The answer for game publishers isn't to ignore esports betting
Esports Betting Report

The Rise And Fall Of Skin Betting Can Teach The Esports Industry Something

Esports betting lessons

The esports betting industry should recognize the creativity and innovation involved in unregulated skin betting and attempt to capture this organic enthusiasm. That’s according to panelists at the European eSports Conference held in London last week.

Don’t dismiss creativity by third-party esports sites

Skin betting hit the headlines last year when Valve, the publisher of Counter Strike: Global Offensive (CS:GO), issued cease-and-desist letters to third-party sites offering unregulated wagering on the game.

The letters had a chilling effect on the operators of these sites. But James Watson, head of esports at sports data and integrity provider Sportradar, warned against dismissing the creativity displayed by the third-party sites involved in unregulated activity.

“Esports, as an ecosystem, is generally very, very creative,” he said. “Some of the skin betting opportunities were actually quite clever ideas, in concept.”

He noted that if game publishers attempted to simply ignore the gambling already taking place on the games, it would only mean trouble for the future.

If you just let the market develop ‘organically’ like this and let it do its own thing, the market is creative and they will develop things but unfortunately they won’t be able to cover off all eventualities,” he added. They will create problems as well.”

Skin betting got everyone by surpsise

The rise of skin-betting caught many within the esports industry off-guard. That’s according to Adam Savinson, head of esports at the online gambling operator Betway.

“It was esports fans coming together and creating something rather than taking something that already existed and building on it,” he told the audience. “The way that odds were shown on skin-betting websites were very different to traditional bookies because it was created by them and they didn’t have anything to base it off.”

However, the panel agreed the bookmakers are not too far behind in terms of innovation in their offerings.

“If you compare the esports offerings a year ago to now, for instance, it is so far ahead in terms of quality,” Savinson said.

Watson noted that Sportradar’s relatively new round-by-round betting on CS:GO was now the second most popular bet after the match result.

In-play betting and esports?

Much of the debate in the past year has been about the degree to which in-play betting – a mainstay of traditional sports betting – can makes its way into esports. Sportradar has teamed up with first ESL — and latterly DOJO Madness — to provide exclusive game data. Just last week Genius Sports similarly signed a deal with games platform provider FaceIt, which also runs the eSports Championships Series (ECS).

Watson said one of the key reasons behind the deals it has done is to limit the degree of latency involved in current streams.

Betting companies take it for granted that traditional sports data is in real-time with a very minimal delay,” he said. “But in esports that isn’t really the case. You have ‘live’ matches where the broadcasts are delayed by tens of seconds or even minutes, and sometimes this will be the only source of data.”

Nevertheless, Moritz Maurer, head of esports at Genius, said the complexity of esports was clear from the data that surrounded it. In-play poses a “challenge,” he said. But the potential to involve the audience at a deeper level was clear.

“The rich data doesn’t exist in other sports – we extract right from the server,” he said. “The comprehensiveness is appealing and an additional level of engagement is possible. Besides the complexity, you have to see esports as being very quick. Lightning fast actions. This needs to be translated into the betting product.”

The multiple supplier issue

Savinson agreed and suggested there was already an existing pressure on operators to offer the complete product to customers. That would mean that they would need to look to multiple suppliers in order to give themselves the full coverage.

“A big issue with data is that suppliers can secure it exclusively,” he said. “That means that in order to offer the perfect product across the tournament calendar, an operator will eventually need to work with (both Sportradar and Genius Group). Operators will need to partner with whoever has the exclusive data.”

A problem arises, however, when the publisher of the game is unwilling to share their data. Savinson pointed to Riot Games’ refusal, to date, to sell the data rights to the League Championship Series (LCS).

“The industry will need to come up with innovative ways to get around this issue,” he said. “That poses issues that need to be thought about overall.”

Publishers have to deal with esports betting

The attitude of the publishers of esports games to betting was in the spotlight in March. That’s when Unikrn began offering odds on Rocket League. The games’ owner, Psyonix, said it did not condone gambling. Savinson said the issue of gambling on esports was one that the publishers will have to confront sooner rather than later.

“To come up with such a strong stance – to not condone betting – could make the problem worse. The way to make this work is to work with the betting operators and try and stop issues such as match-fixing.”

Maurer agreed. Psyonix was likely concerned about threats to the integrity of their game caused by perceived unregulated activity. But by ignoring the actual regulated activity “there is no control and there is no visibility over the engagement with your sport.”

Watson said the publishers – largely US-based concerns – “need to understand what we’re looking at a bit more.”

“They need to get their heads around the issue of gambling. Just understanding how betting mechanisms work, how licensing works. These things need to be dealt with first.”

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Scott Longley
- Scott Longley has been a journalist since the early noughties covering personal finance, sport and gambling. He has worked for a number of publications including Investor's Week, Bloomberg Money, Football First, eGaming Review and Gambling Compliance. He now runs his own editorial consultancy Clear Concise Media and writes for a number of online and print titles.