They've got a pretty large audience, as it appears, large enough to bring enough attention to this, so while it definitely was a risk they must've been weighing heavily to publish this (being so different from their usual stuff), I'm glad they did.
Real shady stuff and definitely immoral. The most telling part of this whole debacle for me came from a (now deleted) tweet by TmarTn[1] where he states:
> That being said, everything we've done up until this point has been legal, that has been a #1 priority of ours. The day it becomes illegal is the day we cease activity.
So just because something is apparently not illegal (questionable, actually), it is apparently an acceptable thing to do. Hopefully legal action is successful against these frauds.
I call it the "perfectly legal" defense. There are lots of people who will engage in morally reprehensible behavior for their own gain which is otherwise legal. When I find folks who are of that persuasion I seek to find ways to no associate with them (sometimes easy, sometimes less so).
Generally, if they do it "right", then cannot be sued. But you can shine light on their activity (like this article is) and shame them.
I'm not American, nor a lawyer, but I have read that as they offered no disclaimers of ownership of the website they were promoting, that it might be possible to challenge them.
Not my field of expertise, but I know the FCC enforces a lot of disclosure requirements in advertising, even on YouTube. If you're running a game review channel and somebody pays you for covering their game, you're legally required to disclose the sponsorship of the videos.
Hopefully someone else can jump in with more specific rules, but I would imagine that if you're pretending to be a neutral third party mentioning a service when you actually own it, the FCC might have a problem with that.
I agree it would be the FTC. When we were running Blekko the FTC sent us (and every other search engine) a letter outlining what they considered the requirements for correctly identifying organic versus sponsored versus outright advertising results.
Yeah it's like that old xkcd mouseover text : "I can't remember where I heard this, but someone once said that defending a position by citing free speech is sort of the ultimate concession; you're saying that the most compelling thing you can say for your position is that it's not literally illegal to express."
I think that's a good example though maybe in the opposite way you intended. Censorious asshats like to conflate the principle of free speech with legality in order to continue being censorious asshats, which that comic is basically endorsing by pretending that "free speech" is only a legal concept.
The amount of fraud and thieves inside the community would make your eyes spin. I've had to straight block trading with a large chunk of the world.
A big part of this stems from the concept that in-game items are not _really_ money. It allows these online casinos to flourish because it's 'just in-game skins'! It's actually really similar to japans Pachinko system where you don't win money.. but you win something that can be traded for money right around the corner. In reality land, I can cash out of valves ecosystem for around 20% of in-game currency and some of those skins are worth thousands of dollars...
These gambling sites really piss me off because they hurt the community. You have to remember, we're talking about young teenagers getting robbed from these guys, and it's not just their lunch money. We are easily talking hundreds of thousands to millions in revenue each year.
With all of that said, I include valve very much in with the rest of these gambling sites.
If you're unaware, they run what are essentially slot machines inside there games.
A super simple breakdown is as follows:
1.) play game for long enough, get item drops ( used to be 4 total per week in csgo ) ( either random gun worth $0.20 ~ $10.00 or case ) Cases are locked ( must be unlocked to get goodie ). The keys to open are sold by valve for $2.50 a pop or by people like myself for $2.00 ( I want to cash out to USD so I buy directly from valve ).
2.) When you unlock a case you play a literal slot machine, there are crap items worth pennies all the way up to $xx,000 knives that you can win.
A big difference in valves case is that the reward rates are known to a pretty accurate number and you don't have to gamble to win in the system. As long as you play you get item drops that you can sell for real money ( rather than gambling them ). Wth the gambling sites, it's much more like betting on football but the house is probably screwing a bunch of people.
Honestly, I am surprised real online casinos don't try and play the same game. The could not allow you to cash out winnings, but allow you to purchase things with your winnings through their own site including "virtual tokens" which you could trade with "unaffiliated" third party sites for real money. Change the slot machines to never payout 0.00$ and boom you have a fully "legal" slot machine business.
Gambling is a vice like any other and adults should have the freedom to engage in it but I find it disgusting that Valve has supported a practice that so obviously promotes addictive behaviour..in games marketed towards those who are most vulnerable to it (young adults).
These lottery sites are just a product of the opportunity Valve created and its not surprising they are being used in fraudulent and immoral ways. It is sad, but not surprising that eSports is again being destroyed by ignorant game companies and shady opportunists.
I don't know for sure, but I would guess that based on the way IRS defines "income" (it doesn't have to be cash... it's anything of value) that gambling to win anything of real value would be illegal if not properly licensed.
Gets tricky! In the case of valve/games in general, are we really going to say all in game currency is 'real' money? If I make gold playing wow ( and this gold has a real world value ) should I have to claim income on that?
