Esports Betting: Inside The Esports Gambling Market

October 17, 2019

The market for gambling on esports remains small compared to other, more established, verticals, but esports gambling nonetheless represents one of the most dynamic verticals within the global gambling industry.

Learn more about esports betting with our comprehensive guide to the intersection of esports and wagering below.

Esports gambling research

Get a stronger grasp on the fundamentals of esports and betting with three unique pieces of research, each focusing on different aspects of the industry:

Esports betting sites

Below are select reviews of major bookmakers that offer esports markets:

The basics of esports betting

Skin betting

Skin betting – also referred to as item betting – is more of a genre of gambling products as opposed to a unique product.

Our research suggests that skin betting is far and away the most popular way for esports enthusiasts to bet, but the murky nature of the industry complicates precise analysis of market size – and also raises questions regarding the long-term viability of the industry.

What it is

Skin betting is effectively identical to “traditional” gambling (e.g., the type that happens in a Vegas resort or at an online casino like Bet365), save one key difference: instead of betting using cash, players bet using in-game items from Counter-Strike: Global Offensive (CS:GO) and Defense of the Ancients 2 (Dota 2).

The in-game items are generally items that can be used to change the appearance of your game character or items, hence the term “skins.”

Following that swap – skins as the underlying currency instead of cash – skin betting is broadly indistinguishable from traditional gambling. Players bet skins on things like:

  • Esports matches
  • Coin flip games
  • Lotteries
  • Casino games like blackjack and roulette

How big is it?

There is low visibility into the skin betting vertical. Very few, if any, publicly-traded companies are directly involved, and many of the operators appear to be small outfits with opaque ownership.

That reality complicates a precise analysis. But based on my research for Narus Advisors / Eilers & Krejcik Gaming (involving a mix of acquired data, channel checks, and a healthy amount of speculative modeling), I feel confident making the following observations:

  1. Skin betting is far and away the most popular way to bet within the esports community.
  2. The total handle across all skin betting sites – based – was on pace to exceed $7bn in 2016 prior to Valve’s crackdown.

Why it works

A few key attributes of skin betting help to explain its popularity:

  • Low friction: For the typical gamer, signing up for a skin betting site and placing a bet is a matter of a handful of clicks. The games are quick and generally have no learning curve.
  • Abstraction: The use of skins instead of cash is akin to the replacement of cash with chips in the casino, creating a level of abstraction that likely increases the typical willingness to wager.
  • Compelling value proposition: Many players might regard unused skins as having lower value than they actually do, and the chance to parlay those items into the acquisition of new (often random) assortments of skins can similarly be overvalued. That creates the perception of a value gap that allows players to justify wagering when they know it’s a long term losing bet (e.g., a lottery with a rake).
  • Low barrier to entry: Skin betting sites are often hyper-simple games, making it low-cost for a new operator to enter the market.
  • Highly social product: Videos of skin betting – especially massive wins – are popular on platforms like YouTube and Twitch. Streams of skin betting sessions are a common sight, and streaming platforms are often a significant source of traffic for skin betting sites.

Potential challenges

While the growth of skin betting has been impressive, there are material questions surrounding the near-term future for the industry.

  • Lack of regulation: The skin betting space is effectively unregulated. Such spaces have typically run into significant issues with fraud, or run afoul of key stakeholders (media, lawmakers, etc).
  • Legal ambiguity: The question of the legality of skin betting remains an open one. The example of daily fantasy sports is instructive when considering possible trajectories for a wagering product that attempts to operate outside of the legal / regulatory framework for gambling in the United States.
  • Saturation: There are dozens and dozens of operators, a landscape that is splitting revenue and liquidity. Compressing revenue and liquidity would likely result in a whole greater than the sum, especially for jackpot products.
  • Lack of product innovation: The simplicity of the product may well be an asset. But it’s unclear whether leading skin betting sites have the capacity or interest in developing additional iterations to drive additional interest.
  • Lack of supporting structure: The small-scale nature of many skin betting sites also means that ancillary functions – marketing, affiliate programs, customer service, and so on – are undeveloped, a reality that may depress consumer interest.
  • Dependence on Valve: The entire product is built on the back of the Steam marketplace. If Valve were to take a dim view of skin betting, the ability of skin betting to sites to accept and pay out skins would be dramatically diminished.

