Global eSports Betting Expected To Hit $6.7 Billion In 2018 Despite Legal Vagueness

With the rise of eSports as a professional sport comes the rise of eSports bookmaking—albeit with questionable legality.
eSports has grown immensely during the last few years and has registered annual revenue of close to $1 billion during the past two years according to market research firm Newzoo. This year, the eSports market has had a great start to the first quarter especially after first-person shooter Overwatch created its very first Overwatch League. This was a huge hit so much so that owners of traditional sports teams like the New England Patriots, Sacramento Kings, Los Angeles Rams, and New York Mets were quick to pay $20 million for a team franchise at the league.
With the rise of eSports comes the rise of eSports bookmaking. As early as 2016, research firm Eilers & Krejcik Gaming and software analytics company Narus released a report that found over $5.5 billion in cash and skins was already wagered on major eSports titles like League of Legends, Dota 2, and Counter-Strike: Global Offensive (CS:GO). The same report estimates that as more eSports titles like Overwatch launch professional competitions, the number can grow up to $6.7 billion in 2018 and as high as $13 billion by 2020.
Is eSports Betting Legal?
While figures of eSports bookmaking continue to rise, more questions about the legality of betting on eSports tend to rise.
Technically, eSports betting is only legal in the United Kingdom, Australia, New Zealand (via overseas websites), Spain, Macau, Taiwan, Japan, and Korea. In the US, eSports is subject to the same vague loopholes as sports betting. Sports wagering is currently legal right now only in Nevada, Oregon, Delaware, and Montana. The other problem with eSports betting in America is the fact that it would have to be carried out via the internet and that raises the question of online betting – which is generally banned in most US states.
As of now only Nevada, New Jersey, Delaware and Pennsylvania have legalized online gambling. This makes online eSports wagering truly questionable in terms of legality.
Yet another issue crops up when it comes to the currency of eSports betting. Unlike traditional sports betting, where cash is the main currency, many gamers resort to skin gambling. In video games, skins are in-game items affect appearances and capabilities of your character. Gaming regulators have recently cracked down on skin betting as they found iGaming operators and players are exploiting loopholes and using skin betting in a similar manner as real money betting.
PASPA’s Impact On eSports
New Jersey and a number of other states are currently waiting on the decision of the Supreme Court to overturn the Professional and Amateur Sports Protection Act of 1992 (PASPA), many believe that a favorable ruling on the PASPA will also massively impact eSports wagering.
If and when PASPA is repealed, a number of states are poised to roll out their own sports betting framework. This means that eSports can fall under different categories, depending on the state. Currently, in Nevada, eSports betting come under “other events” alongside Heisman Trophy winners and the NBA draft.
Unikrn Accepting eSports Bets
Unikrn is one of the most popular bookmakers currently in the market who is handling eSports betting. Rahul Sood, founder of Unikrn says the Unikrn platform has 4 million active users and a large chunk of it is comprised of younger punters who are most likely playing multiplayer games or watching leagues. Sood believes that the PASPA repeal will be a huge windfall for his company to really reach and grow this younger demographic.
But while bookmakers are eager for the PASPA repeal’s positive effect on eSports betting, the American Gaming Association (AGA) thinks it’s going to be a bit more complicated.
Unlike official sports, bookmakers lack sufficient data on the performance of eSports players, making it hard to come up with odds. Add to that the immaturity of the market because of the sheer number of underage fans of eSports, which makes it a dangerous venture for many bookmakers.
Will Green, senior director of strategic communications for the AGA, believes that the PASPA will not bring an overnight boom to eSports betting since legislation at the local level will have to be ironed out.
But Unikrn remains bullish and believes that the PASPA repeal will still provide a generous boost to the market. According to Sood, one of their plans is to partner with land-based casinos to take advantage of their geo-based technology and verification system to ensure that only customers on legal states and of legal age can begin betting on eSports.
Sood believes it will take time but the PASPA repeal is a great first step. In a statement, he said, “Everything takes time; each state is different.  But we are catching up with the rest of the world.”