We believe skin gambling sites are not currently safe for players due to the threat that players will lose the skins that they deposit due either to a site shutting down and not refunding deposits or Valve freezing the Steam account of the site and confiscating all skins.
This is true both for “jackpot” sites and for CSGO skin betting sites like CSGO Lounge. So where can players bet on CS:GO and other esports?
What are the best alternatives to CSGO Skin gambling sites?
Real money CSGO gambling sites have always been better
The initial appeal of skin betting was driven by a few factors:
- Ease of use: Signing up for sites was typically a breezy process. Beyond access to their Steam URL, players were never asked to fork over sensitive personal information, like their SSN.
- Flexibility: Skin betting sites varied widely, offering everything from match betting to casino-style gambling. It’s this broad appeal that contributed to the market’s success.
- Worldwide Market: Players from the U.S. and other jurisdictions where sports betting is not regulated could freely participate.
- No real-money deposits: By betting skins, users bypassed the sometimes arduous process of making a real-money deposit on a gambling site.
Yet, with all these benefits came one major caveat: skin betting was operating in a completely unregulated environment, thereby subjecting users to a bevy of vulnerabilities.
On the flip side, esports cash betting sites operate in a secure, regulated environment where:
- Safeguards are set up to ensure personal and financial protection.
- Users must be able to verify their age before placing wagers. By contrast, some CS:GO skins gambling sites did not require age verification, opening the door for minors to place wagers.
- A site’s ability to operate is not dependent on a third-party like Valve — which has the ability to freeze operator accounts at its discretion.
- Operators have established a measure of trust via reliable payouts, 24/7 access to funds and customer support, and a dearth of server outages and unexpected site shutdowns.
- Employees, or anyone connected to the operator, cannot place wagers on or have advance knowledge of the outcome of an event.
The last point is bound to resonate with CSGO skin gambling users, as there have been myriad accounts of vested parties knowing the outcome of events before they happen.
One notable example that recently came to light is that of a Twitch stream partner of CSGODiamonds.com, who was given knowledge of game results ahead of time.
Other similar scandals of employees toying with odds have also come to the surface of late, at an alarming frequency.
Inside Valve’s crackdown on CS:GO gambling sites
On July 19, Valve sent a cease and desist letter to 23 skin wagering sites that used Steam to conduct activities it said violated the API’s terms of service.
Why did Valve crackdown on CSGO skin betting?
As was the case with daily fantasy sports, when skin betting was a relatively small and seemingly innocuous industry, it flew under the radar. Countless gamblers could easily get started for free with a CS GO casino code, and many – including underage gamblers – were hooked.
But when the industry came to prominence, which it did in a big way (an article by Bloomberg states that the number of users grew 1,500 percent over the course of two years), Valve was presumably forced to take notice.
While Lounge was the first site mentioned in the letter, Valve’s action was likely spurred on by a series of scandals involving four different skin gambling sites during the summer of 2016. Two of those sites’ owners were found to have wagered and won on their own sites using house money, without disclosing their ownership position. A third paid a sponsored player more than $100,000 to promote the site while it admittedly rigged the outcomes of his rolls to severely increase his chances of winning. A fourth site’s owners were directly linked to a professional CS:GO franchise, which Valve ostensibly prohibits.
By Aug. 1, Valve had not only named all four sites in C&D actions, but all the sites had shut down, as well.
A class-action lawsuit filed by a CS:GO player in June, signifying that Valve facilitated the growth of an illicit online gambling industry, was probably the proverbial icing on the cake.
Valve’s CSGO casino crackdown growing more intense
With Valve’s position on skin betting growing increasingly intolerant, affected operators find themselves searching for an alternative means of sustaining their esports betting operations.
Below is a brief timeline of the major events surrounding Valve’s crackdown:
- MAY 2016: Skin gambling site CSGOStakes closes with no notice, failing to reimburse players who had skins or site credit still on deposit.
- JUNE 2016: A popular CS:GO streamer paid to promote a skin gambling site reveals that he was told in advance by site owners when he would win or lose. This was done to make his streaming of gambling on the site “more entertaining.”
- JUNE 2016: A lawsuit seeking class-action status is filed against CS:GO developer Valve. The suit claims that Valve is complicit in the operation and growth of the skin gambling economy.
