Skin gambling
In video games, skin gambling is the use of virtual goods, often cosmetic in-game items such as "skins", as virtual currency to bet on the outcome of professional matches or on other games of chance. It is commonly associated with the community surrounding Counter-Strike 2, but the practice exists in other games such as Electronic Arts's FIFA. Valve, the developer of the Counter-Strike series, also runs the Steam marketplace which can be interfaced by third-parties to enable trading, buying, and selling of skins from players' Steam inventories for real-world or digital currency. Valve condemns the gambling practices as it violates the platform's terms of service.
Valve added random skin rewards as part of an update to Global Offensive in 2013, believing that players would use these to trade with other players and bolster both the player community and its Steam marketplace. A number of websites were created to bypass monetary restrictions Valve set on the Steam marketplace to aid in high-value trading and allowing users to receive cash value for skins. Some of these sites subsequently added the ability to gamble on the results of professional matches or in games of chance with these skins, which in 2016 was estimated to handle around $5 billion of the virtual goods. These sites, along with Valve and various video game streamers, have come under scrutiny due to ethical and legal questions relating to gambling on sporting matches, underage gambling, undisclosed promotion, and outcome rigging. Evidence of such unethical practices was discovered in June 2016, and led to two formal lawsuits filed against these sites and Valve in the following month. Valve subsequently has taken steps to stop such sites from using Steam's interface for enabling gambling, leading to about half of these sites closing down while driving more of the skin gambling into an underground economy.
''Counter-Strike''
Counter-Strike is series of team-based first-person shooter developed by Valve that debuted in 1999. Players in the game take the role of a terrorist or a counter-terrorist, with each team having a unique goal to complete before they are eliminated by the opposing team or before the timed round is completed. For example, the terrorist team may be required to plant and defend a bomb at a specific site, while the counter-terrorists must eliminate the terrorists before it can be planted, or disarm the bomb once it has been activated.Introduction of skins
The introduction of the Arms Deal update to Counter-Strike: Global Offensive in August 2013 added cosmetic items termed "skins" into the PC versions of the game. The developers had considered other types of customization drops for the game before coming to weapon skins; they had ruled out on player skins, since Global Offensive is a first-person shooter and the player would not see their customization, as well as new weapons, fearing this would imbalance the game. Following the model they used for Team Fortress 2, Valve enabled players to be rewarded with random skin drops as they played matches which would be stored in their user inventory within Steam, Valve's software delivery and storefront client. Limited-time "souvenir" skins could also be earned by watching competitive Global Offensive matches within the game or through a Twitch account linked to a Steam account. Unlike Team Fortress 2, the Global Offensive skins do not have any direct impact on gameplay, only influencing the look of a player's weapon. Skins, unique to specific in-game weapons, are given several qualities, including a rarity that determines how often a player might acquire one by a random in-game drop just by playing the game or as in-game rewards, and an appearance quality related to how worn the gun appeared.These skins were added to try to unify and increase the player size of the community, who were split between Global Offensive, Counter-Strike v1.6, and Counter-Strike: Source. According to Valve's Kyle Davis, the introduction of skins to Global Offensive was to encourage more players for the game by providing them free virtual items simply by playing the game which they could then use as part of the Steam Marketplace to trade with others, boosting the Marketplace's own economy. The Arms Deal update drew an audience back to the game, with a six-fold increase in the average number of players from the previous year about seven months after its release.
Initially, Valve had considered skins that appeared as camouflage would be more desirable to help hide on some maps, but found there was more community interest in bright, colorful skins that made their weapons appear like paintball guns. The addition of skins made the game attractive to expert players, as the skins could be taken as a kind of trophy, showing off to other players how serious of a player they were. Valve's CEO Gabe Newell described the offering of skins as an "investment" that would retain some nominal value well after the player stopped playing the game, though Newell noted Valve had concerns about factors that might fall outside of their control with the feature.
In 2023, Valve released the successor to Global Offensive, Counter-Strike 2. Players' inventories of digital goods were automatically transferred over from CS:GO over to CS2, with the skins recreated in the new game. In the year 2023 alone, it was estimated that Valve earned US$1 billion from the sale of weapons case keys and commission from user-to-user trades in the Steam marketplace.
Value
Because of the rarity and other qualities, certain skins are highly sought after by players. Skins are a form of virtual currency, with some items like special cosmetic knives worth thousands of United States dollars. This virtual currency is further impacted by the game giving out "weapon cases" that contain an unknown randomized skin, which can only be opened by purchasing a key in the in-game store for $2.49. The most common skins that can be obtained have a value far less than the cost of the key, so the player would effectively lose money if they bought a key and found a common skin. Because of this, cases are also part of the virtual currency within Counter-Strike.Global Offensive is not the first video game where players have traded, sold, or bought virtual in-game items, but the ease of accessing and transferring through the Steam Marketplace made it a successful virtual economy. However, with increased monetary values placed on some skins, the Steam Marketplace became infeasible for some. The Steam Marketplace only allows sales up to $1800, with all transactions subject to a 15% fee collected by Valve. Trades and purchases via the Steam Marketplace require players to add funds to their Steam Wallets to purchase skins from others, with those funds being placed in the Wallet of the seller. Valve does not allow these funds to be taken out as real-world money, as it would be require being regulated as a bank. Websites opened up that used the Steamworks application programming interface to link players' inventory to these sites as to manage the trading of Counter-Strike skins while enabling users to spend more and receive money through other online banking/payment sites like PayPal or using digital currency like Bitcoin, and bypass Valve's transaction fee.
