
Virtual Weapons Are Turning Gamers into Serious Gamblers - eric_h
http://www.bloomberg.com/features/2016-virtual-guns-counterstrike-gambling/
======
CyrusL
The main fact missing from the article (and the comments here) is that most of
the virtual items are initially generated through gambling with Valve.

The majority of items in CS:GO are initially generated by purchasing a key
(for $2.75) to open a case. The game tells the user that the case contains one
of a dozen possible items, but not which item. The act of opening the case
generates an item that can be worth anywhere from $0.10 to $10,000. The in-
game UI for this process even looks like a slot machine:
[https://www.youtube.com/watch?v=WpFlpyZ4eBM&t=1m45s](https://www.youtube.com/watch?v=WpFlpyZ4eBM&t=1m45s)

If you want a specific item, (rather than a random one from a case) you can
buy it on the Steam Market. But that's a secondary market where the sellers
are other gamers. The items themselves were still initially generated from
playing Valve's slot machine game.

Valve has a vested interest in maintaining the perception that the items have
zero value in real dollars. If the items had real dollar value, then the act
of opening cases would make Valve a casino.

That's why when you sell your items on the Steam Market, you can only use the
proceeds for other items on Steam. The money is steam dollars, not real
dollars. There is no "cash-out" mechanism within Steam.

Of course, this perception is a farce because there is a large market outside
of Steam for selling the items for real dollars. Two popular websites are
[https://opskins.com/](https://opskins.com/) and
[https://bitskins.com/](https://bitskins.com/) . I don't believe that Valve
can maintain their position that the items have a real dollar value of zero
when lots and lots of people are trading them for real dollars. It's sort of
like a casino saying the chips are worth zero because the cashier works for a
different company.

I believe that this is at the root of why Valve is so comfortable with all the
3rd-party gambling sites. Valve has established their position that the items
are worthless, so normal rules about money shouldn't apply.

~~~
femto113

        It's sort of like a casino saying the chips are worth
        zero because the cashier works for a different company.
    

This is exactly how pachinko gambling works in Japan. You win a prize (doll,
medal, etc.) in the pachinko parlor, and sell it at the "we buy pachinko
prizes" place next door.

~~~
zyxley
That's exactly as much of a farce—it's just one that the authorities haven't
cracked down on.

~~~
webkike
Honestly - is it? Maybe the reasons I practice fighting games all day is
because I desperately need a new toaster.

~~~
dvanduzer
It weighed heavily on my mind to upvote this, based on your username, but it
is a truly insightful comment.

~~~
webkike
For what it's worth, the username is used by a Jewish person.

~~~
dvanduzer
Granted, I didn't think to ask you, but I've been walking around with the same
face, same name.

------
levemi
This story isn't about Valve but the author sure made it seem like it was. A
third party site uses Valve's API to enable users to bet skins on esport
competitions. This third party site uses Valve's API. Valve is in no way
involved in betting. The only thing they haven't done is turn off access to
the API for this third party company.

This is probably more because of Valve's management structure than it is about
any policy. Valve is a flat company with no managers. People work on what they
want to work on. Jobs like customer support and policing API use are akin to
taking out the trash, nobody wants to do it but someone has to. It just isn't
a priority.

Anyway, ignorant article with a dishonest attempt at trying to spin two things
together "illegal betting!" "valve" and failing.

~~~
thrubbery
No, Valve sells scratch-off tickets. Or if you like, they give you the ticket
("case") and sell you the coin to scratch it with ("key"). Same thing.

They're not directly involved in the sports betting aspect, but they'd be
running an illegal lottery without the fiction that their digital goods have
no real world value, which is the same fiction maintained by the betting
houses.

It stretches credibility to say they aren't _very_ involved.

~~~
Rmilb
I don't buy "scratch-off ticket" analogy. How are those crates with randomized
prizes different from a pack of pokemon cards that are randomized with cards
with differing value? They are pretty identical in the terms we are talking
about.

