't have value how do I how do I buy this yeah he makes a good point I think it's pointless to argue too long against these loopholes though because there's millions of arguments some used by Valve other used by by Counter-Strike casinos for why gambling
• 07:30 - 08:00 isn't gambling you have clashes sweep Stakes loophole hype drops you never lose money loophole you have CSO roll saying you can only Cash Out skins everyone in this story from casinos to valve is using legal loopholes so instead of trying to legal eagle all of them I'm just appealing to your common sense if it looks like gambling mimics gambling and the players say it's gambling it's gambling now that we understand this let's take a look at one of valve strangers positions they've
• 08:00 - 08:30 ever had to take see back in 2016 when gambling sites hit mainstream news for scamming a bunch of their users and underage gambling valve looked really bad and said they were going to put a stop to steam users who run a gambling business to do this they sent out several cease and assist letters and some of those sites ceased but others didn't 8 years later some of the same Casino sites are still operating meanwhile influencers are clearly still getting paid millions of dollars Esports teams are still sponsored by many of these Gam businesses that valve
• 08:30 - 09:00 supposedly wants to shut down this is where we come to a question why does valve say they want to shut down gambling but they fail to actually do it some will say they can't like these offshore casinos are literally impossible to stop but I don't buy that this is the same company who will happily destroy parents in court who sue them for pushing gambling where's valve's legal appetite to go after these offshore casinos I don't know it seems to me they could have banned the saw a long time ago using any number of Ip
• 09:00 - 09:30 arguments legal attacks or simply software patches why they haven't is where we have to get into speculation I have two thoughts as to why firstly I believe it's good for valve to be in an eternal fight against gambling it's good Optics if you never defeat the evil offshore casinos no one has to wonder why your loot boxes look so much like slot machines we got to defeat the evil offshore Casino guys first guys in fact this is the exact attitude they had in 2016 if feels like valve itself has
• 09:30 - 10:00 specifically designed this game to operate almost exactly like a slot machine even back then valve got a lot of heat for exactly the same things we're talking about now but everyone felt that the casinos were doing worse things so before we demanded change from valve everyone felt that we should address the casino problem first and valve was happy to play the hero and send those cease and assist letters out so if you can always pass the buck to someone more shady than you and say you're working on it it's easy to avoid
• 10:00 - 10:30 problems at home that's my first guess but there's a second maybe more Insidious answer shutting down offshore gambling is just not a priority because it's not very profitable it may even cost valve money even though they probably would deny this and say they don't have the data you see valve May profit from these casinos indirectly that is according to the journalist at people makes games they made this argument better than I ever could and I'm going to use a portion of their great documentary here we've got steam over here here and the betting sites
• 10:30 - 11:00 over here on different websites and both Industries claim no relationship with the other but to start with the culture of skin betting is for many people a feature of valves games as advertised by YouTubers and streamers and virally by your friends who are gambling valve is going to be acquiring more visibility and players for its games from anyone who finds this extra functionality appealing a thought I heard from almost all of the gamblers I spoke to was that valve can't shut down these casinos permanently because that would wreck the market value of skins thereby hurting
• 11:00 - 11:30 every player who owns any valve skins but to me that just sounds like evidence that one big reason valve Skins are so valuable and why people want them so bad is valve allowing the betting sites to exist look I'll be honest I think he's right valve is indirectly profiting from these casinos but it's not just one journalist's opinion even experts have concluded the same thing so in January of 2016 the Washington State gambling commission and that's the top regul body in Washington state where valve is
• 11:30 - 12:00 headquartered they received a complaint that prompted them to begin an investigation into Valve Corporation 21 months later when that uh investigation concluded what they said was valve quote knowingly facilitates the illegal wagering of skins end quote and the question you know that it really came down to for these Regulators was is valve benefiting in the opinion of The Regulators yes so this feels like like a really big deal Washington basically
• 12:00 - 12:30 concluded what a lot of people have suspected but why did nothing happen What The Regulators told me is that the prosecutors didn't feel that they would be able to prosecute the case successfully so they did not pursue a case now that doesn't take away from the findings of The Regulators who are the experts on this it just means that a case was never taken to court huh so even though Regulators found one thing prosecutors have declined to pursue it
