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I recently stumbled upon a website where people gamble for Counter Strike: Global Offensive skins called CS:GO Jackpot. And to my surprise, it is extremely popular.

Is it legal for those running CS:GO Jackpot to do this? Do they need a gambling license?

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  • Gambling is not illegal unless the laws of the jurisdiction where the gambling takes place make it so.
    – Dale M ♦
    Jul 11, 2015 at 14:23
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    For those of us not familiar with the acronym, what is "CS:GO"?
    – Mark
    Jul 11, 2015 at 22:18
  • CS:GO refers to a game called Counter Strike: Global Offensive, a gun shooting game where players can buy "skins" for their guns in which it is permitted to trade/sell skins to the real world for real money.
    – KevinSmallChode TheSmallChode
    Jul 11, 2015 at 22:25
  • CS:GO Jackpot is a website unassociated with CS:GO, but solely for the purpose of gambling skins bought through CS:GO.
    – KevinSmallChode TheSmallChode
    Jul 11, 2015 at 22:26
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    Could you edit your original question, ideally with links, so that those of us who know nothing about CS:GO or the unaffiliated website can easily see and understand what you're talking about?
    – feetwet ♦
    Sep 29, 2015 at 22:54

2 Answers 2

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Arguments that they are digital game items with no "real world value" is a very bad argument to be tried to use here. That same argument could easily be used for BitCoin, gold, or silver, and yet, those are all considered to have value. If you tried to make a casino that ONLY took one (or a combination of those) as payment, they'd still under the jurisdiction of the local gaming laws. I'll add the site is a raffle site and almost every state in the USA considers raffles "gambling". There are very specific requirements which can allow them to be operated but that site definitely doesn't follow any of them.

It doesn't matter who assigns the cash value to it, just that enough people assign cash value. That is all that matters and given how many users sites like OPSkins.com have (over one million users), I'd definitely have to say that these game items have enough people that consider them to have value.

Also, just because you use something that doesn't have value to an outside observer, doesn't mean it's not illegal. They could be using blades of grass for all that matters, it would still be under the jurisdiction of gaming laws if there is a major cash exchange for blades of grass. In reality is just means they're using a fiat currency and that makes sites like OPSkins.com money launderers.

The only reason the question wasn't raised earlier was because the only gambling site prior to CSGOJackpot.com was CSGOLounge.com which is located in eastern Europe. On top of that, it has no house cut and therefore it allows betting there to be classified as "a game of skill" since you can obtain an edge and consistently win. Though that doesn't mean it wouldn't still need a gaming license given Navada's recent decision to ban paid fantasy sports sites FanDuel and DraftKings from operating in Navada.

However, with the rise of many other gambling sites, expect the government to come in and start saying something, especially given that about half of the game's population is under 18.

EDIT: One last point I'll make is that to say the game company doesn't set any prices is also an invalid argument because Valve sets the prices for keys, stickers, and sticker capsules (which it sells all three directly to customers). These are all fixed prices in USD. While there are sales for the sticker stuff here and there, keys are always a fixed price of $2.49 USD. This never changes and therefore Valve pegs the "value" of a key to be at most $2.49 USD. Because they don't let you sell it back to them, you can sell them second hand at a lower rate but the basic rate is still based on the $2.49 initial sale price.

Also, given the current laws on digital properties, the Steam Community Market Terms of Service, as well as the IRS's rulings (which you can confirm with an IRS agent), it all comes down to the secondary transfers of items being viewed as being taxable. If it's taxable, the economic value is there and gaming laws will apply.