A failed suite was brought against pokemon in 1999.
[[http://www.nytimes.com/1999/09/24/nyregion/suit-claims-
pokem...](http://www.nytimes.com/1999/09/24/nyregion/suit-claims-pokemon-is-
lottery-not-just-fad.html)]

~~~
thrubbery
To the extent that there is a liquid secondary market in trading cards, I'm
not sure there is a real line between them and retail gambling instruments.
But, some things cases have more in common with scratchers than Pokemon
booster packs:

\- They're available instantly in effectively unlimited quantity, as many as
you want to buy.

\- Although technically there are many gradations, the quality label of an
item ("Factory new", "battle-scarred", etc.) is incontrovertible and easily
verified.

\- As a digital good, liquidation is extremely low-friction and virtually
risk-free. In fact:

\- You can click a button from within the game itself to see the current
market value in USD -- sorry, in "Steam credit" \-- and another to immediately
offer the item for sale at that price.

\- Maybe most relevant to this thread, even without liquidating they can be
easily used as currency to participate in unregulated online roulette, slots,
sports betting and more.

So, yeah, there are some differences.

~~~
cmdrfred
Astute analysis, Valve's proximity to the secondary market seems to be the
issue here. They also appear to allow you to generate keys for games that can
then be sold[0][1]. This provides you with an indirect way of cashing out your
earnings.

[0][https://www.g2a.com/call-of-duty-modern-warfare-2-steam-
cd-k...](https://www.g2a.com/call-of-duty-modern-warfare-2-steam-cd-key-
global.html) ($7.23 USD vs Steam price of $19.99 USD)

[1][https://www.g2a.com/mass-effect-trilogy-origin-cd-key-
global...](https://www.g2a.com/mass-effect-trilogy-origin-cd-key-global.html)
($13.66 for all 3 Mass Effect games or $34.99 on Steam)

~~~
jeeva
They don't allow end-users to generate keys for games - that is restricted to
the publishers or game creators (in smaller cases).

The keys on those sites are generally sourced from physical copies in cheaper
regions (as mentioned in a sibling comment), cheaply sold bundles (Humble
Indie Bundle, and other similar sites), and other such sources.

You could possibly make an argument for gift-copies of games[0] being
resalable, or games that can be added to third party systems (ME2 gives a CD
key that can be added to Origin, for example) though the latter would be
limited to one attempt per-game per-account.

[0][http://www.g2play.net/category/24773/factorio-steam-
gift/](http://www.g2play.net/category/24773/factorio-steam-gift/)

------
throwanem
How on Earth did anyone get through that entire article without using the
phrase "skin in the game"? I'm not sure whether to be impressed or
disappointed.

------
huac
CSGO gambling is fairly profitable because there is a lot of information
asymmetry and a long tail of inexperienced gamblers. I believe that will
change, because CS:GO is a more quantifiable game than many others:

The goals are easily defined: kill everyone, or defuse the bomb (usually kill
everyone).

The available stats are pretty representative of how matches go.

There is a compounding effect between rounds, since you choose to buy weapons
each round based on if you didn't die and still have weapons or how much money
you have left.

The biggest issue I can think of is how many kids will lose their cash.
There's no 18 year old requirement on the internet!

------
nefitty
If our brains have a hard time distinguishing between perceptions of reality
and imagination, what would make anyone think that currency, or tradeable
goods would be any different? Games like Clash of Clans scare the hell out of
me already, I can't imagine stumbling into a gambling addiction at 19 years of
age...

[http://www.forbes.com/sites/insertcoin/2014/03/01/why-its-
sc...](http://www.forbes.com/sites/insertcoin/2014/03/01/why-its-scary-
when-0-15-mobile-gamers-bring-in-50-of-the-revenue/)

~~~
PavlovsCat
This episode of Black Mirror says it all IMO.

[https://en.wikipedia.org/wiki/Fifteen_Million_Merits_%28Blac...](https://en.wikipedia.org/wiki/Fifteen_Million_Merits_%28Black_Mirror%29)

That is, I think it says more true things (that are more an analogy than an
exaggeration) than we're generally able to admit or even process. Our plates
are so full that our tiny spoons sometimes strike me as fig leaves rather than
eating utensils.

------
wcummings
>(After leaving Valve, Varoufakis became Greece’s minister of finance.)

~~~
mwcmitchell
this guys career path

~~~
nickpsecurity
Look where it started and what he helped manage:

[http://www.econtalk.org/archives/2013/02/varoufakis_on_v.htm...](http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html)

A bit unique to say the least.

