Valve is finally addressing the last week's Counter-Strike gambling scandal. The game maker and Steam operator says that it does not directly profit from these gambling sites' actions. In a statement, Valve's Erik Johnson said the following: We have no business relationships with any of these sites. We have never received any revenue from them. And Steam does not have a system for turning in-game items into real world currency. Johnson added that gambling sites work by creating and maintaining their own Steam accounts, which are used to conduct virtual item trading. He adds:Using the OpenID API and making the same web calls as Steam users to run a gambling business is not allowed by our API nor our user agreements.Steam's user agreement includes a passage that forbids "exploiting the Content and Services or any of its parts for any commercial purpose, except as expressly permitted elsewhere in this Agreement." The company won't block these websites, but says it will begin cracking down on them -- by sending them cease and desist notices.

Tom Phillips, reporting for EuroGamer: Steam has begun warning users not to use a high-profile Counter-Strike: GO gambling website after its ownership turned out to be two YouTube stars -- who were also using YouTube to promote the site. Trevor "TmarTn" Martin and Tom "Syndicate" Cassell are listed in newly-uncovered business records as the president and vice-president, respectively, of online gambling site CS:GO Lotto. The news of CS:GO Lotto's ownership came as a surprise to viewers who have watched the pair promote the site on their channels, where both YouTube stars can be seen gambling -- and winning big money -- while using it. Neither had publicly disclosed their full roles in the site. TmarTn had not even disclosed his videos as being promotional tools. Attempt to log in to CS:GO Lotto now and you are greeted with the following warning message: "The URL you are attempting to log in to has been blocked by our moderators and staff. This site may be engaged in phishing, scamming, spamming, or delivering malware."

An anonymous reader writes from a report via Bloomberg: Valve's Counterstrike: Global Offensive game is being sued for its role in the multibillion-dollar gambling economy that has fueled the game's popularity. Michael John McLeod filed a lawsuit Thursday in the U.S. District Court in Connecticut alleging that Valve violated gambling laws and engaged in racketeering with a handful of off-shore gambling companies. McLeod, who has been gambling on CS:GO since 2014, is asking for class-action status for the suit. The suit was first reported by Polygon and doesn't give a specific request for damages, nor does it say how much money he lost by betting on the site. According to Bloomberg: "Valve provided for money, technical support, and advice to such websites as CSGO Lounge and Diamonds, which take bets, and OPSkins, which runs a market where virtual goods are traded and can be redeemed for cash." Valve has yet to respond to the suit.

New submitter rotoblobule writes that in order to help Quebec's lottery service fight against illegal gaming sites, "the Quebec government is currently passing bill 74, which will impose mandatory banning by internet providers of a list of online gaming sites." Here's stories about the pending legislation in French and English, and a relevant excerpt from the bill itself: "To monitor online gambling, the Consumer Protection Act is amended to require Internet service providers to block access to illegal gambling sites entered on a list drawn up by the Societe des loteries du Quebec, which must report...if service providers fail to comply with the Act."

New submitter mdnuclear writes: In a strange echo of the depressed oil economy SolarCity recently announced a layoff of a quarter of its workforce as the apparent result of the Nevada PUC's decision to phase solar net-metering customers down from retail to wholesale per kWh. A scathing editorial in the WSJ last December took both solar leasing companies and their financial underwriters to task, calling net metering a "regressive political income redistribution in support of a putatively progressive cause."

Wednesday the PUC fronted a possible compromise, 'grandfathering' existing net metering customers to their current rates to create a third caste of energy consumers, those who had been in the right place at the right time — for awhile. One who had paid $22k into solar lamented, "I'm not happy; my wife isn't happy, we could have done something else with that money." Like many who leave Vegas, perhaps they should have. But this begs the real question... are net-metering schemes ultimately 'right' or 'wrong' for the grid?

