E-Sports Gambling Site Took $13.2 Million in Bets Post-Crackdown

  • Game-maker Valve told betting sites to stop using its software
  • Rise of gambling has led to lawsuits, match-fixing scandals

Two weeks after game-maker Valve tried to stop a rapidly growing form of unregulated gambling on professional video gaming, the most popular gambling sites are still taking millions of dollars worth of bets.

On the biggest betting hub, CSGOLounge, gamblers have wagered more than $13.2 million worth of virtual goods since July 13, when Valve said it would stop websites from allowing its products to be used as currency. The average amount of money bet on each game is down about 25 percent, according to gambling monitor Genius Sports.

Valve’s cease-and-desist letter said the sites are violating the company’s terms of service by using its software to facilitate betting and must stop by Friday, July 29.

The announcement sent ripples through this dark corner of the e-sports world. Bettors, many of whom are teenagers, were on pace to wager $7.4 billion on these sites this year -- 12 times as much as estimated e-sports betting at regulated sports books, according to Eilers & Krejcik Gaming and Narus Advisors.

CSGOLounge isn’t the only such site still operating, though bettors’ options are shrinking. A number of sites have shut down, including CSGOCasino and CSGOFast, while others, like CSGOBig and CSGOCrash said they intended remain in business with a new model that meets Valve’s demands.

Gamblers bet with what are called skins -- virtual items, like decorative weapons, that can be acquired by playing Valve’s games or bought through a marketplace called Steam, which is run by Valve. Players can take their skins to other sites to bet them, or trade them for cash, and the two biggest exchanges said said they’d remain open. "In-game digital items is a $20 billion global business. That is not going away," said Artur Minacov, co-founder of OPSkins, one of those marketplaces.

Long silent on the topic, Valve on July 13 announced that it would crack down on the gambling websites. Six days later, a Valve lawyer sent a cease-and-desist letter to 23 sites, telling them they violated the terms of Valve’s software. Neither a Valve spokesman or the lawyer responded to requests for comment.

Valve is facing two potential class action lawsuits brought by people who say they’ve lost money gambling with skins. Valve this week responded to the first, asking for the case to be moved from Connecticut to Washington state. Valve also said it has no business relationship with the sites and that they misuse the company’s software. 

Amazon’s Twitch.tv, one of the largest online streaming websites, is also separating itself from the third-party gambling sites. The network announced that it would no longer allow people to promote or play on the skins sites using its service, cutting off a valuable marketing stream for these sites, and a source of income for many e-sports personalities.

Meanwhile, the most mainstream corner of professional CS:GO play appears to be unfazed. Twitter announced Thursday that professional CS:GO would be its first ever live e-sports broadcast, part of a deal to show the semifinals and finals of ELeague. In its first year of operation, ELeague is a joint venture between WME-IMG and Turner Broadcasting.

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