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Is Esports Betting Legal?

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We can all agree that esports is a highly entertaining product. But what if I told you there is a way that people are trying to make it even more engaging and addictive. Betting on esports tournaments is quickly revolutionizing the entire industry.

Is esports betting legal? Depending on which state you live, betting on esports is legal. There is a variety of companies that give you the ability to bet on certain tournaments, players, and aspects of a game.

Personally, I am not much of gambling man, but I understand the appeal. People are always looking for ways to both make money and bring extra excitement to things they are passionate about. As we’ve already discovered, esports is rapidly growing and the people managing the industry are very excited about the potential betting can bring to their product.

Legal Aspects of Betting

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When I first decided to write this particular blog for Ready Esports our father’s first thought was “ isn’t sports gambling illegal?” He wasn’t referencing just esports but all sports.

For the longest time, there was a federal law prohibiting betting on sports and sporting events. Just this past year in 2018 the Supreme Court overruled the 1992 law and made sports gambling legal again within the United States.

DID YOU KNOW?
The American Gaming Association estimates that Americans illegally wager about $150bn on sports each year.

This was a really popular decision amongst sports fans and those involved in the various sports industries. Not only did this have an effect on sports like the NFL, NBA, NHL, and MLB but it also made it possible for fans to bet on esports.

Bryce Blum, attorney and founder of Electronic Sports and Gaming Law, had many thoughts about the industry and its future. “In the wake of the Supreme Court’s decision, the volume of sports betting in the US is poised to explode — and esports betting will inevitably follow suit.”

Blum was not wrong! There has been an incredible spike in revenue generated from esports betting.

Please be aware every state handles esports betting a little differently. Some states are including esports with the more well-known sports leagues while others are separating them.

State Specific Laws

Chris Grove, Managing Director of Sports Betting & Emerging Verticals for Eilers & Krejcik Gaming, made this comment about esports and legalized betting, “In Nevada, for example, esports aren’t handled like traditional sports for the purposes of sports betting. Each state will have to make their own decision about whether to lump esports in with traditional sports or to treat it separately.”

It’ll be interesting to see how this develops and changes amongst the United States in the next few years.

Grove also made these comments about esports betting and its impact on game developers, “I suspect that many states will decide to handle it separately because of the perception among policymakers that esports largely is the domain of minors. Policymakers may also have concerns about game integrity that could lead to esport being placed in a separate box. It’s entirely possible that game developers will lobby for esport to not be swept in with other sports for the purposes of sports betting, as many have a concern about the impact widespread betting might have on the development of their games and associated leagues.”

There’s a lot to unpack from Mr. Groves comments. First, he brings up an interesting point about esports being a predominantly younger appealing industry.

Almost all of the young athletes who are competing and would be betting are between the ages of 17 and 25. Curious to see how this issue is resolved going forward because esports will always be a young person’s game.

The Effect on Developers

The other aspect he commented on was something I didn’t initially think of. He’s curious to see the effect this could have on game developers actually making the products.

I’m not a game developer, but I’m sure it’ll take them a few years to adjust to these new regulations that will be included in their games.

Any developer that has an esports league of their own will also most likely need to put new policies and procedures in place to deal with gambling to make sure everything remains fair.

Bryce Blum agreed with everything Chris Grove had to say when he said, “Increased esports betting comes with significant risks — threats to competitive integrity, underage betting, and addiction chief among them. While all of these negative externalities are more prevalent in an unregulated marketplace, they will exist in legal markets, and the esport industry is relatively unprepared for the increased risks that come along with increased betting.”

He makes a lot of excellent points that will need to be addressed by the esports industry.

There’s never going to be a real resolution to these problems amongst gambling and esports, but I’m glad to hear the people in charge are making sure everything is taken care of.

Esports Integrity Coalition

One of the ways esports is making sure everything is done correctly is by establishing the Esports Integrity Coalition (ESIC). Their role is to control those issues brought up by Mr. Grove and Mr. Blum. They will report any illegal activity and make sure everyone is staying in line.

The ESIC commissioner Ian Smith had this comment about esports and betting, “The US is one of the world’s largest esports betting black market. The action by Valve to shut down access to skins betting sites in 2016 had some impact, but a large number of American esports gamblers just moved to cash sites and continues betting in an unregulated environment, with all its attendant dangers to the bettors and to esports integrity. Recognizing that people will continue betting, we welcome the decision that should mean that betting on esports can be brought into the light of good regulation.”

Clearly, you can see by Smith’s strong words that by making betting legal this will hopefully limit some harmful exposure within the industry.

People are always going to find a way around the system so they can continue to place bets, but thankfully everything can now be done legally and fairly.

If you read the whole quote, some of you may be wondering what in the world ‘skins betting’ is. It’s a fascinating form of betting that’s not used very much anymore. I will dive deeper into what that is later in this blog.

Some of you reading this article are probably thinking none of this information affects you. All you care about is gambling on esports and its legality within the United States. You just want to find a betting website or service and start placing your bets.

My purpose here is to educate parents and those looking for a career in esports. If you’re going to be a part of the industry you will be best served to know what’s happening.

