Betting on sports and games, around the world, has been a part of life for our entire history – it’s probably the European roots; after all, the British are massive gamblers and the French practically invented casino games!
Now, however, we are coming into a new era of sports betting, where betting on a ncaa tournament is becoming a lot more popular and acceptable. These days, tens of millions of dollars are being wagered around the world not on the outcome of a football game or the points of a hockey match, but on people playing video games. In fact, you don’t even need to have been living under a rock to know this – esports is going mainstream.
Esports: bigger than ever
Esports, short for electronic sports, essentially refers to competitive video games. In the 2000s, the esports industry began to boom in South Korea. Ever since esports was introduced in the world, it became one of the biggest thing that rocks the world of gamers around the world. Initially it was niche globally, with many nudges and sniggers from the western world: “can you believe that a video game [StarCraft] fills stadiums in Korea?”
However, StarCraft soon began to receive global attention and in the past decade, several games have exploded in popularity around the world. Counter-Strike: Global Offensive (CS:GO), League of Legends and Dota 2 are the “big three” of the esports world. Indeed, The International, essentially the world championship of Dota 2, boasted a prize pool of more than $18 million in 2016.
The ever-growing popularity of these games coincided with the rise of video streaming sites such as Twitch.tv, allowing the sports to have their own stars and celebrities just like professional athletics. In 2000, there were fewer than a dozen major esports tournaments worldwide; in 2010 there were over 200.
Esports and gambling: a huge industry
The size of the esports market, which made over $500 million in 2016 and reached a global audience of over 200 million, means it is unsurprising that betting on the outcome of esports competitions and matches is now so popular.
Today, online gambling in Canada and around the world (with the exception of our neighbours to the south) is bigger than ever. The increase in online security and banking methods, plus computing power and software, means that gambling online is now just as normal as playing at your favourite local casino (even on mobile too!) It is another testament to our modern age that betting on “electronic sports” is also becoming as normal as betting on live sport.
The world of esports betting has been called “an emerging giant” by some, with the United Kingdom Gambling Commission (the regulatory body of gambling in the UK, one of the world’s largest gaming markets) acknowledging the “growing market in esports and computer gaming” in its 2016 annual report.
The industry of esports betting is predicted to be worth over $10 billion before 2020, according to Eilers and Krejcik Gaming. The UK has even taken the step of creating the British Esports Association, a governing body for esports that will work closely with the UKGC.
The “skin gambling” controversy
In recent years, esports gambling became the centre of a huge controversy thanks to what is called “skin gambling” – an unregulated gambling market worth over $7 billion.
Skin gambling refers to the use of virtual items as currency. Often these in-game items are purely aesthetic, but their rarity and prestige makes many of them worth hundreds or even thousands of dollars. Valve, who developed the popular esport Counter-Strike: Global Offensive, also runs the Steam Marketplace on which skins are traded.
The problem was that the Steam Marketplace could be interfaced by third-party software, enabling the buying and selling of skins. This created a multi-billion dollar unregulated online casino market in which people would wager skins in place of currency.
In August 2016, Valve issued a cease and desist warning to skin gambling sites, after several people filed a class-action lawsuit against the developers. The lawsuit claimed that Valve did not do enough to protect vulnerable people and children from this gambling market. The skin gambling market has since imploded.
The future of esports betting
It has become exceedingly clear that the world of esports betting is here to stay, just as the world of betting on live sports such as soccer, hockey and football is a part of our day-to-day life.
Unlike other boom and bust industries such as online poker, which is experiencing a continued global decline, the world of esports seems to have nowhere to go but up. The industry is as huge as it has ever been, and the world of esports betting is rising meteorically with it.
Most major online sportsbooks have a dedicated esports page with betting markets on CS:GO, League of Legends, Dota 2, StarCraft, Hearthstone, Overwatch and any other major competitive video game you could name. We are witnessing the birth of an all-new industry that is certainly going to last.