- JUNE 2016: A major skin gambling site pulls out of the U.S. market in an apparent response to legal or regulatory concerns.
- JULY 2016: Two popular esports personalities who aggressively promoted a skin gambling site are revealed to be owners of said site, a fact that was not obviously disclosed in their promotion of the site.
- JULY 2016: Valve requests that skin gambling sites stop utilizing some aspects of the Steam platform.
- JULY 2016: A popular roulette-style skin gambling site closes in reaction to Valve’s announcement, but announces a plan and timeline for allowing players to withdraw their balances prior to full shutdown.
- JULY 2016: Twitch announces a ban on streams containing skin gambling on the basis that such streams violate Valve’s TOS.
- JULY 2016: Esports journalist Richard Lewis raises allegations that another major esports personality maintained an undisclosed ownership stake in a skin betting site while promoting said site.
- JULY 2016: Valve issues cease-and-desist notices to 23 skin gambling sites. A handful comply, but most continue to operate.
Predicting the future of legit CSGO skin gambling sites
Where CSGO skin gambling goes from here largely depends on how aggressive a stance Valve takes in curtailing the activity. As of now, I’d describe its current position as moderate.
Following Valve’s announcement, several high profile CS:GO skin betting sites ceased operations. However, there are strong indicators that the shutdowns are only temporary until a suitable loophole can be found.
The language of a few “goodbye” announcements even suggests that operators were anticipating this move by Valve, and have been preparing for it for months.
In truth, Valve cannot completely eliminate skin betting unless it first disallows users from trading items — a radical step that it has shown no indication of wanting to take.
Until then, skin betting will persist in some capacity, with Valve continually having to play a cat-and-mouse game as the industry struggles to remain one step ahead. Some, like most popular skin betting site CSGOLounge, are conducting business as usual and may stick with the current model until it is no longer viable to do so.
That being said, as more and more skin betting sites fall by the wayside in the coming weeks and months, expect the divide between skin betting sites and regulated esports gambling sites to shrink.
As for the long term, it’s presumable that skin betting will become regulated in select jurisdictions, particularly in Europe. However, the (overly) restrictive nature of sports betting laws in the U.S. will make the path toward regulation stateside a difficult one, at best.
A brief history of CS:GO skin gambling sites
The introduction of weapon skins sparked a growing interest in the CS:GO gambling scene.
Valve, the creator of Counter-Strike, launched an open market for community members to create items with developer tools. Community votes determine which items are introduced to the game.
Players receive items and cases through random drops, and cases can be opened for $2.50 to generate skins within the game. Market sales determine item values by supply-demand interactions, giving each item a value based on its rarity, aesthetic desirability, and wear.
Essentially, CS:GO facilitates currency-exempt gambling by using virtual capital. The majority of people who gamble often play Counter-Strike, but also actively follow streams on Twitch.
Streamers have, in the past, grown the popularity of sites solely by gambling while on-air. So, the demand for valuable items grew Counter-Strike item betting beyond the scope of competitive games.
Let’s take a look at how, why, and when these services evolved.
CS:GO Lounge – the original CS GO casino
CS:GO Lounge was the first betting service to take the community by storm. It seems like the project started in 2011 (that’s the date of its Facebook group’s first post), but only gained significant momentum by 2013.
Professional games are registered on the site for players to gamble, and the odds are determined by the total amount of bets on each team.
Sites like these can be profitable if you closely follow games and community news. By betting against the odds and understanding them better than the average user, you can reduce the need for luck.
CSGL is simple and straight to the point. Looking back, this was a key stepping stone for the modern esports gambling culture.
CS:GO jackpot games
Jackpot games were first popularized by Skin Arena in April 2015. It did so by tapping into a slightly different market than CSGL.
The chance to win expensive skins with small amounts of money intrigued all types of casual skin owners. Jackpot games follow a very simple principle. They allow players to add skins to a pot (with a new pot every minute or two).
A player’s chance of winning is proportional to the amount of skins that bettor deposited (if your skins compose 5 percent of the pot, you have a 5 percent chance of winning).
Naturally, people with big inventories dominated these sites because consistent betting had the highest trade-off. Also, wealthy players often claimed entire pots by throwing $1000+ in the last seconds, essentially ‘sniping’ other people’s items.