Valve introduced an update to CS2 in October 2025 which added the ability for players to trade in five skins of a specific rarity in exchange for a higher rarity skin. This feature quickly diluted the market for the rarer skins since acquiring them had become easier, and within a few days the skins market lost an estimated $2 to $3 billion in value, roughly 28% of the total market.
Esports
The player community for Global Offensive grew quickly following the addition of skins, further enabled by the growth of streaming services like Twitch. Valve promoted features into Global Offensive that made it favorable for professional play, including sponsoring its own tournament. Several teams arose from high-ranking players, creating viewing opportunities during tournaments; this was further enhanced by the ability for viewers to earn "spectator" skins simply by watching these matches. Compared to League of Legends, one of the most-watched eSports in 2013, Global Offensive is considered an easier game for spectators to understand and follow, making it more attractive for viewing audiences. Within a year of the Arms Deal update, Global Offensive has seen a significant turnaround in player counts, and is poised to be a major esport. More than eight million players played Global Offensive by September 2015, and as of 2016, Global Offensive was one of the top five games watched on Twitch, peaking at more than 525,000 concurrent viewers during a championship round. At the start of 2016, Global Offensive was poised to be the largest growing esport that year.Gambling
As esports have grown in viewership, so has the demand for esports gambling. Outside of the United States, several sites arose to allow users to bet with direct cash funds on the result of matches from games like Global Offensive, Dota 2, and League of Legends. Cash gambling on sports, including esports, had been banned in some European countries, and, up through May 2018, in all but four states within the United States under the Professional and Amateur Sports Protection Act of 1992. With the decision in the Supreme Court case Murphy v. National Collegiate Athletic Association that ruled PASPA unconstitutional, states are now free to enable sports gambling, including for esports. American case law has also determined that the use of virtual goods for betting on the outcome of matches is legal and not covered under gambling laws. Companies like Blizzard Entertainment and Riot Games have made strong delineations between virtual currencies and real money to stay within these prior rulings while offering betting on matches within their games using strictly virtual funds.Some of the websites created to help with trading of Global Offensive skins started offering mechanisms for gambling with skins, appearing to avoid the conflation with real-world currency. These originated as sites that allowed players to use skins to bet on esport matches. Players would bet one or more skins from their Steam inventory, which are then moved to an account managed by the gambling site. Upon winning, the player would be given back their skins and a distribution of the skins that the losing players had offered.
Over time, other sites started to expand beyond esports betting and instead offered betting on games of chance. Jackpot-like sites were introduced, where users can put their skins into the pot, which will end in one person winning. The higher total value, the more chance the user would have to win. A few sites reduced the gambling to betting on the result of a single coin flip. Some sites also offered unopened weapon crates for purchase with skins. In combination with the gambling features, players could then trade skins that they had won for their cash value through these sites, or purchase skins with currency to gamble further. The exact timing for the growth of these gambling sites is unclear, but Chris Grove, an analyst for Eilers & Krejcik Gaming and Narus Advisors, observed as early as August 2015 that skins were being used for betting on esports. At that time, the use of skins for gambling on more traditional games of chance was not readily apparent.
These sites have created a type of black market around Global Offensive skins, generally unregulated by Valve. The exact monetary values processed by these skin gambling sites are difficult to measure because of the opaqueness of the ownership. Eilers and Narus estimated that $2.3 billion in skins was used to bet on esports in 2015, $5 billion in 2016, and projected that over $20 billion in skins would be gambled by 2020 if the market was left unchecked. Of the $5 billion in skins during 2016, Eilers and Narus estimated that only $2 billion were used for esport betting, while the rest was used on traditional games of chance. Some individuals are estimated to have a cumulative worth of tens of millions of dollars of skins in their inventories. The effect of Global Offensive gambling is estimated by Esports Betting Report as an "eight figure" number that feeds the overall area of professional esports as the result of viewership and promotions related to the skin gambling.
Several factors led to concerns about the Global Offensive skins market and gambling. The skin gambling mechanisms work toward those predisposed to gambling because of the ready availability of, and ability to acquire, skins within the game, and can yield great rewards, according to UCLA's co-director of gambling studies, Timothy Wayne Fong. This is particularly true for younger players, who constitute a substantial portion of the Global Offensive player base, and who may also be encouraged through peer pressure to obtain unique skins to show off to their friends. According to a 2022 study, for young people aged 12-17, participating in esports activities was associated with engagement in esports betting. After controlling for recent monetary gambling, recent esports gamblers were over three times more likely to meet criteria for at-risk/problem gambling.
With the pressure applied to skin-gambling websites in 2016, some have moved to use skins as part of a cryptocurrency called "Skincoin", which was launched in June 2017. Skincoin, backed by Ethereum, allows users on the gambling websites to trade skins for Skincoin, which then can be used for gambling or purchasing skins. Other sites arose in 2017 that would allow users to obtain skins for doing "free" tasks, such as watching ads or advertising these sites through other games. These free skin sites do not have gambling aspects in order that they may appear legal, but users can subsequently take these skins into other gambling sites.
Due to more attention to issues like skin gambling and loot boxes coming under governmental regulations, the market activity of skin trading and gambling weakened by 2020. In 2023, Valve announced it would be releasing Counter-Strike 2, which led to newfound activity in the skin gambling market. One gun skin sold for more than $400,000 in April 2023.