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Esports Betting in the UK
Ever since the Gambling Act of 2005 passed into UK law, thereby providing licensing to and regulating the activities of any company wishing to offer gambling services to people in the UK, real-money gambling has enjoyed relatively high levels of popularity within the United Kingdom. Which is why we continue to see ever-increasing numbers of online casinos in the UK as the industry scrambles to meet the demand of this well-regulated market.
Recent research by the UK Gambling Commission – the Government body charged with ensuring all gambling in the UK is undertaken in a fair and transparent manner – shows that around half of the adult population are accustomed to gambling and partake in it regularly. The same study showed that the number of people in the UK who are gambling online has risen to 17%, despite being only 9.7% in 2008 (UK Gambling Commission, 2015), and the indications are that it has continued to rise since then.
Over the same period of time, the casino sector – both offline and remote – has been a dominant force in the UK gambling industry, along with the other big hitters that are sports betting and poker. But there’s a new kid on the block, and it’s taking the gambling industry by storm: esports.
A multiplayer online battle arena game in which you control a Champion imbued with special abilities. Has a large following and widely considered as a classic title in competitive gaming.
A modified version of Half-Life, abbreviated CS:GO, this competitive first-person shooter (FPS) has been played at LAN tournaments since long before esports rose to prominence.
A modified version of Warcraft 3 where your Hero works with your team to destroy your opponent’s ‘Ancient’. Very popular with online viewers – thousands tune in to watch streams daily.
A fighting game allowing you to choose from a varied arsenal of characters, each with their own strengths and weaknesses, and then beat your opponent with them.
Team-based multiplayer online first-person shooter video gam. The second most popular game of 2017 (only CS:GO had higher player numbers), with over $1.5m given out in prize money.
The quintessential football/soccer video game. Popular with casuals and uber-competitive players alike, this game will always get the crowd and players shouting.
Esports is the term given to highly competitive video games, usually played in tournaments. These tournaments pit the best players of certain games from around the country, and sometimes the world, against each other – in front of a large crowd of cheering spectators. Quite often the participants are professional esports players – that is to say, they play for a living, funding their lifestyle with prize money, sponsorship deals, and monetisation of social media platforms such as YouTube channels and Twitch streams. What Games Are Popular? There is a wide variety of games that are played at esports tournaments (Wikipedia contains a very useful list of esports games here), but five of the most commonly found ones are:
How Big Is eSports?
The short answer to this is ‘very’. And it is growing at an extraordinary rate, with an expected year-on-year growth of just over 40% resulting in estimations that the industry will grow to be worth $1488 million by 2020 (Newzoo, 2017). That is without even taking esports betting into consideration. It’s not surprising that huge corporations have seen the opportunities that esports can provide.
These are some big numbers – and they don’t even include money made through esports betting.
For example, US telecom giant AT&T recently acquired Time Warner for $109 billion – which does not seem relevant until you know that in the same week Time Warner, in turn, acquired Machinima, ‘an active player in the development and sale of content formats around esports’ (Newzoo, 2017).
When you also consider that Turner, another Time Warner subsidiary, is the operator of a small empire of esports channels such as the ELEAGUE, it begins to become clear why AT&T saw enough potential in this industry to justify such a large investment.
Football (soccer) leagues throughout Europe are also getting in on the act, with FIFA leagues already formed in France, Spain and Holland to mirror their real-life counterparts. Paris Saint-Germain helped to found the e-League 1, and has even expanded into supporting teams of other games such as League of Legends. Paris Saint-Germain have recruited several esports gamers in order for them to represent the club at esports tournaments and events. The involvement of real football clubs such as Paris Saint-Germain only helps the growth of both the esports betting and gaming industry which creates more esports jobs and this can only be good for the industry as a whole. Furthermore, the global reach of professional football clubs is massive, hence why global companies are tripping over each other in order to get on the front of the jerseys of major football clubs. Football will certainly assist in the growth of the esports industry.
Esports betting and gaming is by no means a western phenomenon, Russia’s third richest man and oligarch Alisher Usmanov invested $100 million into Russian esports team Virtus Pro in 2015 whilst Asian countries such as China and South Korea regularly sell out stadiums that host esports events in a matter of hours. Beijing’s national stadium ‘The Bird’s Nest’ with its 80,000 person capacity was quickly sold out for the League of Legends World Championships. The popularity in terms of playing and watching esports is massive all around the world. The esports betting market also continues to grow year after year.