If I buy and sell items in-game is that taxable? I have to imagine that at some point down the line the answer to these answers will be a fat "YES!" assuming you believe VR will continue to take over.. People just spend too much time, engery, and cold hard cash inside these video games for a government body to say "No" to forever..
I've chosen to ( okay, my lawyers told me ) to just claim normal income on the transactions out of steam ( I sell the keys for USD ). And if you follow that logic, then gambling in the current context should be okay. May be other laws on the gambling side but it's out of the scope of my knowledge.
>These lottery sites are just a product of the opportunity Valve created and its not surprising they are being used in fraudulent and immoral ways.
While I definitely agree that valve is in some way culpable, I do feel that even without the systems they've put in place, you would see this sort of abuse. Look at Diablo 2 and early WoW. It's pretty obvious that many of the gray markets in today's online games were created in direct response to the black/gray markets that sprung up around those games. When these markets emerged, game developers basically had the option to either try and shut these systems down (not an easy task, perhaps impossible) or to reinforce and rebuild them. Clearly, most companies chose the latter. Valve even went as far as hiring the economist Yanis Varoufakis (who went on to become finance minister of Greece for a hot second) to help them manage their online markets. They clearly saw a lot of money being made and said to themselves, "why shouldn't I get a piece of the action?" I can't say I blame them, game devs should be compensated and compensated well. That being said, csgo is not a free to play game.
As a csgo player, I find the whole skin system incredibly frustrating. Not only does it add no real value to the game in terms of gameplay, it also encourages a lot of bad behavior, such as hacking, scamming, spamming, etc. It also seems pretty clear that the decisions valve makes directly influence how easy/profitable it is to engage in these behaviors. While I don't think they are solely culpable for bad behavior on their platform, I do feel that they could do more to discourage it, even if it isn't in their financial interest.
I don't really have a problem with this on its own. Many games have similar mechanisms that are usually seen as a way for gamers to give back to the developers for making a great game. The problem occurs when it's possible to trade these items with other users for real money.
> It's actually really similar to japans Pachinko system where you don't win money.. but you win something that can be traded for money right around the corner.
That's how most (all?) real life casinos work too. You get chips, which are exchanged for money.
To compare, in most casinos, the casino itself sells you the chips and buys them back. No need to fuss about location since it's all done in one place.
In the Pachinko system, you go into the "casino", spend money on a machine, win the "chips" yourself, then go to another "casino" nearby to sell the "chips" for actual cash.
This is how arcades started in the us. You used to win items that could be exchanged for goods in the store. There were laws created that rendered this illegal. I'd be surprised if some of them don't apply here.
Putting any effort in fighting "corruption" in online gambling/lottery/casino sites when it is known that the health, food, and politics industries are full of it seems like misdirected efforts to me.
Immoral? Pretty much illegal in most western countries. It is called fraud. But Valve isn't innocent in that mess, Valve created that market, no different from the patchinko system in Japan(where gambling is pretty much illegal, but they invented "tricks" and schemes to circumvent local laws, and it works exactly like these websites).
Absolutely fantastic step in the right direction for Valve.
Stop actual scammers, hackers, thieves, and criminals on your system rather than constantly adding "security theater" type features
I wish they would also remove those addicting elements from their games to make the world a better place instead of draining money by exploiting psychological effects.
It turns out the warning interstitial was actually added by a volunteer admin and has since been removed. Steam login to the gambling site is back to 100% functionality now with no warnings.
The fact that these YouTubers are using their own site to make these insane videos where they win thousands of dollars is disgusting. All of the teenagers and children who watch them are spending their mothers' credit cards on these basically-a-scam websites thinking they are going to win thousands of dollars. This is gambling, this is extremely shady, and these guys need to be stopped.
Oh how video games have changed. They've gone from sucking up all the quarters a kid had to turning them into a gambling addict and draining their parents' credit card.
It's not all video games, just the ones that have become competitive, like CS:GO. Any time something becomes "like a sport" people start using these tried and true ways of tricking people into giving them money.
Good call on the competetive edge, arcade games (the ones that eat up childrens quarters in the first place) also had it: there was a scoreboard, and there was fame to be had by being there.
you couldn't buy your way on the scoreboard the same way you can buy your way nowadays in "freemium" / "pay to win" games, and your ship in gyruss looked the same whether this was your first time playing or whether you had already spent weeks playing it
it's just not the same, the incentive in the old days was to get money out of players by making the game as hard as possible (which could be beaten by just getting better at it, which was where the fun was also), now it's always psychological pressure like FOMO or skinner boxes and so on, and there is no limit to how many "best value xxxx gems for $99.99" boxes / chests / ... you can buy
You're not wrong at all, but with many games the money being spent has zero impact on performance. All this CS:GO business is for stuff that's 100% cosmetic and changes nothing about gameplay.
