New York State has filed a lawsuit against video game developer Valve Corporation, accusing the company of illegally promoting gambling through "loot boxes" in some of its most popular titles.

New York Attorney General Letitia James filed the suit on Wednesday (February 25) in New York state court, according to the Associated Press. The lawsuit targets loot box mechanics in Counter-Strike 2, Team Fortress 2, and Dota 2 — three games published by the Bellevue, Washington-based company.

Loot boxes are virtual containers that players purchase for a chance to win rare in-game items, such as character cosmetics or weapon skins. James' office says the practice amounts to illegal gambling under New York's constitution and penal law.

"Valve has made billions of dollars by letting children and adults alike illegally gamble for the chance to win valuable virtual prizes," James said in a statement. "These features are addictive, harmful, and illegal."

In Counter-Strike 2, the loot box mechanic closely resembles a slot machine, featuring an animated spinning wheel that lands on a selected item. As reported by GamesIndustry.biz, the lawsuit describes the design as similar to what casino games "use to entice players to spend money in the hopes of winning something valuable."

While loot box items are mostly cosmetic and don't affect gameplay, they can hold enormous real-world value. Some of the rarest items sell online for thousands of dollars. One Counter-Strike AK-47 weapon skin recently fetched more than $1 million.

James' office also raised concerns about the impact on younger players. The suit argues that research shows children introduced to gambling are four times more likely to develop a gambling problem later in life. "Loot boxes, like other forms of gambling, can lead to addiction and result in real harm," the complaint reads.

The attorney general's office also noted that demand for high-value loot box items has attracted online speculators, investors, and even thieves targeting third-party marketplaces where virtual items can be sold for cash. Valve operates its own marketplace, the Steam Community Market, in addition to facilitating those outside platforms.

The lawsuit asks the court to permanently stop Valve from offering loot boxes in its games. It also seeks restitution and damages for users, as well as a fine equal to three times the company's profits from the feature. Valve had not commented publicly as of Wednesday.

Elvis Duran