The Basics and the Numbers

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If you are a sports fan most likely you have placed a casual fun bet with your friends. We did it in college betting on NFL games or golf tournaments.

They were friendly wages that typically involved buying the other person food for a week or cleaning someone’s room.

As long as competitions have been around, there has been some aspect of betting or gambling. This is why it’s really not surprising to see sSports become so entrenched in the betting world.

Video games lend themselves very well to betting. With its intense competition and opportunity to start while the industry is still young.

Some of the numbers behind gambling and esports will shock you with the amount of money exchanged.

Thanks to a 2018 report from research firm Eilers & Krejcik Gaming, we know that the esports betting market was valued at $6.8 billion dollars in 2018 and only expected to climb from there. They anticipate it reaching $13 billion dollars by 2020.

Part of this huge expectation in money betted is contributed to the anticipated almost 600 million people tuning into esports by 2020.

If you’ve read any of our previous blogs about the esports industry you’ll know that 600 million people is a huge goal to achieve. This past year’s League of Legends Championship tapped out at around 200 million people.

They are anticipating such a spike in viewership because of the increased interest in esports betting. It’s funny what happens to viewership when people start putting their own hard-earned dollars on the line.

The more casual fans will obviously become more engaged in the product when they are following their bet lines making sure they get a return on their investment.

At the end of the day, there is a lot of money involved in betting on esports and people will continually want a piece of that pie.

If you were one of those people that would like to dip your toe into the world of esports betting you’re probably wondering, “How do I bet on esports?”

How to Bet on Esports

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The Bet

Before placing any bets, it can be beneficial to know what you’re betting on in the first place.

You’ll need to understand that esports is a growing industry that’s basically a video game competition. Gamers (i.e. athletes) from all over the world gather together to compete in tournaments which determines who’s the best, both player and team.

There’s a huge variety of games currently played in the esports industry. Beyond the variety of games, you will also find different athletes with their own styles and personalities.

Some games will offer very customizable forms of betting, but in general, you’ll simply place a bet on the overall winner of a match. Of course, depending on the game being played matches can look slightly different.

Other games offer you the option of betting on specific athletes. This is more common in games that are a single player like Super Smash Brothers or Street Fighter.

Beyond simply betting on matches and individual players, the betting starts to get even more customizable.

For instance, in games like Overwatch or Call of Duty, which are first-person shooters, you can place bets on the number of kills or the number of headshots.

As the industry grows and the betting matures, I’m sure game creators and booking agents will get even more creative with how and what you can bet on.

Skin Betting

As promised I wanted to explain the concept of “skin betting” and how it’s affected esports.

Before esports betting became legal, some companies would allow gamers to place bets not with cash but with items they had collected from a game.

DID YOU KNOW?
A skin is a graphic or audio download which changes the appearance of characters in video games. They’re purely aesthetic and do not increase a character’s ability or have an impact on the outcome of a game.

Within most esports games there are customizable items that you can purchase or obtain through winning matches. A lot of these items are incredibly rare and can actually cost a lot of money.

Skin betting was allowing fans to place bets by putting their valuable items on the line.

While this sounded simple at first and seemed like a more wholesome way to place an esports bet there was actually a lot of controversy around the concept.

Two controversies surfaced from skin betting. First, skin betting allowed youth under the age of 21 to place bets online.

All these kids needed were items they had obtained within a game. No cash was ever exchanged. This made it easier than ever for them to place bets illegally.

Secondly, it made it very easy to place bets in places where it was illegal. Primarily the United States before the federal law change in 2018.

By trading skins, people were able to slip through the cracks and get away with their actions.

Companies eventually caught on to what betting sites were doing, and many lawsuits and cease-and-desist letters were issued putting an end to skin betting for the most part.

Since the law changed in 2018 people no longer have to be so secretive when placing bets on esports. This has also made skin betting not nearly as popular as it once was.

Now that you know what you can and can’t do when placing bets you need to know the games being played within esports.

The Games

For a quick reference, most people will bet on the more popular and well-known games.

  1. League of Legends
  2. Dota 2
  3. Counter-Strike Global Offensive
  4. Overwatch
  5. Fortnite

There are obviously more games, but these are the more common ones you’ll see.

While you might watch esports initially because of the potential winnings, my hope is you’ll become an esports fan for the love the sport.

Now that you have a basic idea of what you can bet on actually placing a bet is fairly straightforward.

Where to Place a Bet

The easiest way is to place a bet is to go online and find one of the more reputable websites offering esports betting.

Here are the ones I found.

  1. Unikrn
  2. Pinnacle
  3. 888 Sport
  4. 10 Bet
  5. Paddy Power
  6. Bet365 Sport

Please be careful as you make your research and place bets. Ensure the websites are stable and fair.

All of these websites will give you proper step-by-step processes to know how to bet and the appropriate ways to do it. Everything can be done entirely online without ever needing to speak with a person.

All of this betting and gambling talk has made me a little anxious. I can’t personally place bets because the stress would be too much.

Related Questions

What if I become addicted to gambling? While gambling can be fun there is a dark side to it where people truly lose their way. Please be careful and know there is always help if you feel stuck. You can start by contacting the National Council on Problem Gambling helpline at 1-800-522-4700.

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