• 12:30 - 13:00 now of course I did think all of this was pretty shocking so of course I wanted to ask Val followup questions but they didn't respond to my request for an interview or for comment however I did find interviews from about 8 years ago during the first Scandal where Val was asked very similar questions about whether they benefited from all this gambling and the way they respond is kind of telling for coun Quake in particular I'm curious you feel like gambling has a had a positive in the all has you feel like it's grown interest in
• 13:00 - 13:30 the game over the past years that it's been available um yeah so I mean well what what what's the question has gambling led the greater interest in Counterstrike has it yes um we don't know uh we don't have any data um to support that yeah but uh uh so I don't know isn't that incredible a company that nearly has all the data has
• 13:30 - 14:00 no idea if a billion dooll gambling industry helps them this is a company that hires literal economists to work on their video game economies they say in those job descriptions one thing we have at valve is data lots and lots of data yet on this one issue we don't have any data um to support that and we're supposed to believe they've never conclusively found if gambling hurts or helps them I find it hard to believe
• 14:00 - 14:30 especially when in the same interview a little bit later the CEO Gabe Newell claims data isn't really hard to get involved if there's something I need to know I'll I can find out about it we don't have any data and information is pretty freely available inside of the company there's you know it's just not hard to if there's something you need to know to find out about it but there's no uh you pull your information there's no push towards you right of course it's not hard to find the information these are the people who own steam they have
• 14:30 - 15:00 all the information so here's a fun rule for you to think about anytime a company with this much data tells you we don't have the data it means we don't like what the data says or we don't want to know what the data says so we've avoided looking and by the way valve admits only moments later that the Counterstrike player base goes up when valve releases things that make the game quote a stickier experience that growth in the player base typically comes either after the game has been on sale uh or after
• 15:00 - 15:30 we've added some features to the game that make the game a stickier experience okay we're getting somewhere growth happens when valve makes their game a stickier experience now I've got a followup what's a stickier experience than a casino it's so sticky people have a problem stopping you can't honestly say our player base grows with a stickier experience and also we have no data that gambling has grown interest in Counterstrike because those two sentences are not compatible and oh by the way we've been fighting gambling for
• 15:30 - 16:00 eight years and we keep getting outsmarted by 20s something year olds in kurel like you're just not trying that hard then but we've even got more evidence for their lack of effort here because valve will occasionally take action on casinos most often when they've been pressured to do so by bad press just take the pgl majors which started this whole thing it was a horrible look for valve directly caused
• 16:00 - 16:30 by the casinos the result of that was almost immediately an update released only days later that for the first time in a while actually did something basically valve made it so that when you traded something in Counterstrike it was hard to then gamble that item basically they changed the way that items showed up in your inventory I'm not going to go into too much detail but it kind of messed up the way casinos were tracking items now the end result of this is that casinos along with skin traders in general are slightly punished now my
• 16:30 - 17:00 point here is this patch could have been done at any time the reason it happened a few days after the pgl major was this disruption this was a clear signal from valve to the casinos you stepped out of line you cause trouble we cause you trouble right I should note the casinos are going to find workarounds to this but there aren't infinite workarounds it's obvious to everyone including the casinos that if valve really wanted to shut them down they could since valve
• 17:00 - 17:30 ultimately controls the ecosystem by which everyone trades and tracks items so if they wanted to definitively shut down the casinos they could but it just is going to require work work that valve doesn't seem to have a huge appetite to do maybe because it would impact other players maybe because they just historically haven't done that work unless they're forced to by press governments or the casinos themselves to do so now look it might feel like I'm
• 17:30 - 18:00 being a little harsh towards valve here or I'm putting a lot of the responsibility on them and if it feels that way it's because I am I do think they need to be the ones to change for two reasons one no matter where you look in the chain of responsibility from influencers all the way to governments everything points to them valve is easily the most equipped to solve things because they are a single stake older everywhere else you look there's