Esports In The UK
The size of the UK esports audience is expected to reach 8 million people by 2019, assuming a 7.5% year-on-year growth (UKIE, 2015). Game, the largest gaming retailer in the UK, recently acquired Multiplay – founders of the hugely popular consumer event Insomnia, and highly experienced players in the esports industry – for £20m (Parfitt, 2015).
Esports is even making inroads into mainstream media. ‘Ginx esports TV’, the UK’s first 24-hour TV channel exclusively showing esports coverage and content was launched in 2016 (BBC, 2016). The channel is available on Sky and Virgin Media and offers a wide range of programming.
Competitive FIFA esports gamers are even being snapped up by professional football (soccer) clubs in the English Premier League. West Ham United and Manchester City were particularly fast out of the blocks (BBC, 2016), keen to establish themselves on a new and exciting stage early on in its development. The players are sent to esports tournaments representing the club, as well as competing against fans of the team with prizes available to anyone who can defeat them. Through esports betting, fans are able to bet on the outcome of competitive FIFA esports matches, making FIFA esports not too dissimilar from real life football.
Who Watches Esports?
According to statistics collected in 2016, the typical ‘esports enthusiast’ is male, aged under 35 years old, with a full-time job (Newzoo, 2017). This is not altogether surprising, as video games have long been catering to a primarily ‘young male’ target market, but the signs are that more and more females are showing interest in esports games, particularly in the 21-35 age bracket. There is also a variety of female only esports teams, particularly in Counter Strike:Global Offensive, certainly the amount of female esports gamers will grow in the coming years.
All in all, the esports enthusiast market is a very appealing one for marketers of big brands as they are likely to have relatively high levels of disposable income compared with other demographics. They will hope that this disposable income will contribute towards esports merchandise and games as well as esports betting and stadium seats.
The Esports ‘Athletes’
Esports has provided young video gamers from around the world the opportunity to work and earn money as professional esports gamers or, as they are now more predominantly known: esports athletes.
The best of the best esports athletes are able to earn six and sometimes seven figure sums over the course of their careers. There are a variety of esports games that can be played by esports athletes, however, the highest earning esports athletes come from the world of Dota 2 as well as from League of Legends and CS:GO.
As aforementioned, esports earnings can number into the millions of dollars. The highest earning esports athlete is currently Kuro Salehi Takhasomi – better known as KuroKy. KuroKy (pictured right) is a 25-year-old professional Dota 2 player hailing from Germany and has esports earnings to the tune of $3.5 million. (esportsearnings.com)
Of course, there are now hundreds of millions of esports gamers in the world so it should not be surprising that very few come close to earning even 0.5% of the winnings that KuroKy has to his name.
Other notable esports athletes with considerably high esports earnings include; Sumail ‘SumaiL’ Hassan a Dota 2 player competing for Evil Geniuses The legendary South Korean League of Legends player Lee, Sang Hyeok aka ‘Faker’ who is considered by far and away the best LoL esports player in the world. As well as Gabriel ‘FalleN’ Toledo – a CS:GO player from Brazil who has amassed esports earnings close to $1 million.
It goes without saying that no esports athlete is allowed to bet on themselves or their own team. There has been various scandals involving esports betting and athletes placing wagers on their own teams to lose in some cases. There is a strict no tolerance rule surrounding this. If athletes are found to be in violation of esports betting rules, they’re given hefty punishments – usually life time bans.
How Does Esports Generate Revenue?
This very helpful visualisation shows the global esports revenues from 2017 (Newzoo, 2017):
As you can see, esports benefits from a number of lucrative revenue streams, with sponsorship and advertising providing the lion’s share (60%) – demonstrating a highly competitive marketing arena with brands queuing up to get their name in front of legions of esports enthusiasts and players.
As with almost all forms of gambling, esports betting can take many different forms. Most of the odds you find will be decimal, but operators offer fractional odds too. The odds work in the same way as in other forms of betting – the lower the number, the more likely that player is to win. These are the types of bets you can choose from:
- Standard – i.e. Team Yellow to win vs. Team Blue
- Futures – i.e. Team Yellow to win the tournament/event
- Propositions – i.e. Team Yellow to win 5 games in total
- Accumulator – i.e. Team Yellow and Team Blue to win in the first round
As you can see, in terms of the bets available, esports betting is not so different from ‘normal’ sports betting on horse races or football. The biggest differences are who is betting and what they are betting with.
As esports ‘is unquestionably an activity that has a large following of children, who both watch and actively take part, either through playing the underlying games casually or in events and competitions’ (Gambling Commission, 2017), then the industry has a responsibility to proactively prevent any underage esports betting from taking place. The UK Gambling Commission is not overly concerned by this, as licensed betting sites ‘are required to have in place controls to prevent underage gambling’ (Gambling Commission, 2017).