Esportsbook betting

Esportsbook betting sits somewhere between fantasy esports and skin betting in terms of size and prominence in the market, but arguably has the greatest upside in the medium-term of any wagering product focused in or around esports.

What it is

Simply put, esportsbook betting is the traditional sports betting model applied to esports. Instead of wagering on Premier League or NBA games, participants wager on outcomes of esports events, such as the recent CS:GO major in Columbus or the LoL Spring Championships at Mandalay Bay.

This kind of betting takes place primarily online, although we should expect the emergence of land-based esportsbook betting options before too long.

The companies offering sports betting on esports are a mix of traditional online bookmakers expanding into esports (e.g., betway, bet365, Pinnacle) and newer sites that are focused primarily or exclusively on offering esports wagers (e.g., Unikrn).

How big is it?

Our current estimates call for roughly $649mm in total handle for esportsbook betting in 2016.

That’s a number that towers over expected handle for fantasy esports, but sits well below the expected aggregate handle across all genres of skin betting sites.

There are a few caveats attached to that projection, most notably that it only addresses betting that takes place at online sportsbooks licensed in known regulatory jurisdictions. As a result, the number is likely a material factor below the actual handle that would result were one able to sum the regulated activity and the grey-to-black market activity.

Adoption of esports among major regulated online bookmakers has been rapid and comprehensive. To that point: In 2012, virtually no major bookmakers outside of Pinnacle offered esports odds; today, virtually all major bookmakers offer some esports action, although the quantity of fixtures varies dramatically from site to site.

Why it works

I expect rapid growth for esportsbook betting to kick in as we approach 2020. There’s an extensive case behind that assertion, but the key points look like this:

  • Just another sport: Once the challenges of data and pricing are solved (more on those below), there’s little that sportsbooks will have to do on the platform side to embrace esports. The vast majority of systems and structures that underpin the multi-billion dollar sports betting industry will cross-apply relatively neatly to esports.
  • Attractive audience: The core esports enthusiast is an attractive customer for the typical sportsbook: Younger (think late twenties to early thirties) with disposable income (gaming is far from a cheap hobby) and a proven propensity to gamble. The appeal of that audience will likely drive sportsbooks to invest heavily in esportsbook product and marketing in an attempt to beat the competition in the race for a much-desired demographic.
  • Cross-sell potential: While it’s still early days, my conversations with traditional online gambling sites that are offering esports indicate that there’s a greater cross-sell potential to stick-and-ball sports betting and casino play than one might imagine. That may be a fluke or a function of early adopters, but if the trend holds and esports customer prove to be not only potentially valuable customers at some point in the future, but actually valuable customers in the near-term, we will see a massive push across several operators to establish a prominent place position in the vertical.

Potential challenges

  • The data problem: The lack of availability of reliable, robust data from esports matches across a wide swath of titles is definitely dampening the potential of esportsbook betting. Companies such as Sportradar and BetGenius have recently rolled out partial solutions on the data side, but the industry will need these solutions to evolve and expand in order for the full potential of esports betting to be realized.
  • Pricing is a challenge: While some sharp bettors can beat pricing on traditional sports like football and baseball, the skill of correctly pricing a wide range of bets for such sports is a relatively established one (and one that is frequently packaged as a data stream of pre-priced bets that operators can simply pipe into their platform). But the same cannot be said for esports betting, where there simply isn’t a deep pool of available talent for pricing even the simplest bets (e.g., match outcomes)
  • Developer ambivalence: The relationship between gambling and game developers is a complicated one. It’s also a dynamic relationship that continues to evolve on a week-to-week basis. But, as things currently stand, the majority of major game developers appear content with keeping gambling at arms-length, an attitude that exacerbates the data and pricing problems described above while limiting endemic exposure opportunities for sports betting sites that offer esports.

Fantasy esports

Fantasy esports – often abbreviated as DFeS – is one of the smaller branches of the esports betting industry.

While ad hoc and free-to-play versions of fantasy esports have been available for quite some time, the ascendance of fantasy esports kicked off in early 2015 as the genre rode the wave of interest and enthusiasm around daily fantasy sports.

What it is

Fantasy esports is broadly similar to traditional fantasy sports.

Participants create a lineup of esports pros competing in a given event or slate of events (salary cap model is most prevalent) and then that virtual lineup receives points based on how the real-world pros perform. The lineup that scores the highest wins the fantasy competition.

