Major gambling site CSGO Lounge makes awkward move toward legitimacy

The CS:GO skin gambling controversy that kicked off in June seemed to come to a head a couple of weeks ago when Valve issued a cease-and-desist letter to more than 20 gambling sites, including CSGO Lounge, one of the first and biggest websites in the questionably legal industry that grew around Valve's game. It was a fairly straightforward proposition: Commercial use of Steam accounts is “unlicensed and in violation of the SSA [Steam Subscriber Agreement],” Valve wrote, and could lead to penalties of various sorts, including the loss of the account outright. 

The general expectation was that gambling sites would be forced to shut down, although once such site, CSGOBig, said the closure was only temporary and vowed to return. But CSGO Lounge has taken a different tack by embracing its gambling heritage, even as it denied that it was ever actually a gambling site at all. 

“From the very beginning, the lounge service was intended as an entertainment service for the esports community of Dota2 and CS:GO, and we have never considered it as a real money betting. Virtual items in CS:GO and Dota2 have no monetary value and any community interaction with the virtual items is meant only for entertainment, without any profit interest,” a recently-posted notice explains. “We did not collect any commission or similar until June 2016, where we started doing it in order to improve our items drafting and quality of winnings, compensate items losses due to issues related to our product or issues with Steam community trading, to enable giveaways for the community and add more features to our service in near future.” 

“After all the recent events around virtual items and the official letter by Valve, which we have received as well, we were left out alone without any additional information or communication by Valve on this matter. We had to make a decision on how to proceed with Lounges as community place and entertainment service. The situation is highly confusing—we are not offering games of luck, we are not offering any transactions with real money or equivalents. Despite those facts, in order to avoid or reduce the confusion, we have decided to acquire a license to legally operate in most of the countries and be able to accept the esports bets by our community, as if it would be real money,” it says. 

Gambling laws differ significantly across the world and even within individual countries, and essentially Lounge is only now making an attempt to implement systems that comply with them. As Evan explained in his breakdown of the CSGO skin gambling scene, Lounge itself has been operating for about three years without any meaningful checks against a user's age or location. To me, Lounge's rapid move to implement these systems is a tacit admission of wrongdoing. 

“Starting from Monday, 1st August 2016, we will start limiting the access to the betting functionality for users visiting us from countries and regions, where online esports betting is forbidden. We will add additional registration and verification process and we require you to comply with our new Terms of Service if you want to keep using our service. We also remind that our service is only for users who are at least 18 years old,” it continues. “We will be operating according to the new terms and any transactions related to the items betting functionality will be handled accordingly to the new terms of service, and only on the territories, which do not forbid it by law.” 

The betting feature will be disabled in the following countries and regions, although users will still be able to withdraw any existing winnings and deposits:

 

  • United Kingdom
  • United States
  • Belgium
  • France
  • French Guiana
  • Guernsey
  • Gibraltar
  • Ireland
  • Isle of Man
  • Jersey
  • Martinique
  • French Polynesia
  • Reunion
  • Mayotte
  • Turkey
  • Spain
  • Scotland
  • Israel

The ban on betting from the US, UK, and parts of Europe in particular should severely impact the number of CS:GO items that are bet on the site. CSGO Lounge said it is trying to come up with ways for people in those regions to “stay engaged” with its site, although it also warned that it can't guarantee the safety or sanctity of items on the site if and when Valve decides to drop the hammer. 

That's the big question mark hanging over this whole thing. CSGO Lounge appears to be making moves toward legitimacy, but Valve's C&D specifically cites the unlicensed commercial use of Steam as the problem here—not that these are gambling sites, but that “Steam and Steam services are licensed for personal, non-commercial use only.” Even if the Lounge gets squared away as a proper, up-front gambling site, in other words, if it's still making use of Steam, it will presumably still be in violation of the SSA. Theoretically, it could disentangle itself from Steam and operate independently, but given how tightly integrated it, that seems unlikely—or at the very least, unlikely to succeed. 

I've reached out to both Valve and CSGO Lounge for comment. 

TOPICS
Andy Chalk
US News Lead

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.

Latest in FPS
Warhammer 40,000: Darktide Ogryn
Warhammer 40,000: Darktide adds a psychic horde murderzone mode and makes Ogryns even smashier
Starfield's companion robot giving a thumbs-up
Former Bethesda dev who quit Starfield to go solo says it's 'much less stressful as an indie' without daily meetings or 'office politics': it's 'very refreshing to just care about the game'
A crew of prospectors in Wildgate, featuring a robot, a rabbit man, and a small aquatic creature in a combination mech/aquarium.
Blizzard co-founder Mike Morhaime's new company is putting Sea of Thieves-style shenanigans in space with a new crew-based shooter
Team Fortress Spy being shocked
An FPS studio pulled its game from Steam after it got caught linking to malware disguised as a demo, but the dev insists it was actually the victim of a labyrinthine conspiracy
Neighbors Suburban Warfare screenshot a child aims a slingshot at a man from across a cul-de-sac.
A beta of backyard FPS Neighbors: Suburban Warfare is out now, and the balance discussion is hysterical: nerf trash can lids and children
Fragpunk
Somebody finally figured out casual Counter-Strike
Latest in News
Two brightly colored stormtroopers dressed like Run-DMC stand in front of PAX Australia's WELCOME HOME banner.
Tickets for PAX Australia 2025 are on sale now
An Enshrouded player in a recreation of Erebor from The Lord of the Rings
Kings under the Mountain! 33 Enshrouded players spent 10,000 hours to recreate this iconic location from The Lord of the Rings
A mech awakens.
Mecha Break developer is considering unlocking all mechs following open beta feedback
Lara Croft Unified Art
Tomb Raider developer Crystal Dynamics lays off 17 employees 'to better align our current business needs and the studio's future success'
A long bendy arm stealing money from people in a subway car
'You're a very long arm. You steal things. It's a comedy game,' explains developer of comedy game where you steal things with a very long arm
The heroes are attacked by monsters
Pillars of Eternity is getting turn-based combat to mark its 10th anniversary, and that means PC Gamer editors will soon be arguing about combat mechanics again