Believe it or not, there is another huge internet sports gambling problem other than Daily Fantasy Sports (DFS), it is called “skin betting.” Skin betting, most prevalent in Counter Strike: Global Offense (CS:GO), a popular eSports title, is a form of internet spots gambling. I do not want to suggest whether or not skin betting sites are legal as most probably operate in a very grey area of the law; thus, it is not too surprising to see that skin betting sites are thriving. Rather, I seek to bring light to the issue and two major problems. In the eyes of the “layperson,” there is no real money being wagered, unlike DFS. Further, courts have found that activities carried out by virtual goods within video games should not be considered gambling. Also, only those in the eSports community realize this is going on. Before I get started, I need to stress how complex of an issue this is. There is a lot more to it than what I write today. The main purpose of writing this is to demonstrate just another issue in the hotly debated topic of whether sports betting should be legal.
Now, let me back up and explain how skin betting works. People go to the internet shop for CS:GO, spend real money to buy the skin, go to a third party site, and bet the skin on professional games. If the team you bet on loses, you lose the skin(s) you put up as your wager. If the team you bet on wins, you get your skin(s) back plus skin(s) whose value is more or less than what you bet. As you can see, no “real” money is being wagered. In comparison, there are websites that allow you gamble with “play” money such as Unikrn. This distinction is very important. In my view, skins are real money. The skins have an intrinsic value to the user and other players. The value fluctuates with the market. However, the virtual currency used on Unkirn, Unikoins, have no monetary value. One Unikoin today will be worth one Unikoin tomorrow. The website even explicitly states “No. Unikoins are a wholly virtual currency that you can use to enter prize draws and bet on games, but cannot be exchanged for real money.”
To me, the Unikoins fit more within the “play money” that the courts say they cannot be bothered with. Skins on the other hand, wholly represent real money. Again, I do not want to suggest the legality of skin betting websites. I would not be surprised to see that most operate in a legal grey area where they are legal one way or the other. Furthermore, It seems likely, since the courts have found that activities carried out entirely with virtual goods within video games shouldn’t be considered gambling, these sites have been protected from legal scrutiny. It is time to change that.
The biggest issues that I have seen as issues in the skin betting world is that of geographical location and age. Sports betting is illegal in almost every state (46 of the 50). In fact it seems like every other day I am reading a story on which state has declared Fan Duel and Draft Kings “illegal” in their state. Agree with sports betting or not, respect the fact that once that notice is made, the DFS provider stop providing service to that state. Skin betting sites, I imagine, ride a fine line. For example, CSGOlounge, a popular skin betting website, reminds its users to comply with local gambling laws. However, according to a recent article on Bloomberg, the website has no “technology to restrict players based on geography.” This should be a red flag.
Furthermore, the access which minors have to these websites and information is incredible. Streamers on Twitch will stream themselves betting on games. You can find YouTube videos on CS:GO skin betting. The problem with minors is two-fold. First, they are being introduced to gambling by streamers that are playing with “house money.” The streamers they watch are usually being supplied the skins to bet with by a third-party. Second, these kids see the gambling and think “oh wow, what an easy way to make money.” But can’t the same be said for ESPN showing poker on TV? Yes, but there is a major difference. Real poker is heavily regulated. You cannot play a game of poker in a casino unless you are a certain age. Participating on a skin betting website is “real betting.” There is no way to perfectly keep kids out of this, but they see these videos and find ways to get involved which should be seen as another big problem.
A whole law review article or comment could be done on whether these sites are legal, that is not my purpose. The point is, people need to take notice and regulations need to be put in place. Where should it start? I think Valve, CS:GO’s creator, needs to lay the hammer down on these websites and start to take some accountability for what has happened. Why Valve? A lot of these skin betting websites use Valve support. Looking at it in a broader light, I would agree with Adam Silver’s view that all sports betting should be legalized and regulated. There is a lot of money that is going into the gaming industry in general, Mo’ money, mo’ problems. Now is the time to solve those problems. I write this to put people on notice that internet gambling is alive in the eSports community. If we choose to ignore it, there is no telling what else could happen.