How big is it?

Relatively small, at least when compared to skin betting or cash betting on esports. Right now there are a handful of primary sites for fantasy esports play:

  • DraftKings (offers esports alongside traditional sports)
  • EsportsPools (fantasy esports and additional games)

The two initial leaders in the vertical – AlphaDraft and Vulcun – both shuttered in 2016.

The stakes involved tend to be lower than on traditional DFS site like FanDuel.

Overall, the annual handle for fantasy esports is likely described in terms of millions to tens of millions of dollars, as opposed to the hundreds of millions used to characterize cash betting and the billions involved in skin wagering.

Why it works

While the genre is relatively small, I believe there is a long-term place for fantasy esports betting in the broader esports betting landscape:

  • Engagement: Fantasy esports is a unique product that speaks to an audience looking for greater involvement than a simple sports bet can offer. Fantasy esports competitions give players a chance to dive into deep analysis (although such analysis is certainly also possible with sports betting) and to engage with their favorite players on a unique level.
  • Player vs player: Fantasy sports is peer-to-peer wagering, while other popular forms of esports betting are typically player-vs-house.
  • Safe entry point: Fantasy sports are a familiar, innocuous template that may serve as a palatable entry point for developers and brands that want to engage fans via wagering, but who are concerned about the cultural associations surrounding sports betting.
  • Deep data: esports is a data-driven product, and fantasy sports products tend to thrive in contexts with robust data availability.

Potential challenges

The size of the place that fantasy esports occupies in the landscape for esports betting could vary based on a number of factors:

  • Legal challenges: Daily fantasy sports is facing numerous challenges in a variety of states. While state lawmakers are typically not concerned directly with fantasy esports, whatever happens to DFS effectively trickles down to fantasy esports as well. We could see the fantasy esports market shrink and more states challenge the legality of DFS or pass bills that make doing business too costly for fantasy esports operators.
  • Liquidity challenges: While big prize pools aren’t the only thing that drives a product like fantasy esports, they certainly help. And having enough players participating to ensure that there’s a rich choice of contests for all players is certainly a critical need for any fantasy esports site. But as the genre lags behind other formats, we may see liquidity drop to a point where growing the product becomes a real challenge.
  • Lack of competition: As mentioned above, there are only a handful of sites offering fantasy esports. It’s possible that the limited competition could stifle innovation, product development, and promotional / marketing outlay – all things that are arguably necessary if the broader genre of fantasy esports is to thrive.

Understanding common esports betting odds and how they work

Esports betting is one of the fastest-emerging betting markets in the world today.

There is a growing global market for esports and as these games and the individuals that play them gain more fame across the globe, so the market for betting on the outcome of the top esports matchups also grows in size and scope.

For someone who perhaps took their first steps into the realm of online betting by wagering on sports, it can seem a large shift in culture to effectively be betting on the outcome of a computer game between two individuals or teams of competitors.

In truth though, the difference when it comes to betting on esports compared to sports is generally very small (we’ll get more into the divergent points below) and is no different to the distinctions you would find betting on football versus baseball.

Some bets are universal to esports betting and sports betting, while some bets are entirely contextual based on the game itself.

One of the most common bets you can find on esports betting, as well as sports betting, are money line bets. Indeed, when it comes to esports betting, these are arguably the most popular type of bets placed on esports.

So how can you read money line bets and how do they work when it comes to esports? Let’s take a closer look and find out.

How to read money lines

It should be noted here that money line bets do differ from country to country and in this article, we are focusing on the money line bets you can find on esports in the UK, with providers such as Bet365 Sport.

A money line bet is simply a wager on which of the two teams competing in the esports event will win. The shorter the esports betting odds of a team, the greater their chances of winning (in the bookmakers’ view), while the longer the odds of a team, the less chance they have of achieving victory.

So for example, if Samsung Galaxy are 7/4 to win their match against Rox Tigers who are 2/5, Rox Tigers are the clear favourites to win.

Rather than use the term money line, lots of UK esports bookmakers will either have a match result, or match result handicap market instead – the difference between the two being that on the second a handicap is applied to each team to bring the odds of each selection closer to even.

For example, in the example above Samsung Galaxy may be given a +1.5 map handicap, while Rox Tigers may be given a -1.5 map handicap, and the odds on each team with their handicap applied is then adjusted.