When did gamers become such divas? Some of these skins cost more than realworld weapons. If this craving for fashion and bright colours holds, perhaps realworld gun ranges won't be so boring: less camo, more camp.
This is not something limited to gamers, it is a byproduct of the many-to-many social economy, where fame is a currency..
Everyone wants to stand out.. Whether it's a "Verified" badge on Twitter, or going viral in a Vine, or hitting a certain follower count on Instagram, or a very rare skin in a game, etc..
Fame, notoriety, visibility, anything but being part of "the rest" is something many people are willing to pay a high price for.. And there are tons of people out there more than happy to take those payments..
This article is wrong, that warning on red was literaly there months before this drama. This is done for many website not only lotto (the website owned by the youtuber).
Class action lawyers will have a field day with these guys. Especially their attempts to coverup, add disclaimers, etc, after the fact.
IANAL, but business fraud statutes are extremely broad. For consumers in California for example,
"any unlawful, unfair or fraudulent business act or practice" or "unfair, deceptive, untrue or misleading advertising" have a civil penalty of $2,500 per incident (for example, if 100,000 people were persuaded to visit their website, that might be $250,000,000 in damages). These are civil claims, where only a simple majority of the jury is needed.
When someone has to say their actions are "perfectly legal", they're usually running afoul of several laws they aren't aware of. Especially in an Internet business where you have potential exposure to so many jurisdictions.
There are so many of these sites, some sit behind a proxy because they are somewhat illegal in a lot of countries, e.g https://ezskinz.org/. It's basically the wild west for these sites, no regulation, no liability, just people making a load of money off of kids, it's sickening.
So create some vague laws to save the [women and] children? This mentality worries me. There's no problem here besides some privileged kids losing almost nothing in exchange for a less than healthy activity. Is this really a big enough deal that we should devote public time and add complexity into a very impactful domain in order to have a mere attempt at solving this perceived problem?
Those 'legal' gambling scams are all over gaming. Where the F are authorities?
Eve Online has a juggernaut EVEBet, plus hundreds of smaller 'oh look I won XX mones its legit' scams per month.
Even Nintendo cartridge collecting gets its share of rare cartridge Facebook group Raffle Wheels with shill accounts of the owner of said raffle winning x-xxK items repeatedly.
https://www.youtube.com/watch?v=rnXeFDQqBQw , one of the "winner" suckers not acknowledging the reality he got scammed(probably because he runs illegal raffle wheels too, which he admits at the end, mind blown :o) https://www.youtube.com/watch?v=YCeq--49Fu4
61 comments
[ 3.5 ms ] story [ 68.7 ms ] thread> That being said, everything we've done up until this point has been legal, that has been a #1 priority of ours. The day it becomes illegal is the day we cease activity.
So just because something is apparently not illegal (questionable, actually), it is apparently an acceptable thing to do. Hopefully legal action is successful against these frauds.
[1]: http://archive.is/wHdZG
Generally, if they do it "right", then cannot be sued. But you can shine light on their activity (like this article is) and shame them.
Hopefully someone else can jump in with more specific rules, but I would imagine that if you're pretending to be a neutral third party mentioning a service when you actually own it, the FCC might have a problem with that.
http://imgs.xkcd.com/comics/free_speech.png
A big part of this stems from the concept that in-game items are not _really_ money. It allows these online casinos to flourish because it's 'just in-game skins'! It's actually really similar to japans Pachinko system where you don't win money.. but you win something that can be traded for money right around the corner. In reality land, I can cash out of valves ecosystem for around 20% of in-game currency and some of those skins are worth thousands of dollars...
These gambling sites really piss me off because they hurt the community. You have to remember, we're talking about young teenagers getting robbed from these guys, and it's not just their lunch money. We are easily talking hundreds of thousands to millions in revenue each year.
If you're unaware, they run what are essentially slot machines inside there games.
A super simple breakdown is as follows:
1.) play game for long enough, get item drops ( used to be 4 total per week in csgo ) ( either random gun worth $0.20 ~ $10.00 or case ) Cases are locked ( must be unlocked to get goodie ). The keys to open are sold by valve for $2.50 a pop or by people like myself for $2.00 ( I want to cash out to USD so I buy directly from valve ).
2.) When you unlock a case you play a literal slot machine, there are crap items worth pennies all the way up to $xx,000 knives that you can win.
A big difference in valves case is that the reward rates are known to a pretty accurate number and you don't have to gamble to win in the system. As long as you play you get item drops that you can sell for real money ( rather than gambling them ). Wth the gambling sites, it's much more like betting on football but the house is probably screwing a bunch of people.
