2,602 days on and esports betting has barely moved an inch
A first look at how.... not very much has changed.
T’was the 18th May, 2016.
An air of excitement whistled through the streets of London as a diverse crowd of approx. 104 blokes and 2 ladies rocked up to the Royal Garden Hotel for Bullet Business’ inaugural ‘eSports Betting Summit’.
The first dedicated conference to esports betting, and there was certainly a keen sense of intrigue.
Although I do believe that colour photography had been invented by then, I’ll contextualise how long ago it was in esports betting terms:
Sportradar vs Genius Sports, esports first data battle was starting to heat up
What was once the Maurer vs Watson battle has evolved into a potential Royal Rumble of data warriors
Sam Cooke was a week off launching Esports Insider
“The team is being headed up SBC’s Sam Cooke, who alongside others will be supported by Oliver Ring, a freelance journalist who has written extensively for Redbull, and Michael Moriarty who is an expert on the CS:GO scene”.
William Hill had not yet trialled RTSMunity’s in-play Dota product which would eventually put the tier one operator off the scene for life
20/1 on Virtus.pro in-play when they should have been 1/3 due to the inflated early game of Alchemist, you see. Hills probably lost ~£500 and decided that was enough exposure to esports. But the RTS algorithm had cracked it.
Ian Smith was a one man army, building integrity “highways for cars that don’t exist yet”
Turns out there’s now a massive fucking traffic jam and he could do with a hand.
Becky Leggero, David Sargent and Scott Longley all were there.
Generally speaking they all look exactly the same bar a few less or different coloured hairs.
But Ollie, why do you reminisce so? What has spurred such a substack?
Well, before I chronicle the entire history of esports betting in a cracking book, I realised that despite it being 2,602 days since the first dedicated esports betting conference, not a whole lot has changed.
It’s frankly quite alarming.
What were the key topics back then?
Skin betting
The product
Official vs Unofficial data
Operator approach to esports
How far will the ‘first bookmaker in esports’ line take Pinnacle in market share with £0 marketing spend?
What would I say the key topics are now?
Skin betting
The lack of product development
The never-ending data war
How after 2,602 days, operators continue to negligently approach a key vertical for low CPA and ever-growing ARPU user
Worse ways to spend £50m than Entain’s acquisition of Unikrn
The Substack series
Do not worry, young one. Each topic shall have a dedicated, honest assessment of where we once were and where we are now.
But, I can’t resist sharing this latest gem from Entain on their Unikrn social media.
Here’s how I reckon it went down:
“We’re called Unikrn, and we need to educate younger people about how to bet” - Unikrn
“We’ll call it #Betting101, we’ll use that iPhone generated Unicorn thing and patronise an entire audience by telling them that.. Chance plays a factor in a bet” - Marketing agency
“Bloody brilliant! How many times do I need to win a coinflip to make back £50m?” - Entain
Skin betting’s back! (It never left)
Things you love to see: Valve, almost out of nowhere, has banished $2 million in skins to the ether, namely linked to gambling sites.
Skin betting is a weird old world. If we once again take a saunter down memory lane, the keynote speech that raised eyebrows was Rahul Sood, former CEO of Unikrn, giving a rousing speech revealing his horror in finding his 13 year old son gambling skins worth hundreds of dollars, all at the click of a button.
Instead of providing a comprehensive explanation of what skin betting is, how it worked and the basic mechanics I shall instead link to a few very solid resources.
Narus & Chris Grove, Esports Betting Report, Skins In The Game (here)
Narus & Chris Grove, Esports Betting Report, Where’s The Action? (here)
Specific skin scandals (undisclosed ownership from influencers, odd manipulation)
Dot Esports (Callum Leslie), The CS:GO Gambling Scandal explained (here)
Phant0mlord and CS:GO Shuffle (Richard Lewis) (here)
To lift some key statistics - before any action was taken by Valve (Credit: Source 1 above):
A closer look at CS:GO Lounge, the biggest match-betting site at the time:
Between January and July 2016:
103,000,000 skins wagered
2,800 matches wagered on
Over $1 billion in handle value
$9.75 average real world value per item
321,155 skins wagered on a single match (SK Gaming vs Team Liquid)
18.3 million skins wagered across just four tournaments
Pre-Valve cease and desists, an estimated $7.4 billion handle for 2016
Valve, under serious community pressure and uproar from various stakeholders ordered certain websites to stop trading - claiming breaches of commercial agreement and abuse of the Steam API.
