Lounge says it will acquire licenses allowing it to operate legally, and will also cut service to certain regions.
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.
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