Vulcun, one of the most promising eSports start-ups in 2015, announced this week that it will stop paid fantasy on its website. According to the company, the decision is necessary considering the current legal landscape in the United States.
Real money DFS goes away, other products stay in place
Additionally to real money wagering, Vulcun also offers betting around its own currency, gold, which can be bought with real money and then used for betting and purchasing in-game items for Counter-Strike: Global Offensive, League of Legends, and Dota 2.
According to the company, only paid contests on Vulcun will no longer be offered; Gold betting, Gold Fantasy Contests, Marketplace, Lootdrop, and Jackpot will all continue on as normal.
“We’ve seen user engagement shift dramatically over the course of last year, from paid fantasy to all the new features,” Vulcun explained. “For example, last month, less than 10% of our users participated in paid fantasy while 90% participated in everything else.”
The shining star of 2015 eSports
It’s hard to believe this change is happening, especially since the company had such a successful year.
Vulcun started off in January 2015 as a fantasy site for esports betting with an initial guaranteed $250,000 in payouts for the year. This amount quickly grew to $1 million and later $10 million for the calendar year. The company also successfully raised $12 million of new capital in April, just a couple of months after it went live.
“We’re eSports fanatics first, and fantasy to us was a way of making eSports more engaging and fun. However the current legal landscape in the United States has made this difficult. Rather than trying to figure this situation out state by state, we’ve decided to focus our energies on things that ALL our users can enjoy vs. those in select geographies. We’re sad to see (paid) fantasy go, but ultimately it allows us to focus on building a better product that serves our mission.”
With eSports growth, environment becomes more challenging
Not only have new companies entered the market, which makes it harder for existing players to maintain their leading position, but also the regulatory landscape has seen many changes in the last couple of months.
We have recently reported about decisions in New York and Illinois, where DFS was declared illegal gambling. A similar scenario recently played out in Nevada, where the Nevada Gaming Control Board ruled that fantasy sports betting is gambling and ordered companies to obtain licenses if they wish to operate in the state.
A different approach for the future
“Our focus going forward is making Vulcun the premier place to win in-game virtual items.”
The company will put complying with new regulations on a state specific basis, a difficult process that’s often frustrating for users, on the side for now and focus on in-game items rather than real money. With its own currency, this should allow the company to keep offering similar products and avoid the regulation aspect for the time being, saying:
“We’re going to be making some exciting announcements in the upcoming weeks, so stay tuned.”