Investing In Esports Gambling: “This Is The Time”

Published: Aug 30, 2016 - Last Updated: Jan 20, 2023

[toc]The question of whether esports are the next big thing is quickly fading.

The industry has grown into a gigantic market in the last couple of years, and the figures from market research companies like Newzoo and SuperData definitely back up this fact.

As the industry gets bigger, possibilities for esports gambling are popping up and established bookmakers are getting ready to capitalize on that.

Esports gambling is nothing new

There has already been a lot of activity in the esports betting environment, but up until recently, most of it happened underground, without much regulation from authorities.

The ongoing changes were partially triggered by Valve, the Washington-based video game developer, closing all unregulated outlets and threatening action against CS:GO skin gambling sites that illegally use its software to facilitate betting.

With the closure of a number of these unregulated bookmakers – some have flouted Valve’s request to cease and desist – many esports gamblers will seek new destinations for their betting or will turn from skins gambling to real money esports betting.

“We see this as a major opportunity,” said Moritz Maurer, head of esports at London-based Genius Sports, a company providing esports betting odds, live data feeds, and integrity monitoring services. “If you want to invest in esports gambling, this is the time.”

This unregulated esports gambling market was on pace to reach $7.4 billion in turnover this year, according to estimates from Eilers & Krejcik Gaming and Narus Advisors, and the industry is expected to grow to $30 billion in wagers by 2020.

Even though not all of the money from unregulated markets will migrate, as it includes underage users and people who have been playing in black markets in the US, there is a huge customer base looking for new ways to bet on their favorite games, which opens up new business for established gambling companies.

According to Maurer, the regulated industry with the influx of activity from the unregulated area should reach roughly $2.2 billion.

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SkyBet and Danske Spil ready to go all-in on esports betting

With this recent development, SkyBet, one of the companies that seeks more exposure in the esports betting market, will have to tailor its marketing efforts to serve the typical esports consumer: a young male who doesn’t consume sports in the traditional way.

“This is the future of sports, and we have to focus on that so we don’t get left behind,” said Adam Smith, spokesman for SkyBet. “We just need to put ourselves in the shop window a little more.”

Danske Spil, another gambling market member, also seeks ways to improve its business model to get a piece of the esports betting pie.

By redesigning the look of its website, the betting service provider wants to offer a platform that’s more in line with what gamers are used to. Besides finding information on odds data, bettors can now use embedded broadcasts with esports analyses, a chat function, as well as team rankings.

“We can’t approach them the same as our normal bettors, because the esports bettors are a group for themselves,” said Kasper Nemeth, Dankse Spil’s esports manager. “Instead of trying to make them traditional sports bettors, we’re giving them their own playground.”

More options and security for a better experience overall

Betting service providers like Sky and Danske supplement the traditional odds betting service with live betting, a popular option that lets players bet on odds that change in real time. That’s a service designed to make every match more gripping.

Such regulated platforms also offer more security, especially with features like age verification and detection software for suspicious activity. Programs that help problem gamblers are also in place, and all of it is overseen by regulatory bodies.

Even though esports betting currently accounts for only a small fraction of the regulated sports betting market, it’s still a growing business area that will probably attract many established betting providers, especially if the underlying industry keeps growing at this pace.

Dejan Zalik

Since: September 12, 2015

Dejan has been involved in gaming for over 10 years. Moving from classics like Diablo 2, Lineage 2, and Warcraft 3, he found his passion in Dota 2, which he’s been playing ever since. He also likes to keep up to date by reading and writing about whatever is happening in the industry.

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