In the UK, money lines are predominantly used on US sports betting, but occasionally you can see the term used for esports. Regardless of the terms used, these are the most popular bets on esports you can place.

Do all esports betting sites offer the same lines?

The first thing to note here is that esports betting is still very much an emerging market and as such, many esportsbooks are offering an increasingly wide number of bets as they become more familiar with betting on these events.

The most common bets are available across almost every esport, including money line betting outlined above. However when you get down to more the context-specific bets that relate to a particular esport or tournament, then the bets offered from esportsbooks do vary considerably.

What you will tend to find is that specialist esports betting sites will likely offer a wider choice of markets and lines than non-specialist, however there are an increasing number of sites (such as Pinnacle, Betway and SkyBet) who are offering an extensive range of esports betting lines as the specialist esports betting sites.

Why does it matter which sportsbook I use to place a bet?

It is important to remember that esports betting should, to a punter who is aiming to return as great a profit as possible, be approached in exactly the same way as any other form of betting. This means that for a wise punter, odds and value will be foremost when looking for a bet to place.

The first thing that makes choosing the right sports book important is linked to this. You want a sports book that offers not just an extensive esports service, but one that also has a proven tradition of offering good value odds most of the time.

In the long run, that will save you a lot of searching around looking for the best odds on a bet.

Another issue to consider is the scope of bets offered. If you are not going to bet with a specialist esports betting provider, then the amount of esports betting offered by more general sports books does vary considerably from one site to the next.

Some sites only offer a very small esports betting service; others offer a service comparable to the specialist sites.

Finally, if you are going to be placing in play bets on esports, then you need to ensure your chosen site offers this service. Once again, this is not available across all esports betting providers at the moment, so it pays to do a little research to ensure these bets are available if you want to bet in play.

Other kinds of esports bets to place besides money line bets

The good news for esports betting fans is that the range of esports bets you can now place in addition to money line bets is increasing and that more sports books are carrying a greater range of esports bets than ever before.

Many of the bets you can place are dependent upon the particular tournament and esports in question as they are context-specific, but in addition to money line bets, you should be able to find the following type of bets readily available across most esports betting providers:

  • Match winner (2-way)
  • Match result (for esports events where drawn matches are possible)
  • Round winner/map winner bets (including bets on which team will win each individual round/map)
  • Correct score (where different scores are possible)
  • Over/under bets
  • First team to bets
  • Total maps played in a match (over/under bet usually)
  • Tournament winner bets/group winner bets
  • In play betting

As we have said previously however, the esports betting industry is still very much at a nascent stage. The likelihood is that there will soon be many more different types of esports bets regularly available across a wider range of tournaments over the next couple of years or so.

How does esports betting compare to regular sports betting?

Few betting markets have undergone such a rapid expansion as esports betting. Just a couple of years ago, this form of betting was almost unheard of.

Since then, the explosive popularity of competitive gaming and the accompanying development of a burgeoning betting scene alongside it has seen an increasing number of sports books offering esports betting to customers.

However, on the face of it, esports are radically different to a typical sports betting market. Yes, each is a contest of sorts between individuals or teams, but how these events are played out is very different. Most sports involve physical prowess in some form or another, or a particular skill and betting on these events is well-established.

Anyone can pick up a game pad or load up an esports game on the PC and play, so how can it be possible to bet on esports with the same degree of confidence as you can sports betting?

This is a fair question and one that can only be answered by gaining a greater understanding of how esports are organised and regulated and which esports events betting companies will offer markets on.

What exactly am I betting on when I place an esports bet?

When you place a bet on a sports event, you know that you are placing a bet on a professional or semi-professional event that is subject to stringent criteria about participation. As such, you can be confident that the persons or teams competing are doing so entirely focused on achieving a win.

The biggest mistake a punter can make about esports betting is to assume that betting on esports is different. You are not betting on how two teenagers playing in their bedroom will do battling against each other, but instead you are betting on some of the world’s best esports players competing in some of the most regulated and high-profile tournaments around the world.

Indeed, such is the popularity of esports nowadays that the prize money on offer in some events is on a par and often in excess to what is available in some sporting events. For example, the 2016 World Championship Snooker tournament in Sheffield had a total prize pool of £1.5m. Compare this to the Dota 2 tournament The International 2016, which boasted a prize pool of more than $20 million.