Gambling is a vice like any other and adults should have the freedom to engage in it but I find it disgusting that Valve has supported a practice that so obviously promotes addictive behaviour..in games marketed towards those who are most vulnerable to it (young adults).
These lottery sites are just a product of the opportunity Valve created and its not surprising they are being used in fraudulent and immoral ways. It is sad, but not surprising that eSports is again being destroyed by ignorant game companies and shady opportunists.
If I buy and sell items in-game is that taxable? I have to imagine that at some point down the line the answer to these answers will be a fat "YES!" assuming you believe VR will continue to take over.. People just spend too much time, engery, and cold hard cash inside these video games for a government body to say "No" to forever..
I've chosen to ( okay, my lawyers told me ) to just claim normal income on the transactions out of steam ( I sell the keys for USD ). And if you follow that logic, then gambling in the current context should be okay. May be other laws on the gambling side but it's out of the scope of my knowledge.
edit: I see this is already mentioned in the thread. Oh well :-)
While I definitely agree that valve is in some way culpable, I do feel that even without the systems they've put in place, you would see this sort of abuse. Look at Diablo 2 and early WoW. It's pretty obvious that many of the gray markets in today's online games were created in direct response to the black/gray markets that sprung up around those games. When these markets emerged, game developers basically had the option to either try and shut these systems down (not an easy task, perhaps impossible) or to reinforce and rebuild them. Clearly, most companies chose the latter. Valve even went as far as hiring the economist Yanis Varoufakis (who went on to become finance minister of Greece for a hot second) to help them manage their online markets. They clearly saw a lot of money being made and said to themselves, "why shouldn't I get a piece of the action?" I can't say I blame them, game devs should be compensated and compensated well. That being said, csgo is not a free to play game.
As a csgo player, I find the whole skin system incredibly frustrating. Not only does it add no real value to the game in terms of gameplay, it also encourages a lot of bad behavior, such as hacking, scamming, spamming, etc. It also seems pretty clear that the decisions valve makes directly influence how easy/profitable it is to engage in these behaviors. While I don't think they are solely culpable for bad behavior on their platform, I do feel that they could do more to discourage it, even if it isn't in their financial interest.
That's how most (all?) real life casinos work too. You get chips, which are exchanged for money.
To compare, in most casinos, the casino itself sells you the chips and buys them back. No need to fuss about location since it's all done in one place.
In the Pachinko system, you go into the "casino", spend money on a machine, win the "chips" yourself, then go to another "casino" nearby to sell the "chips" for actual cash.
Also you are (presumably) verified to be 18 (or 21?) years of age to gamble in a casino.
http://arstechnica.com/gaming/2016/04/congressman-blames-son...
Maybe they've not changed quite so much.
it's just not the same, the incentive in the old days was to get money out of players by making the game as hard as possible (which could be beaten by just getting better at it, which was where the fun was also), now it's always psychological pressure like FOMO or skinner boxes and so on, and there is no limit to how many "best value xxxx gems for $99.99" boxes / chests / ... you can buy
Everyone wants to stand out.. Whether it's a "Verified" badge on Twitter, or going viral in a Vine, or hitting a certain follower count on Instagram, or a very rare skin in a game, etc..
Fame, notoriety, visibility, anything but being part of "the rest" is something many people are willing to pay a high price for.. And there are tons of people out there more than happy to take those payments..
IANAL, but business fraud statutes are extremely broad. For consumers in California for example, "any unlawful, unfair or fraudulent business act or practice" or "unfair, deceptive, untrue or misleading advertising" have a civil penalty of $2,500 per incident (for example, if 100,000 people were persuaded to visit their website, that might be $250,000,000 in damages). These are civil claims, where only a simple majority of the jury is needed.
When someone has to say their actions are "perfectly legal", they're usually running afoul of several laws they aren't aware of. Especially in an Internet business where you have potential exposure to so many jurisdictions.
[1] http://www.leginfo.ca.gov/cgi-bin/displaycode?section=bpc&gr...
A.) Why does your kid have your credit card
B.) Youtubers have always made money from their viewers
Eve Online has a juggernaut EVEBet, plus hundreds of smaller 'oh look I won XX mones its legit' scams per month.
Even Nintendo cartridge collecting gets its share of rare cartridge Facebook group Raffle Wheels with shill accounts of the owner of said raffle winning x-xxK items repeatedly. https://www.youtube.com/watch?v=rnXeFDQqBQw , one of the "winner" suckers not acknowledging the reality he got scammed(probably because he runs illegal raffle wheels too, which he admits at the end, mind blown :o) https://www.youtube.com/watch?v=YCeq--49Fu4