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Many skin gambling sites do not explicitly declare who owns them and may be operated by offshore agencies, leading to issues involving transparency and promotion. Some of these sites are located in offshore countries which do not have restrictions on gambling, putting them outside of law enforcement in some countries. In early July 2016, the video posted by “HonorTheCall” led to the discovery that one gambling website, CSGO Lotto, was owned by two YouTube users, Trevor “Tmartn” Martin and Tom “Syndicate” Cassell and supported in equity by Josh “JoshOG” Beaver, none of whom disclosed this relationship on their videos while promoting this website to their subscribers, with some of this promotion paid for in the way of CS:GO skins. This practice was identified as conflicting with the Federal Trade Commission on promotional videos, though the owners have claimed they are operating within the law. Valve subsequently blocked CSGO Lotto from the Steam services, but a few days later overturned that ban. A similar situation was discovered for YouTube user PsiSyndicate, whom promoted the site SteamLoto without disclosure, while being paid for the promotion in rare skins. One site, CSGO Wild, in announcing their closure in response to Valve’s cease & desist letters (described below), revealed they had promoted members of FaZe Clan who had previously did not reveal this promotion on their videos. At least one member of FaZe Clan has since updated their video archives to include a message regarding their CSGO Wild promotion following this announcement.
A further problem with these gambling sites were claims of rigging between some skin gambling sites and players. One site CS:GO Diamonds has admitted to providing at least one player with inside information to help make the resulting matches more exciting to draw viewers to the site. In January 2015, Valve banned seven professional CS:GO players from the same team after finding evidence that they were match fixing in association with skin gambling site CS:GO Lounge during a major competition. Further, Valve warned that professional CS:GO players and event organizers “should under no circumstances gamble on CS:GO matches, associate with high volume CS:GO gamblers, or deliver information to others that might influence their CS:GO bets”, threatening to exclude players that may even be suspected of such interactions. Despite this discovery, CS:GO Lounge continued to remain active, and later that year announced its sponsorship of a professional CS:GO team, raising questions of its legitimacy
On October 5, 2016, the Washington State Gambling Commission (where Valve is headquartered) ordered the company to “immediately stop allowing the transfer” of skins for “gambling activities through the company’s Steam Platform”, giving the company until October 14 to submit notice of compliance or otherwise face legal repercussions which may include criminal charges. The commission had previously contacted Valve in February over issues with the practice, specifically focused on issues relating to the use of the Steam API that enabled the third-party websites. Valve’s reply re-asserted it was not involved with these gambling sites and did nothing wrong under state law, further asserting that most of the Steam service features used by the gambling sites are primarily designed to be used to facilitate legal and acceptable practices for other users, and thus cannot directly shut down these services without impacting the bulk of other Steam accounts using the services legally. Valve continued that they have and will continue, in an offer of cooperation with the State, to identify those Steam accounts being used for gambling sites and shut them down due to violation of their end-user license agreement terms.
The Federal Trade Commission is evaluating whether some of the CS:GO players that have promoted these gambling sites have violated appropriate disclosure rules, however, the Commission has not issued a formal statement of their investigation yet.
In August 2016, the United Kingdom’s gambling commission issued a position paper for public comment that includes concerns over eSports gambling using virtual items. The Commission has started prosecution on two owners of a UK website that promoted virtual goods gambling around the FIFA games. The two have been criminally charged with advertising unlawful gambling and encouraging underage gambling.
In 2016, Australian senator Nick Xenophon planned to introduce legislation that would classify games like CS:GO, Dota 2, and other games with virtual economies with the option to use real currency to buy items with random or different value (as in the CS:GO weapon cases) as games of chance. Under this proposed law, such games would be regulated under gambling laws, requiring them to carry clear warning labels and may be required to enforce age requirements to play. Xenophon stated t