To summarise, when you bet on an esports market with a top bookmaker, you are betting on the highest level gamer, many of them professional, in the top tournament events around the world that have the same strict rules and regulations regarding competition as any sporting event.

How do betting markets on esports compare to regular sports?

When you compare the range of bets available on esports to those offered on a mainstream sport, one thing is key and that is context. However, that is true when you compare one sport to another sport in terms of betting markets. You can’t after all bet on the number of touchdowns that will be scored in a baseball game.

Context is key for esports as the bets available differ from one esport to the next because each game is different to the next. Nonetheless, there are a number of common bets which are available across almost all esports (and also on sports betting).

This includes bets on who will win the match, match handicap bets and what the correct score of a game will be.

What other markets are available on esports are generally context specific, as they are for other sports bets. So for example, in soccer betting, you may bet on the first goalscorer, the correct score, who will score the first goal, which player will receive the first yellow card and so on.

In esports, there are a number of other bets available depending on the game in question and the prestige of the tournament involved. The bigger the tournament and the better the teams participating, then the more chance you’ll find bets available such as which team will draw the first blood on Map 1 and then Map 2, which team will slay the first dragon and so on.

In truth, bookmakers have only just started to explore the wide range of different esports betting markets that are available across the full range of titles. It is still very much an emerging market that now offers a myriad of more choices than it did 12 or even just six months ago.

Does placing an esport bet differ from placing a regular sports bet?

No, in all the different sports book sites that offer esports, every one has allowed its customers to place bets on esports in exactly the same way as customers place a bet on traditional sports. This is usually done by clicking on the odds of a bet, which adds it to the bet slip, then entering your odds and then placing the bet.

Furthermore, you can also bet on some of the top esports events as they happen via in play betting with some of the top sports betting sites. In addition, specialist esports betting sites like Pinnacle and Unikrn also offer more extensive in play betting.

Once again, you place bets in play on esports in exactly the same way as you would on any other sport.

How do the odds compare?

As you would expect, the odds on offer for esports betting are pretty much exactly the same as you would find for comparable sports betting bets. For example, if you have an American football game between the Denver Broncos – current Superbowl champions – and the Tennessee Titans, the worst team in the NFL last season, then you would expect the Broncos to be hot favourites.

In esports, it is exactly the same. If one team is markedly stronger than its opponent, then you will have comparable odds on that team winning as you would a mainstream sports team doing so.

Background on esports and betting sites

There was a time that the idea of playing video games professionally was the stuff of comic strip punchlines, back when those strips were something you’d usually find in a newspaper, and a newspaper was a thing that arrived at your door, printed on actual dead trees.

Now, there are a great many people of my generation and the millennials who came after who have found employment in that industry, whether developing games themselves, providing quality assurance services, working in games journalism, or even teaching game-related subjects at colleges and universities.

All these jobs require one to have played and to continue to play those same games that were once generally regarded as a waste of time.

What’s in a name?

Of course, most jobs in the digital entertainment world involve developing, testing, reviewing or analyzing the games in question, but most recently, a few of the very most talented players have achieved that which was considered a joke just 20 years ago, making their living by playing these games at the highest level of competition.

Given the extent of the dedication and training necessary to play at that level, it would be unfair to continue referring to these activities at games; thus, the term “esports” has entered the lexicon to describe specifically those digital games that pit players against one another, and which feature enough challenge and tactical depth for world class talents to develop.

There’s plenty of precedent for this terminology, since high-skill traditional games – chess, go, bridge, poker and Scrabble, to name a few – have for a while now been referred to as “mind sports” when played in organized competitions.

What makes esports different from (and, arguably, more sport-like than) mind sports is that they incorporate a real-time element and thus require reflexes and physical dexterity as well as thinking. In terms of skill set, then, they fall somewhere between blitz chess and fencing: more physical than the former, but less athletic than the latter, but like both in that the emphasis is on well-honed instincts and rapid decision-making.

If it exists, people will bet on it

Of course, any time people start taking an activity with uncertain outcomes seriously, there will be other people wanting to put money on it.

For the gambler, the leap between wondering how something will turn out and wanting a personal stake in the outcome is often so short as to be non-existent. Thus, from the first time someone said “esports,” it was inevitable that these competitions would find their way into the gambling mainstream.

