One video game’s vir­tual weapons are now a cur­rency for gam­blers

▶▶Teens and oth­ers are bet­ting bil­lions on video game matches ▶▶“Noth­ing about Counter-Strike is about the game any­more”

Bloomberg Businessweek (Asia) - - CONTENTS -

The video game Counter-Strike: Global Of­fen­sive, in which play­ers break into teams of ter­ror­ists and coun­terin­sur­gents to shoot one an­other, is a fa­vorite of the pro gam­ing cir­cuit. A tour­na­ment that con­cluded on April 3 sold out its 10,000 seats at Na­tion­wide Arena in Colum­bus, Ohio, where the NHL’s Blue Jack­ets play, and gen­er­ated 71 mil­lion on­line views over four days. In May, TBS and WME/IMG will launch their own league for CS:GO, as the game is called, stream­ing matches on­line and broad­cast­ing them on TV on Fri­day nights.

Valve, CS:GO’s de­vel­oper, owes the game’s suc­cess to “skins,” dec­o­ra­tive vir­tual weapons bought through a lottery-like process run by Valve and traded among play­ers or sold for real-world cash. Valve added skins to CS:GO in 2013, about a year af­ter its re­lease, and the game’s pop­u­lar­ity soared. (It’s sold 21 mil­lion copies, tak­ing in $567 mil­lion in rev­enue, since its de­but.)

Zynga, Riot, and other game mak­ers also sell vir­tual goods for use in their games. While those com­pa­nies have put up bar­ri­ers to pre­vent peo­ple from cashing them out for real money, Valve has cre­ated soft­ware that helps in­de­pen­dent web­sites fa­cil­i­tate skin trad­ing and sales. When­ever CS:GO skins are sold, Valve col­lects 15 per­cent of the money. Partly as a re­sult of Valve’s sup­port, the skins have be­come the cur­rency of choice for a thriv­ing gam­bling mar­ket. A slew of in­de­pen­dently run web­sites now ex­ists to let peo­ple wa­ger skins on the out­comes of pro CS:GO matches or on casino-style games and lot­ter­ies.

“Noth­ing about Counter-Strike is about the game any­more,” says Moritz Mau­rer, head of e-sports in­tegrity at gam­bling watch­dog SportIM. “It’s all about bet­ting and win­ning.”

Re­searcher Eil­ers & Kre­j­cik Gam­ing es­ti­mates that more than 3 mil­lion peo­ple wa­gered $2.3 bil­lion in skins on the out­come of e-sports matches last year. Un­reg­u­lated gam­bling on sports is il­le­gal al­most every­where in the world, and some lawyers say this cer­tainly qual­i­fies. Valve didn’t re­spond to re­quests for com­ment for this story.

At any given time, there are about 380,000 peo­ple play­ing CS:GO. Sven, a Dutch 16-year-old, is typ­i­cal. He and his friends play and watch pros play on­line. Sven says he tried skins gam­bling af­ter a friend told him peo­ple were mak­ing tens of thou­sands of dol­lars do­ing it, and his in­ter­est in CS:GO has shifted. “Ever since I have been bet­ting, I have been play­ing less, since I want to fol­low the matches,” he says. “You’re re­ally hyped and hop­ing that your team will win. Ev­ery kill they get, ev­ery round they win, you get way more ex­cited.”

Sven gam­bles skins on an in­de­pen­dent web­site called CSGO Lounge, which Web an­a­lyt­ics com­pany Sim­i­larWeb ranks among the 700 most pop­u­lar web­sites in the world. (Thirty-eight mil­lion peo­ple vis­ited the site in March, al­most five times the traf­fic of pop­u­lar bet­ting web­site Bo­vada.lv.) Like most skins sites, CSGO Lounge pro­vides scant in­for­ma­tion about its own­ers, user pro­tec­tions, or how it com­plies with gam­bling laws. Sven says he’s un­per­turbed. “I fully trust this site since ev­ery­one in the com­mu­nity uses it,” he says. “It’s even been rec­og­nized and helped by Valve.”

Based in Belle­vue, Wash., Valve

“Ever since I have been bet­ting, I have been play­ing less, since I want to fol­low the matches.” ——Sven, 16

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