An anonymous reader sends the latest update on Eddie Tipton, the man who worked for the Multi-State Lottery Association who was convicted of rigging a lottery game so he could win a $14 million jackpot. BGR reports: "Not too long ago, Eddie Tipton was convicted of hacking into the Multi-State Lottery Association's computer system in order to rig a nearly $17 million jackpot in Iowa. Now comes word that an investigation into Tipton's hacking activities is expanding to include a number of other states. Thus far, lottery officials from Colorado, Wisconsin and Oklahoma have indicated that Tipton may have also gamed lottery jackpots in their respective states. What makes this saga all the more interesting is that Tipton actually used to work at the Multi-State Lottery Association as a security director. In that capacity, Tipton allegedly installed a rootkit onto his company's computer system that influenced the manner in which 'random' numbers were generated. As a result, Tipton was able to calculate and gain access to winning lotto numbers before their public unveiling. With the numbers in tow, authorities claim that Tipton would reveal the winning numbers to friends who would then buy 'winning' lotto tickets and then collect on big paydays."

An anonymous reader writes: The Government of Quebec has introduced new legislation that requires Internet service providers to block access to unlicensed online gambling sites. The provisions are contained in an omnibus bill implementing elements of the government's spring budget, which included a promise to establish website blocking requirements. The bill provides that "an Internet service provider may not give access to an online gambling site whose operation is not authorized under Québec law." The government's lottery commission will establish the list of banned websites.

An anonymous reader writes: Court documents unsealed yesterday tie together cybersecurity breaches at several different banks and financial institutions as being caused by the same group of criminals. "Hackers and conspirators in more than a dozen countries generated hundreds of millions of dollars in illicit proceeds on pump-and-dump stock schemes and particularly lucrative online gambling, prosecutors said. From 2012 to mid-2015, the suspects and their co-conspirators successfully manipulated dozens of publicly traded stocks, sent misleading pitches to clients of banks and brokerages whose e-mail addresses they'd stolen, and profited by using trading accounts set up under fake names, prosecutors said." The attacks were spread across 75 different companies in nations across the globe, and included collusion with corrupt government officials who ignored the problem. U.S. Attorney Preet Bharara said, "By any measure, the data breaches at these firms were breathtaking in scope and in size."

HughPickens.com writes: The NY Times reports that in a major blow to a multibillion-dollar industry that introduced sports betting to legions of young sports fans, the New York State attorney general has ordered the two biggest daily fantasy sports companies, DraftKings and FanDuel, to stop accepting bets from New York residents. He said their games constituted illegal gambling under state law. "It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country," says NY attorney general, Eric T. Schneiderman, "Today we have sent a clear message: not in New York, and not on my watch."

Fantasy sports companies contend that their games are not gambling because they involve more skill than luck, and because they were legally sanctioned by a 2006 federal law that exempted fantasy sports from a prohibition against processing online financial wagering. "Fantasy sports is a game of skill and legal under New York state law," says FanDuel. "This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country." The attorney general's office also said that ads on the two sites "seriously mislead New York citizens about their prospects of winning." State investigators found that to date, "the top 1 percent of DraftKings winners receive the vast majority of the winnings." Schneiderman's investigation was spurred after reports arose that a DraftKings employee used internal data to win $350,000 on rival site FanDuel, which the operators denied. While both companies had allowed employees to place bets on the others site, they have since banned such practices.

sciencehabit writes with this interesting story about using prediction markets to weed out false positives in scientific experiments. From the article: "Gambling is frowned upon in many circles. But what if the gamblers are researchers betting on how each other's experiments will turn out, and the results are used to improve science itself? A group of psychologists has found that their collective gambling—with real money—predicted the outcome of attempts at replicating experimental results better than their own expert guesses. They propose that this type of gambling setup, known as a prediction market, could become part of how science gets done."

szczys writes: The Pari-Mutuel system revolutionized how wagers were made on horse races starting in the late 1800s. It moved away from gambling against the house, and adjusted the odds based on how many people were placing wagers on a particular horse. Calculating and publicly displaying the changing odds was slow and labor intensive until engineers took a crack at the problem. They created Tote Boards; large mechanical computers which connected to each betting window with levers and cables. Each pull of a lever recalculated the odds which were displayed on large mechanical displays for all to see. Tote Boards were built all over the world and used until digital computing displaced them.