Now, most major online betting platforms offer lines on at least some esports competitions, although the amount of choice available to bettors is still relatively limited. As those competitions become bigger, more commonplace, and with increasing amounts of money and prestige on the line, esports betting as a sector of the larger sports betting industry can be expected to grow.

The oddsmakers behind the scene

One of the driving forces behind esports betting is a B2B company called Ultraplay. Companies like Ultraplay are by and large invisible to sports bettors themselves, yet most small to medium betting sites would not exist without them. Their relationship to the sites is in many ways similar to the network-skin model seen so often in the poker world.

Not only do companies like Ultraplay provide the back-end software the sites need to run their operations, but they also supply a number of services including analytics, fraud detection, risk management… and the setting of esports betting odds.

This last service is critical when it comes to emerging sectors like esports betting, as one of the biggest dangers sites can face when offering lines on a new, weakly-analyzed market is the risk that two sites are using different models to set their lines and consequently end up offering odds that differ by more than the juice they’re charging.

That opens the door to so-called “arbitrage” betting, where the bettor takes the more favorable line at one site and the other line at another site, and guarantees himself a net profit whatever the actual outcome. Technically, this is only a problem for whichever site set the line incorrectly, but without a way to tell which site that is, it’s bad for both.

This is where companies like Ultraplay come in with esports specifically, as the company bills itself as the world’s leading esports feed provider, meaning that most of the lines you’ll see offered for esports, particularly on smaller sites, are based on Ultraplay’s models rather than being set in-house.

What specific esports games are being offered, then, largely depends on what Ultraplay decides to cover; if they haven’t yet started setting lines for a particular game, you’re unlikely to find it offered anywhere, unless a site with the resources to do so opts to start setting their own lines to get the jump on the competition.

What’s on the menu?

So far, the games you’re most likely to see offered are so-called MOBA (Multiplayer Online Battle Arena) games, including League of Legends (LoL), Defense of the Ancients 2 (Dota 2) and the recent mobile addition, Vainglory.

Also commonly available are CounterStrike: Global Offensive (CS:GO – a squad-based first-person shooter) and StarCraft 2 (a real-time strategy game, part of an older genre that served as a precursor to today’s MOBAs). Other games like Call of Duty, Hearthstone, World of Tanks, etc. are usually not offered on a regular basis, but appear occasionally when large events happen.

Not all esportsbooks offer every one of these games, and there are still plenty of sites that don’t offer esports at all, including, as a few prominent examples, BetFred, BetOnline and Intertops.

It has, however, become widespread enough that presenting a complete list of which games are offered where is both impractical and probably not very useful. Users looking for straight money-line wagers on match outcomes for one of those games will find it quite easy to locate a site offering the bet they’re looking for.

Alternative markets, however, like handicapped lines, correct score markets and proposition bets are much harder to find.

Bet365 currently offers the most variety in this regard, with numerous betting options for CS:GO and Dota 2 events, including winners of individual maps, number of maps played to determine a winner, handicapped lines, shutouts, and so forth.

BetStars likewise offers multiple bet types for larger events, particularly in CS:GO, and other sites offer a few options here and there. Ladbrokes allows for correct score betting in LoL, for instance, and BookMaker offers handicap lines.

The nature of the games in question lends itself to a wide variety of proposition bets in the long term, though it may take time for the necessary depth of understanding of the games to develop both among the oddsmakers and bettors.

Examples of bets that would likely be appealing to bettors and not particularly difficult to set lines for would be an over/under for “Time of First Kill” in a first-person shooter, or “Race to Level [N]” for MOBA-type games.

Another potential axis of development, since most esports games are played by teams of more than one player, would be the introduction of player-specific wagers, such as which individual player scores the most kills. Here, too, considerable sophistication will be required, understanding the stylistic matchups between the teams and the probable role of each team member.

Growing pains on the horizon?

Unfortunately but inevitably, as esports grows in popularity, it has begun to encounter some of the same problems as conventional sports, including drug use, cheating and rules controversies. Although these problems haven’t stopped conventional sports betting from being as popular as it is, they are nonetheless factors to consider when looking at the future growth of esports as a gambling alternative.

Last summer, controversy ensued when Kory Frisen, a former member of esports team Cloud9, admitted in an interview that he habitually used Adderall – an amphetamine – in top competition, and expressed the belief that essentially all of his teammates and opponents were doing likewise.