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    Removing the ad hominem attack in the first paragraph would improve this answer a lot.
    – Jason Aller
    Dec 17, 2015 at 3:07
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    This answer needs to make sense on its own, without reference to other answers. Quote parts of the other answer if you like, but if Adam's answer is deleted, yours is not going to make a lot of sense.
    – jimsug
    Dec 17, 2015 at 4:09
  • The big point missing here is that the sites in question don't have anything to do with assigning the values of the weapon skins. People assign the values via Steam's services and those are simply mirrored by CSGO Jackpot. There is no money flowing from the user to the site and back either.
    – Adam
    Dec 17, 2015 at 20:44
  • Adam, the problem with that argument is that it doesn't matter whom is assigning the value to it, it's the fact that the value's being used in the first place. It turns it into a fiat currency, even if the issuer (Valve) doesn't mean it to be. The IRS still recognizes the barter system and the law still dictates that gains and losses through barter trades are still taxable. Because of this, the argument is easily stated that you're gambling property instead of currency which is still gambling in and of itself. P.S. Ad hominem and references to Adam's post have been removed.
    – user3760
    Dec 19, 2015 at 9:35
  • Also, the sites do actually assign values to the skins and other items. They use SteamAnalyst.com which pulls market price data from the Steam Community Market. They ARE using a price assignment system. Just go on their website and look at how items are being assigned values. It's not something random or a "Phoenix Case Key" wouldn't be worth a corresponding value from the Steam Community Market. They, in fact, assign the same value that other people do which means a given item is considered to hold a value, the same way a baseball card does.
    – user3760
    Dec 19, 2015 at 9:57
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It is perfectly legal. The main thing to realize here is that CS:GO weapon skins are not worth any money.

First-hand acquisition

You receive them first-hand from playing the game or from unlocking weapon cases. Neither of these acquisition methods give the resulting skins any monetary value whatsoever — they're simply cosmetic digital items contained within the game and aren't involved in outside matters.

Second-hand acquisition

You can trade for skins or you can purchase them from other people via the Steam Community Market. The latter option involves a monetary value being assigned to the skin.

Monetary value

  1. Skins via purchased cases – buying a case and key and getting a skin out of it does not give the skin a monetary value because it is still purely a game-contained cosmetic item with no association to outside matters. The value of the case and key do not become the value of the skin.
  2. Skins via Market – one person temporarily assigns the skin a monetary value they deem worthy and someone else comes along, agrees with the cost, and buys the skin. The skin loses all value because it is now entirely game-contained again.

The point of all the above info is that skins are purely cosmetic, and any monetary transactions taking place between two players or Valve and a player are not to permanently assign the skin a value but instead to simply provide a means to move skins from place to place.

Now for CSGO Jackpot. This website allows players to trade skins in for a calculated (i.e., not official or real) value based on demand at which point the skins are put into a pot and one player wins all the skins entered. The trick to this process, and quite possibly the reason people ask this question so often, is the fact that the site uses their calculated value to give the impression of a real value. All the skins flowing in and out of the site are never involved in monetary transactions within the site. These transactions all happen outside the reach of the site as mentioned earlier.

So looking at the website as a whole, it's a gambling service fueled by valueless cosmetic virtual items, not real money. Thus, illegal gambling isn't a problem here regardless of the user's age or any other factors.

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    "Skins via Market" - Can you elaborate more on this, I'm having trouble understanding how something can not have any monetary value despite an active market existing for it.
    – Jordan Bentley
    Oct 2, 2015 at 15:24
  • @Jordan Let's say I have a skin I got from playing. It doesn't have any value at all. Then I want to put it up for sale for $5. I'm creating a temporary value for it so someone else can have it. Then you come along and agree with the price and buy it. Now you have an in-game cosmetic skin with no recognized value because the $5 was just a way to get it from me.
    – Adam
    Oct 2, 2015 at 17:40
  • @Jordan This all revolves around the fact that CSGO skins aren't meant to have any value. The community themselves create a value as a means of exchanging them because they think skins are worth something.
    – Adam
    Oct 2, 2015 at 17:43
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    The community themselves create a value as a means of exchanging them because they think skins are worth something. Something about this answer troubles me. The italicized sentence applies to economics generally. Value really is just what we agree it is. This doesn't seem like really great reasoning. What about movies (seeing them at the theater leaves you with nothing) or an expensive designer handbag (the vast majority of the "value" is cosmetic and virtual).
    – Patrick87
    Dec 17, 2015 at 15:37
  • @Patrick87 Movies (the tickets) and designer handbags are given prices by retailers and customers must pay that price. With weapon skins, Valve does not set any price at all and leaves the community to make it all up.
    – Adam
    Dec 17, 2015 at 17:03

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