The Washington State Gambling Commission has sent Valve a cease and desist letter ordering the publisher to stop allowing in-game skins to be transferred for gambling purposes.

The commission — which has jurisdiction over Valve, as the company is based in Bellevue, Washington — has given Valve until Oct. 14 to respond to the cease-and-desist or risk civil or criminal action.

"In Washington, and everywhere else in the United States, skins betting on esports remains a large, unregulated black market for gambling," Washington state gambling commissioner Chris Stearns said in a widely distributed press release. "And that carries great risk for the players who remain wholly unprotected in an unregulated environment."

Stearns said the commission was concerned that skin gambling presented a risk of underage gambling, "which is especially heightened in the esports world."

"It is our sincere hope that Valve will not only comply but also take proactive steps to work with the Commission on future measures that will benefit the public and protect consumers," he said.

Valve took action to curb third-party gambling with CS:GO and Dota 2 skins in July, in the wake of widespread media attention to skin gambling. The company sent shutdown notices to 23 CS:GO skin gambling websites, including CS:GO Lounge, CS:GO Double and CS:GO Diamonds. Valve said in its letter that the sites were misusing its Steam API by creating automated accounts that transferred skins for gambling purposes.

Many of the sites shut down operations shortly after receiving Valve's notice, and the majority remain inactive. One notable exception is CS:GO Lounge, which has resumed esports betting operations with coins rather than skins. Cash-betting sites like Unikrn and GosuBet, which cater to audiences in regions where online gambling is legal and regulated, were not affected by Valve's notices.

It's not clear whether Valve has already done enough to comply with the commission's order, or if they will need to take further action. In its press release, the commission says that it "expects Valve to take whatever actions are necessary to stop third party websites from using 'skins' for gambling through its Steam Platform system, including preventing these sites from using their accounts and 'bots' to facilitate gambling transactions."

The issue of unregulated skin gambling came to a head earlier this year after several well-publicized incidents, including allegations that popular gaming YouTubers were covertly involved in promoting CS:GO skin gambling sites, and a class-action lawsuit filed against Valve on June 23 that alleged the company knowingly supported gambling activity. (Valve later claimed that it did not take a cut of skins transferred using its API, and had not earned any revenue from skin gambling.)

Daniel Rosen is a news editor for theScore esports. You can follow him on Twitter.