The Electronic Sports League (ESL) responded by implementing randomized drug testing going forward, as there are proven performance-enhancing effects to Adderall and other psychostimulants, yet also health consequences and potential for addiction when used outside prescribed dosages and purposes.

Another controversy from around the same time involved so-called “map glitching” by the team Fnatic at the Dreamhack Counter-Strike tournament. Members of Fnatic had discovered a glitch in one particular map which allowed an unintended vantage point to be reachable through exploitation of another glitch, called “boosting.”

Boosting is well-known and accepted within esports as “part of the game,” although it was probably not a deliberate part of the game design on the part of the developers. What made Fnatic’s actions questionable is that exploiting the map glitch in question made the game effectively unwinnable for the other side, so it surely would have been deemed illegal, or the map in question removed from competitive play until patched by the developer.

Once it became apparent how they’d won the match, the league initially decided that it should be replayed, but eventually Fnatic themselves recanted and conceded to their opponents to make things right.

It’s this latter sort of scandal that has the most potential to cause problems for sportsbooks and bettors.

What if the glitch in question had been more subtle and only discovered after the tournament was complete and bets had been settled? What if members of Fnatic had tipped off friends that they had secret knowledge of the glitch and told those friends to bet on them to win? What if someone working on a game with potential for esports success deliberately left such a subtle but exploitable glitch in place, and leaked it to a specific team, either in return for direct payment or with the intention of betting on them?

The more money starts being wagered on esports, the more likely such messy scenarios become, and as the daily fantasy sports world is currently discovering, it doesn’t take much to cause a crisis in the legal status and public image of a young but booming gambling industry.

Digital enhancements to gambling

But despite the unique risks involved in esports betting, there are some equally interesting potential advantages to be leveraged as it begins to catch on.

For one thing, esports are by nature much easier to broadcast than conventional sports; the action takes place in digital space and is already rendered for on-screen display by the game itself. There’s therefore no need for cameras or, indeed, much infrastructure at all.

A delay is required for most games, in order to avoid secret information being relayed to the players by outside parties, and someone needs to select which player’s screen to show at any given time, but the actual “footage” comes naturally packaged for digital distribution from the get-go.

That would seem to offer a lot of potential for integrated platforms for both online betting and spectating. Although the need for delays would somewhat limit the possibilities for in-play betting, the advantages of being able to browse, bet on and watch major esports events through a single service are obvious for both the user and the business.

The digital nature of the games also creates ample opportunity for the collection of statistics, and gamblers love statistics. After all, one of the reasons that baseball is so popular among bettors is that the nature of the game lends itself to detailed record-keeping and statistical analysis. That, in turn, makes betting on it a more analytical, less feel-based endeavor.

Baseball has nothing on esports in that regard, however, particularly as developers become more aware of their games’ potential for use as esports. After all, everything that takes place over the course of a match is already encoded as binary data within the computer – whatever statistics people care about are right there to be captured and saved without any need for additional equipment or human involvement.

Aside from providing tables of data for bettors and oddsmakers to pore over, this abundance of statistics is one of the reasons that, as mentioned above, esports have vast potential for unusual proposition bets. If it’s part of the game, the numbers are there, and if the numbers are there, people can bet on them.

Weak links in need of strengthening

One thing that all of these potential problems and advantages have in common is that they’re not intrinsic to game developers, esports leagues or sportsbooks themselves, but rather to the interfaces between these various industries.

The situation at the moment is mostly that developers produce games for commercial sale, then esports leagues decide which games to adopt, and now sportsbooks pick and choose which league events to offer betting for. Each of these steps is carried out with minimal, if any involvement by the other parties in the chain, which means that the risks loom large while much of the potential is being wasted.

The future of esports betting, then, depends a lot on how developers and leagues feel about it. On the one hand, the stigma around gambling presents a PR risk for both, so betting on esports may be something they’d rather discourage. On the other hand, gambling can increase esports viewership, which increases awareness of and enthusiasm for the games themselves, which increases sales for the developer.

Thus, existence of esports betting isn’t inherently problematic to digital games developers and could in fact be beneficial in the long run, but only if they decide to embrace it and work with the leagues, betting providers and – eventually – lawmakers. That way, they could maximize the unique advantages of their games as sports, while doing what they can to minimize the potential problems, which will likely involve tighter quality assurance standards for games slated to be used as esports, and probably some regulatory oversight as well.