------
tempestn
It took me a good 15 seconds to read the subtitle with that background
repeatedly stabbing me in the eyes. Bloomberg's design aesthetic is certainly
unconventional.

~~~
giancarlostoro
It indeed is a painful image to look at, I don't know why some articles start
out like this, I'm not particularly fond of this style for articles I'm trying
to read. Not sure when this became a thing, some articles do it right, but if
it's done in every single article it doesn't always work out, it's like a
place holder wasting my screens real estate.

------
samlittlewood
My older son has been engaged with this - mainly DoTA2, CS:GO and H1Z1. He has
had a fairly limited budget of real cash in (a few 10s of pounds) - and has
taken (and lost) significantly more than that in game through tournament
prizes, trades, gambling & drops.

My initial impression was rather negative - but I do concede that it has acted
as a kind of 'Kerbal Space Program' for markets and gambling - including the
spectacular explosions. He now has a far better understanding of supply,
demand and timing, along with a healthy respect for probability and risk vs.
reward.

It may have worked for him because of limited funds (have to go in thru' my
card), and there were things inside the system (knife skin) that he really
wanted to acquire.

I did, however, get him to name that knife 'SSD' in honour of what he could
have bought if he cashed out.

~~~
tudorw
When it comes to trading that is one cheap lesson!

------
wnevets
Blaming the gambling that's occurring on the virtual goods is quite silly.
People aren't gambling the e-guns because they want them, they have a dollar
value associated with them. This gambling could just as easily occur with
bitcoin.

~~~
JeremyBanks
I've spoken to dozens of gambling addicted teenagers in counter strike. You're
mistaken. The guns themselves are a status symbol which, combined with their
financial value, makes this way more enticing to them. They see their
favourite players (often sponsored by gambling sites) using them, and want to
do the same.

I've mostly stopped playing the game because it's too depressing and sickening
to talk to all of these kids, with undeveloped reasoning faculties, throwing
away every cent they get into bets they're convinced they'll win, until it's
all gone.

~~~
marcoperaza
Where are their parents? How are these kids throwing away any substantial
amounts of money without their parents knowing? Surprise, if you don't
supervise your kids, they do stupid shit like gamble away lots of money. If it
wasn't Counter Strike skins, it would be marbles or poker or sports.

~~~
tamana
The internet is hard to police. Brick and mortar Casinos won't let kids in.

------
peferron
The annoying thing is the amount of people whining about their losses or
gloating about their wins. I couldn't care less about gambling, so to me it
just drowns the discussion about the game itself.

Not to mention the unpleasantness when I read a tweet by a pro saying "sorry
for letting our fans down today" after a loss, and the first reply is some
random guy blaming them for the skins they lost. Maybe they're just trolls,
maybe they aren't, doesn't really matter.

At least during LAN tournaments the casters and analysts almost never mention
gambling, and would rather talk about the game and the players. Hope it stays
this way.

~~~
tamana
You are upset that people enjoy a videogame differently from you. Maybe the
gamblint is the game (that's where the money is made) and the fighting is the
sideshow.

~~~
peferron
If HN news threads suddenly started to be filled with comments such as "made
$500 betting on the Falcon 9 first stage to tip over after landing", would you
also answer "you are upset that people are interested in news for different
reasons than you"?

Rather, I would expect the community/mods to either downvote/remove comments
about betting, making it clear that betting should be discussed somewhere
else, or upvote/tolerate them, making it clear that people who prefer not
hearing about betting should go somewhere else.

Of course, going somewhere else requires effort, so my selfish hope as someone
not interested in betting is that the communities I browse will pick the first
option.

------
nfbush
>"use Valve’s software"

Not really that accurate; sure they access the valve servers, however most all
of them use custom software made by reverse engineering the steam client
called steamkit [1] and it's forks. Steam doesn't provide any public api's for
trading.
[1][https://github.com/SteamRE/SteamKit](https://github.com/SteamRE/SteamKit)

------
CM30
So let's get this straight shall we?

Apparently, allowing players to gamble in game for real money, fine. Allowing
people to gamble for them and then sell them through third party sites, fine.

But featuring a casino in a game causes the age rating to go up, even if it's
non interactive (at least in Europe)? Letting people gamble with fake money
that can't be exchanged for anything outside the game (in a casino esque)
setting causes the rating to go up?

Yeah, some of the media watchdogs have really screwed up priorities.
Apparently they find the Pokemon Game Corner more offensive than the mobile
app 'freemium' content or CS:GO case gambling.

------
awinter-py
satoshidice blocks US IPs.

[http://www.pbs.org/newshour/updates/bitcoin-gambling-
sites-f...](http://www.pbs.org/newshour/updates/bitcoin-gambling-sites-fly-
regulatory-radar/)

The core question here ends up being 'how many hops' in two senses: how many
hops will users tolerate & how many hops make it legal? Make A >= B and you
have yourself an arb.

This isn't the only new area of law where levels of indirection matter; it's
true with anonymization in online privacy as well.

------
Spooky23
So what? If running a sports book dressed like a fantasy sports league is
good, why not gamble on virtual junk?

------
inv13
People literally playing 50-50 coin flip games with skins, sometimes with
somebody else, or sometimes even just against a "bot". Its pretty crazy. Its
started with betting on matches, which i think is kinda okey, but i think coin
flip is the end. (cs:go player)

------
spriggan3
The elephant in the room is "supply drop" AKA gambling. That should definitely
be regulated.

------
cloudjacker
For some of those guns, I like how the virtual items cost as much as the
physical useful items.

