As one of the fastest growing categories in online gambling, eSports betting is set to reach $8 billion by the end of this year. According to a report by Eilers & Krejcik Gaming, this equates to more than $560 million in revenue at an industry average margin of 7%. In the coming years, it is estimated that the value of annual wagers could eventually go up to a whopping $16 billion.
The beginning of this explosion can be traced back to when players of the popular game Counter-Strike: Global Offensive started what’s today known as “skin betting” – the buying and selling of data that can change the appearance of players’ weapons. Its developers Valve sold one-of-a-kind skins, which immediately became a hit with its players – so much so that they started trading and gambling with skins and real currency online.
Since Valve didn’t intend for it to escalate this far, nor did they have the license for the transactions that were happening, they had to deal with a lawsuit in 2016. This eventually pushed the company to distance itself from skin betting websites and close its doors on the biggest revenue stream affiliated with the game. And while Valve continues to face legal issues, the rest of the eSports industry seems dead-set on dominating online gambling.
In order to avoid the aforementioned problems, today’s biggest eSports betting companies are regulated and monitored similar to how traditional sports organizes its gambling pools.
Live Sports vs. eSports
While watching an eSports tournament is very different from the experience of watching a live sports event, the ways in which people bet are very similar. An article on eSports betting by Sandlot Games, discusses how Money Line is the most popular form of betting in the industry, as bettors simply choose which team is most likely to win the tournament, much in the same way they would with any other sports competition. An eSports team can also be tracked in the same way as a regular professional sports team – through examining their players’ records, numbers, and playing styles.
Similar to how traditional sports have institutions regulating their bets, eSports has its own governing bodies as well. Unikrn is an eSports betting and news media company that covers everything from betting, popular video games, to online casinos. It was established in 2014 by Rahul Sood and Karl Flores, licensed and regulated by the Isle of Man, home to the Gambling Supervision Commission. While betting on worldwide competitions is its main selling point, Unikrn also allows its users to bet on private matches (between them and friends). It also allows wagers on factors like kill counts, deaths, survival times, and team scores – virtually every aspect of the game.
As the popularity of games such as League of Legends and Dota 2 grew, more money poured into the industry, creating huge opportunities for eSports betting to rise. The highest eSports payout ever recorded was Valve’s 2018 Dota 2 world championships, otherwise known as The International. Its prize pool ended up reaching $25.5 million in total, which allowed the winning team OG to take home a whopping $11.2 million.
On a much smaller scale, efforts such as streaming have turned casual gamers into money-making competitors who earn an average monthly salary of $1,000 to $5,000.
Combined, these developments have allowed hardcore gamers to stake their claim as professional e-athletes who can earn significant paychecks through their skills and knowledge of the game. There’s no doubt that eSports betting – and the world of competitive, organized video gaming itself – will continue to make billions in the future. Not bad for a bunch of geeks.