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In video games, skin gambling is the use of virtual goods, which are most commonly cosmetic elements such as “skins” which have no direct influence on gameplay, as virtual currency to bet on the outcome of professional matches or on other games of chance. It primarily has occurred within the player community for the game Counter-Strike: Global Offensive by Valve Corporation, but practice of it exists in other game communities. Valve also runs the Steam marketplace which can be interfaced by third-parties to enable trading, buying, and selling of skins from players’ Steam inventories for real-world or digital currency, though Valve itself condones the gambling practices.

Valve added random skin rewards as part of an update to Counter-Strike: Global Offensive in 2013, believing that players would use these to trade with other players and bolster both the player community and its Steam marketplace. A number of websites were created to bypass monetary restrictions Valve set on the Steam marketplace to aid in high-value trading and allowing users to receive cash value for skins. Some of these sites subsequently added the ability to gamble on the results of professional matches or in games of chance with these skins, which in 2016 was estimated to handle around $5 billion of the virtual goods. These sites, along with Valve and various video game streamers, have come under scrutiny due to ethical and legal questions relating to gambling on sporting matches, underage gambling, undisclosed promotion, and outcome rigging. Discovery of evidence of such unethical practices was discovered in June 2016, and led to two formal lawsuits filed against these sites and Valve in the following month. Valve subsequently has taken steps to stop such sites from using Steam’s interface for enabling gambling, leading to about half of these sites to close down.
Counter-Strike: Global Offensive (CS:GO) is a team-based first-person shooter developed by Valve Corporation and Hidden Path Entertainment, released in 2012. The title itself was a stand-alone game built atop the Counter-Strike mod developed in 1999, and subsequently built out into a game series by Valve. Players in the game take the role of a terrorist or a counter-terrorist, with each team having a unique goal to complete before they are eliminated by the opposing team or before the timed round is completed; for example, the terrorist team may be required to plant and defend a bomb at a specific site, while the counter-terrorists must eliminate the terrorists before it can be planted, or disarm the bomb once it has been activated.

History[edit]
Skins as a virtual currency[edit]
The introduction of the Arms Deal update to CS:GO in August 2013 added cosmetic items termed “skins” into the personal computer versions of the game. Following the model they used for Team Fortress 2, Valve enabled players to be rewarded with random skin drops as they played matches which would be stored in their user inventory within Steam, Valve’s software delivery and storefront client. Limited-time “souvenir” skins could also be earned by watching competitive CS:GO matches within the game or through a Twitch.tv account linked to a Steam account.[1] Unlike Team Fortress 2, the CS:GO skins do not have any direct impact on gameplay, only influencing the look of a player’s weapon. Skins, unique to specific in-game weapons, are given several qualities, including a rarity that determines how often a player might acquire one by a random in-game drop just by playing the game or as in-game rewards, and an appearance quality related to how worn the gun appeared.[1][2]

These skins were added to try to unify and increase the player size of the community, who were split between CS:GO, Counter-Strike v1.6, and Counter-Strike: Source.[1] According to Valve’s Kyle Davis, the introduction of skins to CS:GO was to encourage more players for the game by providing them free virtual items simply by playing the game which they could then use as part of the Steam Marketplace to trade with others, boosting the Marketplace’s own economy.[3] The Arms Deal update drew an audience back to the game, with a six-fold increase in the average number of players from the previous year about seven months after its release.

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