These sites lost popularity in the later months of 2015 because the same people kept winning. Also, most of these sites asked $5 for a minimum bet, which is too much for people who simply deposit skins that were collected by playing.
The community wanted a game that could let anyone win.
CS:GO Blackjack was one of the first CS:GO casino games to use skin items as its gambling medium. Although in part, the time of its release (around April 2015) caused it to be overshadowed by jackpot games like Skin Arena, it still made multiple appearances on streams and sponsored several relevant players.
Blackjack also had the issue of not accepting low-value skins. Its two dollars per skin cut-off excluded a notable portion of the gambling market. Following developments in the market, proved that there was money to be made in those untapped corners of the industry.
CS:GO coin flip sites
Coin flip games, first made famous by CSGOWild in October 2015 (and followed by other CS GO 1v1 sites), were the simplest form of CS:GO gambling to emerge.
CSGOWild was also the first service from the websites on this list to accept low-value skins. This, in combination with a simple referral system, really made the website take off.
Brief and simple games help stream entertainment, particularly when a lot of money is on the line. So, CSGOWild took the market by storm, even though the timing of its release caused it to share the spotlight with CSGODouble.
With blackjack and jackpot games paving the way for more involved forms of betting, roulette games soon flooded the market at the end of 2015.
CSGODouble was the first successful roulette implementation. Famous players quickly noticed that people enjoyed watching their reactions while playing, giving them personal incentive to bet while streaming.
Even though each roulette result is created independently from a random number generator, forums were soon infested with different betting strategies and people who claimed to know the golden pattern. It seems that gamers, even when gambling, like to approach the process much the same way they play competitive video games.
CS:GO dice games
Dice games gained popularity around March 2016. They claimed a large portion of the market by offering several different ways of placing bets. Odds, number of bets, winning criteria can all be adjusted under the limits inherent to the game.
So, customization options are in part why flexible CSGO sites like CSGODiamonds became successful. At the same time, streamers introduced the game at a time when roulette and coin flip games started feeling stale. So, a large portion of the market was left open.
Metagame speculation for dice games paved the way for something more engaging and complicated and as such still stand as the newest successful betting service.
There have been six different popular CS:GO skin betting website types to date. Although these changes might seem random at first, they are the consequence of market openings that are discovered by keen entrepreneurs.
Nobody knows how this market will develop. Virtual item gambling debates float to the surface every so often, making the future uncertain.
As for the progression of the games themselves? My opinion is that we can expect to see more sophisticated games as time goes on. Creativity is the only limiting factor.
How CS:GO skin betting works
Skins are virtual items that can be used in games like Counter-Strike: Global Offensive (CS:GO). The term “skin” is derived from the typical function of these virtual items: changing the appearance of a player’s in-game avatar, weapons, or equipment.
There are a number of ways for players to acquire skins. In CS:GO, players can acquire skins by:
- Receiving them during gameplay.
- Receiving them as a promotional giveaway (often around major CS:GO events).
- Trading with other players.
- Purchasing skins on a variety of marketplaces.
How do people bet skins?
Forget for a moment the practical application of a skin (changing the appearance of a character in a video game) and instead think of a skin as a simple unit containing value – not unlike a casino chip.
Like a casino chip, a CS:GO skin can be traded between the player and the house. That basic functionality allows skins to serve as a de facto currency that can power basically any type of gambling product you can imagine. Here’s how it works:
- Players “deposit” a skin at a skin betting site (popular types of sites include sportsbooks, lotteries, roulette, and coin flips) by transferring the skin to the skin betting site.
- They gamble using their deposited skins (or in some sort of internal currency that the player receives in exchange for their skin).
- If they win, they’re paid in additional skins, which they “cash-out” by requesting that the skin betting site transfer skins back to the player.
Once players have skins in their Steam account, they can:
- Leave the skins dormant in their inventory.
- Use the skins to change the appearance of their weapons.
- Trade skins with other players.
- Sell skins on the Steam marketplace for Steam credit (not cash) that can be used to buy other skins and games via Steam.
- Exchange skins for cash on third-party sites outside of Steam.
Here’s a visual explanation of the process:
Note that not all video games with skins or other virtual items allow those items to be transferred between players. Among popular esports, CS:GO and Dota 2 are unique in allowing the easy movement of virtual items between accounts.