CSGO Skins Gambling
The use of virtual cosmetic items called “skins” and using them as sort of virtual currency in online marketplaces led to the huge player base of CS:GO that we know of today. Though these skins have no direct influence on the game, players keep them as a kind of a trophy, showing off to others how serious they are.
Valve added skins to the game as a part of an update in 2013. This ‘Arms Deal’ update introduced the system of being awarded random skin drops whenever the player reaches a certain milestone. They can also get souvenir skins by watching online professional matches within the game or through a Twitch account linked to their Steam account. These skins were supposed to stay in the player’s in-game inventory where they can equip the skins to play with or sell them in the Steam marketplace. Likewise, they can also buy skins from the marketplace by adding money to their account.
Players can also trade skins with others so that both parties can get the skins they want without spending any money. The idea was to get together all the CS community who were split between the new released Global Offensive, CS1.6, and Counter Strike: Source. Also, the new added eSports Weapon Case was well-received by the players as they can open more cases to try and get the rarer items. These events gradually led to a huge increase in the player base and also boosting the market’s own economy. Gradually, cases became a part of the virtual currency as well. Like skins, players were dropped random cases as level-up rewards. These cases contain a certain skin from that collection which can only be discovered by purchasing a key for $2.49 and opening the case. Most of the time, the cases contain common skins that have far less value than the cost of the key but occasionally, players get the rare items that sell for a profit in the marketplace. Thus, every skin that was released in the game got its own price from the community itself ranging from a few cents to special cosmetic knives worth thousands of dollars. Eventually, the skins with a stable market price were known as stable or liquid skins are were used in the same ways as keys whenever either of the party ran out of keys or had to pay a certain part of the key’s price. The money gathered from these made it favorable for professional play. Valve even went on to sponsor its own tournament where several teams were born consisting of high ranked talented individuals. The easy 5v5 gameplay was considered easier for the spectators to understand and follow which further expanded the player base who can again watch those games to earn ‘souvenir’ skins. Within 2 years of the update, more than eight million players played Counter Strike: Global Offensive and as of 2016, it was in the top five watched on twitch, peaking around 525,000 concurrent viewers during a championship round.
With the growth of CS:GO as an esport, players started to look into alternate ways to fulfill their inventory with rare skins. This led to the birth of numerous betting sites. This urge of skins made players to starting betting money and skins on the matches from games like Counter Strike: Global Offensive, Team Fortress 2 or even Dota 2. Upon winning, they get their money or skins back with a small part of the loser’s fund. Most of these enterprises are based outside of the US and are not licensed or regulated. Over time, those sites decided to expand beyond betting to maximize their profits. Those sites started offering gambling methods like jackpot, coin flip, and crash to get skins. The winners get to choose skins from the site’s inventory or continue further with the amount they have won. These caused the growth of a black market around CS skins, generally unregulated by Valve. At the same time, CS:GO’s esports scene holds unquestionable relationships with these gambling sites as the team’s profit from the sales of their respective stickers, which are valid betting items. The infamous iBUYPOWER incident in January 2015 resulted in the lifetime ban of seven incredibly talented players who were caught intentionally losing a match in order to win skins worth thousands of dollars. However, no further actions were taken regarding the usage of the sites. Valve just responded that under no circumstances, anyone in a professional team including the mangers and the staff is allowed to bet, gamble, or deliver information to others that might affect their betting. The exact monetary values processed by these sites are next to impossible to measure but Eilers and Narus estimated that almost $2.3 billion in skins were in trade as bets in esports in 2015 and $5 billion in 2016 of which only $2 billion is estimated to be used as bets. Apart from hurting the Valve market’s economy, there were other factors that led to serious concern about this prevalent skin gambling system. Especially, the younger part of the player base, which is quite a good amount, who are not practically allowed to gamble but do so being encouraged by peer pressure. With the pressure gradually increasing over the gambling sites, they started to move on to ‘Skincoin’. Backed by Ethereum, Skincoin allowed users to trade skins for skincoin which can be used for gambling. But that did not stop underage gambling which grew on to be a bigger problem. Justin Carlson, the owner of SkinXchange mentions countless cases where children have bet thousands of dollars from their parent’s credit cards only to lose them all at some gambling site. Other than this, certain websites were reported to be using some sort of browser extension that automatically places the bet for the user. Many sites are operated by offshore agencies. Several sites including CSGO Lotto, SteamLoto, CSGO Wild and CS:GO Diamonds suffered to issues involving transparency and promotion. In most of the above cases, a popular YouTuber promoted a gambling site without revealing their partnership with the site which ultimately led to FTC (Federal Trade Commission) either banning them from steam services or warn them.
The reaction from the US Government was quick and effective to some extent. On October 2016, the commission ordered Valve to immediately stop the transfer of skins for gambling activities or otherwise to face legal consequences, including criminal charges. Other than this, the UK Gambling Commission started an investigation into online skin gambling.
The Danish Government reviewed several games which include lootboxes (cases) and banned seven skin gambling websites. As a result, Valve had to disable CS:GO and Dota 2 trading in the Netherlands. Valve itself faced legal lawsuits from residents which resulted in some panic but it put Valve in a certain place where they had to fight their way out. Shortly after this, Valve issued cease and desist letters to around 50 gambling sites using their services. Twitch had to warn its users from promoting CS:GO gambling sites which followed in the ban of James ‘PhantomLOrd’ Varga, the highest viewed CS streamer at that time. In March 2018, Valve updated its store policy where it was stated that newly acquired items will get a seven-day cooldown before they can be traded again. This was intentionally done by Valve to target the gambling sites that used skins as their liquid cash as this will stop their inflow of ‘new’ cash for seven days. But this was met with critics and over 100,000 signed petitions were received my Valve to review this decision. Amidst all this, OPSkins, the largest skin marketplace, introduced Express Trade where the users can trade within the site with each other without actually getting the skin in their in-game inventory which avoided the cooldown. Valve sent a cease and desist letter to them demanding to shut down the Express Trade. Ultimately, they had to deactivate the bot accounts of OPSkins as they failed to act up. Estimated $2 millions of skins were lost in that process, all locked up in deactivated bot inventories. Again, in October 2019, Valve made all the keys ‘not-tradable’. This action fixed the purpose of the keys to only use for opening cases and they lost their liquidity as virtual cash.
These actions by Valve to counter gambling were received with a lot of hate and as a result, it lost a part of its player base. But it helped differentiate the original fans with those who only installed the game expecting some profit in return.
However, there are still ways to get some profit legally in-game without gambling your stuff away. There are tons of tutorials online teachings new players on how to start trading and get profit. Also, one can try their luck on trade-ups if he/she is not willing to spend that extra time scouting, buying, and selling in regular trading. All things aside, it is fairly safe to say that CS is not dying anytime soon due to gambling or the introduction of some new games because the game itself is timeless. Introduced in 1999 as a half-life mod, this game is still getting new players every day. Tgame sits at number one in steam by the current player count at the time this is written. With new updates to the game every week, the return of operations, and new game modes, Counter Strike: Global Offensive is set to reach new heights in the future.