Jeff Ifrah Discusses Recent Lawsuits Over eSports Skins Betting with Gambling Compliance

Jul 12, 2016

Jeff Ifrah Discusses Recent Lawsuits Over eSports Skins Betting with Gambling Compliance

A Connecticut video game player has filed a lawsuit against Valve, accusing the games developer and
distributor of allowing illegal betting to occur on the first-person shooter game Counter-Strike: Global
Offensive (CS:GO).

The plaintiff, Michael John McLeod, claims that Valve and third-party sites “knowingly allowed,
supported, and or sponsored illegal gambling by allowing millions of Americans to link their individual
Stream accounts to third-party websites.”

The lawsuit also alleges Valve engaged in racketeering with a handful of offshore gambling companies.
Those third-party sites were CSGO Diamonds, CSGO Lounge and OPSkins.

Through those websites, the 31-page lawsuit says, skins for CS:GO, which can be purchased from Valve,
“can … easily be traded and used as collateral for bets.”

…Jeff Ifrah, founder of Ifrah Law in Washington, D.C. , told GamblingCompliance he was not surprised by
the lawsuit. He went on to describe the lawsuit as “frivolous” and said “it is likely to be dismissed.”

“Whether or not skin betting is legal, this suit claims the consumer — who entered into a wager with his
eyes open — was injured by Valve,” Ifrah said. “Valve created a platform for play, and on this platform,
virtual items were played in a virtual world for virtual rewards.”

Ifrah added that the lawsuit does not meet the standard for a RICO violation.

Secondly, he said based on the recent Mason v Machine Zone “ruling in the Maryland courts, virtual
gambling under those conditions is not illegal.”

The lawsuit by a Glen Burnie, Maryland, woman named Mia Mason said she lost more than $100 and
claimed the free-to-play Game of War was an unlawful “slot machine or device.”

In his ruling dismissing Mason’s suit, U.S. District Court Judge James K. Bredar wrote that this case “ends
up being more about the need to draw clear and distinct lines between real and virtual worlds.”

…Ifrah said beyond the Mason case, it is “pretty easy to illustrate” why Valve is unlikely to be held
complicit in the sale and trading of skins.

“It’s the same as the government releasing currency,” Ifrah said, “just because you release something
legally doesn’t mean that you have to anticipate and expect to be held liable for all illegal uses that
might flow from it.”

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