• 18:00 - 18:30 coordination problems at the influencer level if you don't take Gamba money other influencers will at the casino level you want to be more regulated your competitor doesn't even at the Esports level you don't take a gambling sponsorship your competitor will even at the government level if one country bans it just take a VPN somewhere else where it's not banned not to mention even when governments do ban it and by the way I think they should be part of the solution but even when they do ban it valve can try to maliciously avoid
• 18:30 - 19:00 regulation with new loopholes which is not a hypothetical they've literally done this in France for instance where loot boxes that can be traded for money are banned valve updated their game just in France to put in what they call an X-ray scanner where you can see the contents of your loot box before you open it making the results technically not random the catch is though you can't open another loot box until you pay to finish opening the one you've scanned
• 19:00 - 19:30 it's just a workaround the law to allow the same gambling just legally I guess but it turns out this may have been a tactical mistake because it kind of gave away the game valve is playing because remember they're trying to pretend not to be gambling but this loophole they're using is literally a loophole slot machine companies use where they will do What's called pre-reveal the result of a slot spin Before You Spin and say it's
• 19:30 - 20:00 not gambling as well in States like Missouri in America this is how gambling companies were trying to avoid the gambling classification funnily enough while learning about this loophole I found this quote the gambling companies don't like each other and will claim one company is breaking the rules while they apparently follow them I'm getting flashbacks to this story as well but the point is if valve is resorting to using gambling company loopholes from the Pachinko parlor loophole to the pre-spin loophole what does that say about what
• 20:00 - 20:30 they're selling even valve's own users are realizing this in a post about the French law where they dodged it with this pre-reveal people are saying quote they seriously skirted the laws that stupidly easily sounds like valve is using loopholes taken straight from casinos so that's why I'm saying yes countries should regulate predatory Loop boxes designed as slot machines yes influencers shouldn't take dirty deals yes casinos should in theory self-regulate but if we're looking where
• 20:30 - 21:00 to lay out a plan to fix valve's underage gambling problem it all comes back to valve no one else can unilaterally shut this down except for them and at the same time no one stands to make so much money from keeping it open and lying about what exactly these cases are using the same arguments casinos have been making for decades as valve and that's why I'm being so harsh because frankly they deserve it this isn't some indie video game Studio
• 21:00 - 21:30 that's struggling to survive valve is pound-for-pound one of the most profitable companies in the world period not just because of gambling in spite of it with just steam they're already larger than most publicly traded gaming companies affecting millions of people a day without gambling so it isn't crazy to expect basic responsibility from a company who touches so many lives unfortunately valve is not only uniquely able to take action they're also
• 21:30 - 22:00 uniquely equipped to avoid it they're privately owned an international company and are known for not responding to journalists in situations like this or reacting to the press in any way so for my last argument I'm not going to say a word I'm just going to let Daddy Gabe do the talking in the hopes of inspiring some change at this Mega Corp here's Gabe's thoughts on valve and their responsibility people people at valve have to get used to working without a a safety there's nothing between you
• 22:00 - 22:30 and a customer you can do something you can come in that morning and buy 2 o'clock in the afternoon you have [ __ ] a million customers right and they're all emailing you they're all me emailing you and uh you bet you know you probably should fix it right uh but nobody's looking over your shoulder and for some people that's liberating for some people it's F yeah I really can't think of anything that better captures the valve gambling story you've screwed a million customers you should probably fix it but
• 22:30 - 23:00 no one's looking over your shoulder it has been 8 years since valve set out to end these black market casinos built around their game and still the industry is Alive and Well in fact the harassment and threats in that industry are worse than ever meanwhile counter- strikes own competitive players influencers and casinos all say there's an underage gambling problem but valve seems no closer to fixing that either maybe that's because the only way to fix it is
• 23:00 - 23:30 to acknowledge that counter- strikes loot boxes are a little too close to slot machines and look I'm not even saying that if they want to go that route they can't but at least ID your customers at least acknowledge what it actually is otherwise you're just trying to have your cake and eat it too you want gambling without any of the responsibility that comes with it and we all know that that kind of cake is a lie look I know this is a long shot and maybe it's pointless I look back 8 years
• 23:30 - 24:00 and I see many of the same stories of victims villains and valve with zero real change but knowing the odds are slim hasn't stopped kids from getting addicted so it's not going to stop me either this is a gamble I'm willing to take [Music]
• 24:00 - 24:30 [Music]