Court dismisses class action lawsuit against Valve over CS:GO gambling

U.S. District Judge John C Coughenour has this week granted the defendants' motion to dismiss a class action lawsuit filed against Valve and others over alleged illegal gambling on Counter-Strike: Global Offensive skins.

What's interesting here is that Valve's fellow defendants in this case are CS:GO gambling website owners like Trevor "TmarTn" Martin, who just happens to be one of many popular YouTubers scrutinized by the public this summer for promoting CS:GO gambling hubs without disclosing that they owned said websites.

Thus, while Valve appears to benefit from having the lawsuit dismissed (with prejudice) since the company's motion to seek arbitration in the case is now rendered moot, so too do some of the people who appear to have had a direct hand in publicizing the once-booming CS:GO gambling business.

Of course, Martin's website was one of many that received (and complied with) a cease and desist letter sent by Valve's lawyers in July.

According to a court filing, it was actually Martin (who co-owns the gambling website CSGOLotto) who filed a motion to dismiss the class action lawsuit, and a federal judge granted the motion on the grounds that "gambling losses are not sufficient injury to business or property for RICO standing."

RICO, in this case, refers to the Racketeer Influenced and Corrupt Organizations Act, which the plaintiffs alleged Valve and the other defendants had violated. They evidently alleged that the defendants had violated some other state and local laws to boot, but since the case was being heard in federal court and the RICO Act violation was the only federal-grade claim, the motion to dismiss was granted because the court does not have jurisdiction to rule on the other violations.

For further insight on this ruling and what it may mean for the game industry, it's worth reading through this explainer post on the subject by Bryce Blum, a lawyer who specializes in eSports law. As he notes in his post, this ruling doesn't mean this class action lawsuit is dead in the water (since the plaintiffs could still appeal or continue it in lower courts) but it is a potentially significant setback.