HughPickens.com writes: Joe Drape and Jacqueline Williams report at the NYT that a major scandal is erupting in the multibillion-dollar industry of fantasy sports, the online and unregulated business in which an estimated 57 million people participate where players assemble their fantasy teams with real athletes. Two major fantasy sports companies were forced to release statements defending their businesses' integrity after what amounted to allegations of insider trading — that employees were placing bets using information not generally available to the public. "It is absolutely akin to insider trading. It gives that person a distinct edge in a contest," says Daniel Wallach. "It could imperil this nascent industry unless real, immediate and meaningful safeguards are put in place."

In FanDuel's $5 million "NFL Sunday Million" contest this week, DraftKings employee Ethan Haskell placed second and won $350,000 with his lineup that had a mix of big-name players owned by a high number of users. Haskell had access to DraftKings ownership data meaning that he may have seen which NFL players had been selected by DraftKings users, and by how many users. In light of this scandal, DraftKings and FanDuel have, for now, banned their employees from playing on each other's sites. Many in the highly regulated casino industry insist daily fantasy sports leagues are gambling sites and shouldn't be treated any differently than traditional sports betting. This would mean a high amount of regulation. Industry analyst Chris Grove says this may be a watershed moment for a sector that may need the legislation it has resisted in order to prove its legitimacy. "You have information that is valuable and should be tightly restricted," says Grove. "There are people outside of the company that place value on that information. Is there any internal controls? Any audit process? The inability of the industry to produce a clear and compelling answer to these questions to anyone's satisfaction is why it needs to be regulated."

JustAnotherOldGuy writes: Bitcoin Savings & Trust founder Trendon Shavers pleaded guilty to fraud over his company's Ponzi scheme, whose victims believed they would earn one percent interest every three days — an annual rate of 3,641 percent. Shavers used new depositors' money to pay the existing depositors, and skimmed enough cream to pay for a car, a $1000 Vegas steak dinner, and plenty of casino gambling. He cost his depositors about $150M and was holding onto $40.7M in Bitcoin when he was arrested. At his peak, he controlled about 7 percent of all Bitcoins in circulation. He netted $164,758 from the scheme. Under a plea deal, Shavers has agreed not to appeal any sentence at or below 41 months in prison. Sentencing before U.S. District Judge Lewis Kaplan is scheduled for Feb. 3. Shavers, who went by "pirateat40" online, was arrested in November, two months after a federal judge in Texas ordered him to pay $40.7 million in a related U.S. Securities and Exchange Commission civil lawsuit.

szczys writes: You see them all the time in movies and TV shows, but is that what an actual bomb looks like? Probably not... here's what a real bomb looks like. This story stems from a millionaire gone bust from gambling addiction who decided to extort riches back from the casino. He built a bomb and got it into the building, then ransomed the organization for $3 million. The FBI documented the mechanisms in great detail — including the 8 independent trigger systems that made it impossible for them to disarm the thing. The design was so nefarious it's still used today as a training tool.

An anonymous reader writes: Scotland's rural affairs minister has announced the country will ban the growing of genetically modified crops. He said, "I am concerned that allowing GM crops to be grown in Scotland would damage our clean and green brand, thereby gambling with the future of our £14 billion food and drink sector." Many Scottish farmers disapprove of the ban, pointing out that competing farms in nearby England face no such restriction. "The hope was to have open discussion and allow science to show the pros and cons for all of us to understand either the potential benefits or potential downsides. What we have now is that our competitors will get any benefits and we have to try and compete. It is rather naïve."

