Another battle over the alleged illegality of skins betting is brewing… alleging the activity is allowing online gambling in Washington state. The Quinault Indian Nation has sued Valve Software, the owner and developer of Counter-Strike: Global Offensive, one of the most prominent games offering skins-based “gambling” activity as a way to generate corporate revenue.

Despite the actual skins-based trading technically taking place on third-party sites, the lawsuit brought by the Quinault Nation asserts that Valve intentionally fostered and continues to benefit from an illegal-gambling environment aimed at consumers of all ages. Though skins trading often receives public and legal heat for its frequent targeting of underage players — and that receives play within the lawsuit — the Quinault claim is that the entirety of Valve’s activity consists of “unfair competition” that violates Washington’s gambling codes and, by extension, deprives the Quinault nation of gambling revenue agreed to under its compact with the state.

The action was filed about a week ago in Grays County, Washington, in the Superior Court for the State of Washington and has just started to receive public exposure. The Quinault nation operates the Quinault Beach Resort & Casino in Grays County. The lawsuit is the latest of several legal actions originating in Washington that target various forms of online gaming and/or online gambling, continuing in some sense a tradition dating all the way back to 2006, when a tribal-driven legislative effort made the playing of online poker in the state a Class C felony.

More on the skins betting lawsuit at Flush Draw.