How Esports are Penetrating the Online Gambling Industry

Online gambling has been available since 1996, the year in which the first ever real-money online casino and the first online sportsbook launched. The implementation in 1994 of the Free Trade & Processing Act gave the nation of Antigua and Bermuda the right to grant the first licenses for online gambling, paving the way for software companies to develop online games that could be played for money with a chance of winning cash prizes. Microgaming launched the first online casino in 1994, but the first real-money play casino was introduced by online financial transaction specialists CryptoLogic two years later.

From these two companies sprang an internet phenomenon, starting the online gambling market which is predicted to reach a value of more than $94 billion by 2024. Today, the estimated 26% of the total global population who gamble can easily access a site and find almost every iteration of slots, card and table games that they would find in a brick and mortar casino, meaning an online casino is at an advantage as they can attract players with busy lifestyles who are looking for the convenience of being able to play from anywhere.

 Esports, or competitive computer gaming, has a much longer history, with the first recognised event being held in 1972. Competitive computer gaming remained popular throughout the eighties and early nineties, but it was with the widespread launch of the internet into people’s homes that eSports in its current format began to really take off. The Quake: Red Annihilation tournament held online in 1997 is largely regarded as the first official esports event. This was quickly followed by the formation of the CyberAthlete Professional League, one of the first and most popular computer gaming leagues. Esports may not quite have reached the heights of popularity of other forms of online gambling, but this niche market is still a rapidly growing industry. Revenue from esports totalled $869 million in 2018, but experts are forecasting that this will more than triple by 2022, with Goldman Sachs suggesting annual revenues for esports by this time of $2.96 billion.

 As esports become more popular and begin to appeal to a wider demographic, many online casinos are choosing to integrate them into their offering both online and within brick and mortar venues rather than compete. The once-niche market is growing at such a rapid pace that casino owners across the world are recognising the importance of adding esports to their portfolios. Esports as a genre is currently the world’s fastest growing sport in terms of viewing figures, making it clear that casinos offering esports gaming and betting will likely see in an increase in custom. Hundreds of millions of people worldwide now enjoy watching esports, while legislative impacts have resulted in a slight decrease in the global yield of the online gambling market. Combining the two therefore has the potential to improve online gambling participation and increase demand for online casino services. Multiple casinos and bookmakers have already added some esports facilities to their services both online and at venues, which have so far proven popular.

 Esports betting has a range of variations which draw in a wider demographic of people. The simplest is probably cash betting on esports events, which works in much the same way as cash betting on any other form of sporting event. Bettors choose who they think will win a particular competition and are given odds on their bet, allowing them to increase their wager should their prediction come to pass. “Skin” betting is another popular online format, where gamblers wager items that change the appearance of various in-game features, such as weapons or avatars, rather than cash money. The skins act as a quasi-currency and this type of gambling can only be used within certain games, although it is highly popular in some areas. Skin betting sites often increase the excitement by adding in versions of popular casino games such as roulette or blackjack as part of the experience.

 Fantasy esports are another arena altogether. Most fantasy esports games mirror traditional fantasy sports, with cash prizes for the players at the end of the game or season whose fantasy team has scored them the most points. Some of the top online fantasy sports sites also offer fantasy esports betting, usually under the model of salary cap selection. Gamblers can bet on their fantasy team for winning events in some of the most popular competitive computer games in the world, including Call of Duty, League of Legends and Counter Strike: Global Offensive.

 As with almost all things gambling-related, it is Las Vegas that is leading the way with esports integration into casinos. The Evolution Championship Series has been hosted in the Las Vegas Valley since as far back as 2005, taking place today at the Mandalay Bay casino resort owned by MGM. The world-famous Luxor resort on the Strip is now the home to one of the largest esports stadiums in the world – the HyperX Esports Arena has 30,000 square feet of space and has hosted top events on the esports calendar including the Capcom Cup and the League of Legends All-Star tournaments. The HyperX Arena is working to draw more gamers into the Vegas bubble, featuring retro gaming areas, VR platforms and nightly competitions for classic games including Mario Kart, Street Fighter and Rainbow Six.

 With top casino brands already getting in on the action, it seems likely that esports will soon become a regular fixture of the gambling service offering. High-profile partnerships and sponsorships are underway between some of the biggest names in each arena, promoting casinos to gamers and esports to gamblers. Cross-pollination is already occurring, with many casinos introducing slots and other games based on some of the biggest esports games, with elements of skill required to appeal to esports fans as well as traditional gamblers. If casino owners are accounting for the preferences of esports gamers, this indicates that those who are in the know realise that esports are here to stay.

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