~~~
YokoZar
Hopefully you use your in-game gun a lot more than your real one!

~~~
daodedickinson
The ammo for the virtual one is a lot cheaper. I met a gun collector who liked
to play Call of Duty because it had guns he owned in real-life, but in real-
life he could only use them at the range or in case of zombie apocalypse. I
told him I played Team Fortress 2 and explained what it was and he said "I
don't like fantasy games". So there are people out there who try to collect
the real and virtual versions in pairs.

------
tantalor
What is keeping gamblers from making bets in "skins" on real sports? Surely
there is more interest there than pro CS.

Isn't it just a coincidence that the skins originate in CS? If I want to make
a bet, does that matter to me?

~~~
eulo__
Some sites let you bet on Basketball and Soccer using the in game items.
VPgame is an example.

Their pools aren't nearly as big as the DotA and CS pools though.

------
wiradikusuma
I read the article twice but still don't get how this thing work: are they
gambling that certain player(s) with specific skin come up winning? (so the
skin makes it easy to identify players)

~~~
arkem
You bet on a team to win. The skins are used in place of currency. Instead of
betting $5 I be 3 skins and if I win I get my 3 skins back plus 2 more.

Since skins can be traded and sold it's effectively gambling for cash.

------
ufo
Its a bit sad to see the gambling sometimes overshadowing the esports sides of
things. I'm not a huge CS:GO fan but as a Brazilian the MLG Columbus major was
very exciting to follow :)

------
tantalor
> People buy skins for cash, then use the skins to place online bets on pro
> CS:GO matches.

What? Why do they do that? Why not use normal currency?

~~~
542458
From the gambling house's side it avoids regulation, plain and simple.

From the gambler's side: People already own skins (from playing normally) or
want skins that would be expensive to buy outright. Gambling provides an
exciting way of exchanging them. This kickstarts the gambling market. This
initial activity then attracts more serious gamblers looking to make a profit
in this low-regulation gambling environment populated by many inexperienced
gamblers. Cue feedback loop as more and more serious gamblers get involved.

------
gozur88
You can make the case that's gambling, but to call this "serious" gambling?
That's a stretch.

~~~
mod
Watch csgojackpot.com for a few minutes. Routinely has multi-thousand-dollar
pots going off.

It's slower than it used to be, but it used to be paying out > 100k/hour.

That's just one site, and I not the biggest.

~~~
ufo
Adding to that, some of the twitch.tv streams with the highest numbers of
viewers are people gambling csgo skins. Pretty sad actually...

------
intrasight
An interesting question, at least to me, is if Apple's App Store would allow
this form of gambling.

~~~
ryan-allen
Well, many of their top grossing apps are pay to play slot machines, though
you can't take money out of the system as far as I know.

~~~
intrasight
But Steam items can be exchanged on 3rd party sites for real dollars. So let
me pose this question. If I created an iOS app whose only purpose was to
purchase CS:GO Shadow Cases, would Apple deny the app?

~~~
ryan-allen
Ah I see the difference now, thanks!

------
squozzer
Does Bobby Kotick know about this?

