Earlier this month the Washington State Gambling Commission contacted Valve and asked them to put a stop to all gambling done through Steam's services. Valve just replied, and said no.
In a lengthy letter to the commission, which was also sent to Tech Raptor, Valve said they were disappointed” that the commission decided to make the issue public, after the two had been having conversations about the matter for months. They also refuted claims that they facilitate gambling and were clear that both Steam and CS:GO operate under state law. All of that was just in the first paragraph.
The TL;DR version of the letter is that Valve claims it isn't doing anything wrong, and that the commission can't pin any criminal charges on the company. Valve also questions what the commission wants them to do exactly, although does say that the company is happy to work with them to find a solution.
The Commission's letter publicly threatens Valve with criminal prosecution for gambling on third party sites,” reads Valve's letter. We do not understand the legal or factual reasoning supporting this position, from the Commission's letter or from our conversations with the Commission. We are also unsure of how you propose we do this. If there is a specific criminal statute or regulation you beleive Valve is violating please provide a citation. We are not aware of any such law that Steam or our games are violating.”
"We do not want to turn off the Steam services, described above, that skin gambling sites have taken advantage of,” continues the letter. In-game items, Steam trading, and OpenID have substantial benefits for Steam customers and Steam game-making partners. We do not believe it is the Commission's intention, nor is it within the Commission's authority, to turn off lawful commercial and communication services that are not directed to gambling in Washington.”