Valve Corporation issued two cease and desist letters around 21st July 2016 ordering 42 skin betting sites to cease operations.
What the C&D orders did was alleviate pressure on the game developer, which was seen to be taking action under regulatory scrutiny and public pressure. By August 13th, the breakdown was as follows (per Will Green’s scorecard):
20 sites shut down
9 sites completely flouted the order
9 sites ‘temporarily shut down’ while transitioning to a ‘compliant product’
4 sites operating but ‘undergoing service disruptions’
More specific scandals (referenced above, sources 3 and 4) included large streamers owning their own gambling sites, not disclosing to their audience, and gambling with unlimited house money. James ‘PhantomL0rd’ Varga, for example, was also found to have asked his web developer to adjust ‘percentages’ of the websites jackpots, and guarantee him wins.
Where are we now?
If anyone told you that skin betting was eradicated, they would of course be lying.
Valve made a series of changes to the terms of service around skin trading that majorly inconvenienced those operating third party skin markets, and trading in large volumes of skins.
When there’s a will, there’s a way, however - and skin betting has been ticking away in the background.
We’ve seen Twitch shitstorms with streamers playing slots for millions so skin gambling is nowhere near the size it once was. Still, it’s not uncommon to hop into the CS:GO channel and find several streamers simply opening chests with keys to try and unlock the most expensive and elusive skins in the game.
The most expensive skin in CS:GO history sold for $400,000 this year.
Valve introduce gambling specific language into terms and conditions
On May 10, 2023, Twitter user xMercy_CS pointed out that VAlve’s updated terms and conditions for use of the Steam API explicitly mentioned gambling for the first time.
Steam Online Conduct now reads, under “you shall not do, or attempt to do, any of the following on Steam:”
Engage in commercial activity
Examples of such prohibited behavior include: posting advertisements; running contests; gambling; buying or selling Steam accounts; selling content; gift cards, or other items; and begging.
I would struggle to find anyone that can thus justify skin betting being permitted by Steam and thus be shocked should they engage with gambling sites and subsequently lose their skins. Valve, like Twitch, have also become a quasi-regulator in the gambling space.
What’s the current drama?
Valve decided to withdraw their mighty ban hammer and thrust it right through the core of the skin betting community this week. $2 million in skins are now no longer there. It’s almost like a crypto rug-pull except the good guys are the ones that win here. If tweets are to be believed, it’s closer to $6 million (104 traders).
The current landscape involves one rather yappy brand, CS:GO Empire and another - CS:GORoll.
Twitter account Variance Warren is like that Spurs fan with Eric Dier as his profile picture that dedicates their entire Twitter feed to Arsenal.
It’s tweet after tweet abusing CSGO: Roll, including taking credit for leaking a list of traders that seemingly (according to aforementioned Dexerto article) got banned (prior to the ban).
The day after, another ban wave went out (increasing value from $2 million to $6 million) and guess what? A load of CSGO Empire traders vanished into the ether.
TL:DR - Valve seems to have a good handle on ridding the world of skin betting, and a potentially more toxic intertwinement with crypto.
CSGO Empire are a funny bunch. They hold a Curacao license, so include the basic terminology and geo blocking around relevant jurisdictions.
CSGO Roll has had trouble with Aussie authorities, as it was not geo blocking. It claims to not be a casino, and has an even more laissez-faire attitude to the predatory skin betting practice than any other competitor.
Empire claims to be the ‘casino to go with’ due to a Curacao licence, although KYC is nascent, consumer protection is non-existent - and barring a few geo blocks and blowing their own trumpets on Twitter, they’re just the same as the next guy.
For once let me say: Well played Valve. We needn’t return to the dark past of rife skin betting.
Bonus CSGO Roll disstrack:
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