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Asking valve to police this is like asking the national Treasury to police gambling.
The fact that skins can be traded is a good thing. Just needs actual laws and enforcement.
Not allowing gambling on skins is such a knee jerk reaction to this. As you see there's sites that do the same thing with irl items.
I would like to see the comparison to real sports more heavily highlighted. You cannot find a single sports event in America that's not sponsored by gambling sites.
What are the downsides to banning it for us?
Basically, the same systems that allow Skin gambling also allow for trading and 3rd party marketplaces. You can't just disable one without disabling the other. They could ban it on paper but enforcing those bans technically will likely just lead to users/victums lossing more as casinos would be unable to payout owed earnings.
That leaves legal enforcement, but Valve isn't a government body - they don't have the authority to investigate these casinos, and have limitted ability to enforce the law. They're effectively manufacturing poker chips and releasing them into an open market where they don't have authority (nor should they). Instead, illegal casinos should be investigated and prosecuted by the government - its supposed to be their responsiblity to handle exactly this sort of thing. They have the ability to seize casino property to investigate them or collect information, and the ability to fine them and enforce fines, unlike Valve which can do neither. As even noted in the video, the have sent cease and desist letters in the past, but casinos can changed names, changed owners, ect. and nothing changed.
Edit: For clairity, free trading is what allows these sites to work. Valve will disable account's ability to trade in some cases such as where their services are directly abused on-platform, but they don't have access to trade negotiations and things obviously get messy when it comes to trying to mediate bad or unfair deals (such as the case with these casinos.) That means Valve has four options to tackle this:
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Do nothing.
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Send cease and desist notices to the casinos and/or persue legal action where possible. This leads to individual casinos closing and then a new one is immediately re-opened to take its place as there isn't any cost to then.
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Disable the accounts of these casinos. The problem is that this effectively freezes their cashflow both in and out. Anyone waiting on a cash-out effectively immediatly loses everything, and given the long transaction times and sizes of these casinos, this will likely hurt a lot of victims. At the same time, while they lose some of their assets, casinos can still walk away with a lot of their current profits. This just turns it into a game of whack a mole, where casios pop up, make a small fortune, then get banned and effectivly rugpull their userbase.
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Disable trading and possibly marketplace, which sucks for regular users and means all sales much go through Valve storefront with no room for competition or price negotiation. No more giving friends spare skins, and no more bypassing Valve's 5% royalty fee on sales. This also has the same issue as #3.
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Disabling trading items is a bad call. Look at epic and rocket league. The game was already dying and removing trading was a massive fuck you to a huge section of the player base.
I never said that they should disable trading. Just that they should go after gambling sites and introduce things that would make it harder to gamble.
Introduce what things? How do you propose they stop gambling without removing trading?
They could try doing something. I dunno maybe trading limits and/or time-outs combined with DMCA takedowns.
Maybe the cost of setting up casinos isn't very high but it takes time to build up trust from consumers and get customers.
If they can shutdown the biggest casinos that are sponsoring YouTubers and competitions that's at least a decent win.
They already do this. Skins have trade restrictions in the form of time delays after specific actions. Valve also clamped down on the features of their trading API.
The bad news is that it's not an easy problem to solve and not solely in Valve's hands. But to say Valve has done nothing is straight up false. Have they done enough? Debatable, but there's no easy solutions.
Why? I think the only thing that is bad with the practice is involvement with kids. Enforce age limits within the gambling sites, and really that's up to the FTC and gaming commissions.
You'll have a hard time finding a jurisdiction where minors gambling (even behind the veil of "we don't check who our customers are") is legal. The "IRL item gambling" site in the video was in fact blatantly illegal in Denmark despite the lengths to which they went to pretend "it's not gambling because the house always loses".
Asking Valve to police gambling is the next best thing to do if governments won't step in. You say it like it's an impossibility, ignoring the fact that "state-run gambling" is quite a common setup. In France for instance all money games are run by la française des jeux, a state-owned monopoly whose profits are meant to go to charity. In the US it wouldn't be a crazy idea either, given how many US states already have state-run monopolies for alcohol sales for example. It's not like historical precedent is lacking to show that regulating a parasitic industry is possible...
Maybe you can find examples of other industries that are heavily infected with gambling bullshit, but that's whataboutism and in no way relevant to the discussion.
How could valve stop this without making items untradable?
Cease&desist every casino would be a good first step. Casinos are well outside the original intended purpose and if the ToS don't prohibit their existence that can easily be changed. Valve doesn't owe anyone the right to gamble their items, especially not with the weird third party escrow system that casinos use IIRC.
But if we're touching on the subject then we need to reopen the contentious subject of the lootboxes themselves, which are gambling. Which Valve (and the video game industry) has an enormous stake in. To fix that whole mess, I expect a government crackdown will be required.
I don't think it's an unreasonable ask either, but from what I understand, Valve is incredibly libertarian, like more than the libertarian party libertarian. Their politics and policies are freedom freedom freedom, and any form of regulation is sheer anathema to them.