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”
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
“Ever since I have been betting, I have been playing less, since I want to follow the matches.” ——Sven, 16
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
is revered in the video game industry. It makes a handful of popular games, including the Defense of the Ancients (DotA) series, and runs Steam, an online marketplace that’s to PC gaming what Apple’s App Store is to smartphone apps. The private company doesn’t release its sales, but researcher PrivCo estimates it made a profit of $325 million in 2013 on $1.6 billion in revenue.
At Valve’s 2014 developers’ conference, employee Kyle Davis said the company had determined the best way to get players deeply engaged was to give away virtual items of random value and encourage exchanges. “This is not an accident. This is by design,” Davis said. “We see more blogs popping up and more and more e-mails from our players saying, ‘I’m not really sure what happened, but I’ve been playing DotA for the last week or two, and I made $100 selling these items that I got.’ This is hugely successful for us.” He declined to comment for this story.
On the gambling sites, users with names such as Bulletpoint and Ravenouskilljoy stake skins on pro matches. A typical match draws about $134,000 in skins wagers on CSGO Lounge, according to SportIM; a March contest between teams Luminosity and Fnatic drew almost $1.2 million. There are also ways to wager skins that have nothing to do with CS:GO contests. One website runs multiple lottery-style contests per minute, where a player’s odds of winning rise with the value of the skins wagered. Another website operates a similar game that looks like roulette, except that players are paid in skins.
The sites are run independently but use Valve software. Valve employees have given CSGO Lounge technical support, says Courtney Timpson, a Lounge community administrator and spokesman. The Valve logo is prominently displayed on the gambling site, and in one post on its forum, a moderator tells users—especially the “younger audience”—what to do if they think they’ve been scammed: “If something is wrong, don’t post on the forums,” the mod writes. “Contact Valve/Steam.”
The growth in skins gambling tracks the popularity of e-sports. Millions of people, especially boys and men under 25, spend their free time watching other young, headset-wearing players furiously type and click their way through online battles. Fans of traditional sports should recognize the basic structure. There are teams, leagues, sponsorships, media deals, and, increasingly, money. Turner Broadcasting and its partners, which didn’t respond to requests for comment, are looking to e-sports to attract an audience that typically isn’t watching much basic cable. They’ve built their strategy around CS:GO.
Skins betting has the potential to undermine the integrity of pro gaming competitions. Last January tech website the Daily Dot broke the news that a CS:GO team named iBUYPOWER threw a match it was heavily favored to win. Players were paid in skins, via CSGO Lounge. Valve contacted CSGO Lounge to ferret out the bad actors, according to Timpson. In the end, Valve banned seven players from events it sponsors and forbade pro players and staff from gambling on matches, associating with highvolume gamblers, or sharing inside information. It didn’t take any public action against the gambling sites.
In the U.S., sports betting is illegal in 46 states. So far, Valve and the skins sites have avoided legal scrutiny. CSGO Lounge tells players to adhere to local gambling laws but does nothing to ensure they do so, and more people visit the site from the U.S. than any other country but Russia. “There’s no doubt that regulators will catch up with them, and