New submitter ottawan- writes: In order to drive more customers to their own online gambling website, the Quebec government and Loto-Quebec (the provincial organization in charge of gaming and lotteries) are thinking about forcing the province's ISPs to block all other online gambling websites. The list of websites to be blocked will be maintained by Loto-Quebec, and the government believes that the blocking will increase government revenue by up to $27 million (CAD) per year.

A reader writes with this excerpt from Ars Technica about what may be the most movie-worthy real-life crime story of the year so far: Eddie Raymond Tipton, 51, may have inserted a thumbdrive into a highly locked-down computer that's supposed to generate the random numbers used to determine lottery winners, The Des Moines Register reported, citing court documents filed by prosecutors. At the time, Tipton was the information security director of the Multi-State Lottery Association, and he was later videotaped purchasing a Hot Lotto ticket that went on to fetch the winning $14.3 million payout.

In court documents filed last week, prosecutors said there is evidence to support the theory Tipton used his privileged position inside the lottery association to enter a locked room that housed the random number generating computers and
infect them with software that allowed him to control the winning numbers. The room was enclosed in glass, could only be entered by two people at a time, and was monitored by a video camera. To prevent outside attacks, the computers aren't connected to the Internet. Prosecutors said Tipton entered the so-called draw room on November 20, 2010, ostensibly to change the time on the computers. The cameras on that date recorded only one second per minute rather than running continuously like normal.

"Four of the five individuals who have access to control the camera's settings will testify they did not change the cameras' recording instructions," prosecutors wrote. "The fifth person is defendant. It is a reasonable deduction to infer that defendant tampered with the camera equipment to have an opportunity to insert a thumbdrive into the RNG tower without detection."

An anonymous reader writes: Michael Geist reports that the Government of Quebec released its budget (PDF) yesterday featuring two Internet-related measures that are sure to attract attention and possible litigation. First, it is moving forward with plans to study a new tax on residential Internet services in order to provide support for the cultural sector. Second, the government says it will be introducing a new law requiring ISPs to block access to online gambling sites. The list of blocked sites will be developed by Loto-Quebec, a government agency. The government views this as a revenue enhancing measure because it wants to channel gamblers to its own Espacejeux, the government's own online gaming site.

Las Vegas seems an appropriate place for cryptocurrency businesses to emerge, both because the coins themselves are so volatile that some gambling instinct may be required, and because Vegas is a high-tech outpost with lower taxes and lower rents than many other West Coast hot-spots, well-suited to risky startups with ambition but without huge venture backing.Jim Blasko moved there to work on low-voltage engineering for Penn & Teller, and is a qualified Crestron programmer, too (useful in a town that looks from the air like one giant light-show), but has shifted to a quite different endeavor, or rather a complex of them — all related to cryptocurrency. I ran into Blasko during this month's CES, at a forum with several other cryptocoin startups, and the next day we met to talk about just how hard (or easy) it is to get into this world as an entrepreneur.

Blasko has some advice for anyone who'd like to try minting a new cryptocurrency. Making your own coin, he says, is the easy part: anyone can clone code from an existing entrant, like Bitcoin, and rename the result — and that's exactly what he did. The hard work is what comes after: making worthwhile changes, building trust, and making it tradeable. Blasko's done the legwork to get his own currency, which he's bravely called "Unbreakable Coin," listed on exchanges like Cryptsy, and is working on his own auction site as well. He's also got an interesting idea for cryptocoin trading cards, and had a few prototypes on hand. (Part 1 is below; Part 2 to follow.) Alternate Video Link

mrspoonsi writes Russia has listed transsexual and transgender people among those who will no longer qualify for driving licenses. Fetishism, exhibitionism and voyeurism are also included as "mental disorders" now barring people from driving. The government says it is tightening medical controls for drivers because Russia has too many road accidents. "Pathological" gambling and compulsive stealing are also on the list. Russian psychiatrists and human rights lawyers have condemned the move. The announcement follows international complaints about Russian harassment of gay-rights activists.