However, the Gambling Commission is concerned that unlicensed sites are able to provide under-18s with access to the most predominant form of in-game item gambling (Gambling Commission, 2017) – commonly referred to as ‘Skin gambling’. Skins are used within the game to cosmetically alter a player’s on-screen avatar, or the equipment used by it, but theoretically does not afford the player any extra advantages. With that being said, Skins can be purchased for real money, and therefore it can potentially have real money implications when a player loses their entire Skin inventory. The Gambling Commission will be exploring ways to deal with these issues in the coming years.
eSports Betting vs Casino Games
So how does the up-and-coming esports scene stack up next to the UK’s booming casino industry, with its hugely popular games such as online Slots? We will use the online numbers to ensure a fairer comparison. Remember you can always head over to our homepage to find a list of the best online casinos UK players can access.
- Online casino games generated £2.4bn in the UK from October 2015 – September 2016 (Gambling Commission, 2016).
- Esports betting generated revenue $168.9m globally in 2015, however this was only 23% of its total revenue – $748m (UKIE, 2017).
- Most Esports viewers are male, aged 21-25 (Newzoo, 2016)
- This is similar to online casino demographics, higher percentages of which were males ages 18-34 (UK Gambling Commission, 2015)
- The number of global viewers tuning in online to watch esports and esports tournaments regularly runs into the tens of millions
As you can see from the graph below, in 2014 the most watched esports event was The International, with 20 million viewers. That has more than doubled in three years, with the viewership of the Intel Extreme Masters Katowice 2017 hitting 46 million viewers.
The closest thing that casino games has to compare with this would be live dealer Twitch and YouTube streams, but these are are nowhere near the same level – likely because esports games are more ‘skill-based’ than games like Roulette or Blackjack.
There is so much demand for this type of viewing content that in the UK, esports has broken into one of the mainstream sports channels, with BT sport broadcasting games from the FIFA Ultimate Team Championship Series (The Guardian, 2017).
Casinos And eSports Betting
So it is clear that esports is competing with the casino industry, among others, for a larger proportion of the total remote Gross Gambling Yield in the UK. However, the rise of esports and esports betting does open up new opportunities for land-based casinos, some of which are already being explored in the US.
A former nightclub at the Luxor Hotel and Casino in Las Vegas is already being converted into a purpose-built esports contest venue as ‘U.S. casinos are turning to video-game competitions to attract younger visitors and turn around years of subdued growth’ (Wall Street Journal, 2017). It has been hypothesised that this will be an effective technique for bringing in more customers who fit the ‘millennial’ description – namely, esports gamers and fans under-30 who prefer the concept of skill-based games more compelling than chance-based games like Slots. The casinos are presumably hoping that players and spectators will then convert to table games (Rock, 2017).
Even quicker off the mark was the Tropicana in Atlantic City, who hosted a regional esports tournament in May 2017 with a prize pot of $10,000 and around 500 participants (Tropicana Atlantic City, 2017). And it doesn’t stop at tournaments either; Fifth Street Gaming Chief Executive Seth Schorr has set up properties in Las Vegas offering training facilities for esports teams (Huba, 2017).
One of the pioneers in this regard is the CMO of Gamblit Gaming Darion Lowenstein. His company recently announced its brand-new esports platform, and hopes that enticing the ‘millennial’ demographic by hosting esports tournaments will breathe new life into many Las Vegas casinos, stating: ‘with our interactive, skill based and social games, people can have an experience more similar to a modern video game arcade while still enjoying the thrill of wagering with each other’ (McCarron, 2016).
If these types of events are successful in engaging the next generation of players, it can surely only be a matter of time before land-based casinos in the UK begin to follow suit. Land-based casinos will be hoping that they can persuade esports betting millennials to turn their attention towards casino games.
Working Within the World of Esports
Esports is more than just an entertainment sport. The industry is a business – a business which is thriving. Esports has created a vast number of different jobs and these esports jobs are not just limited to the esports athletes. Journalists dedicated to covering esports events now exist. The industry is also regularly commented on and written about in a variety of different newspapers, websites and magazines. From football editorials to the Wall Street Journal – everyone is talking about esports.
Other esports jobs that have been created include: Twitch streamers, match commentators, coaches and photographers among many others. One quick Google search of ‘esports jobs’ and you will find an almost endless list of esports job opportunities within the ever expanding esports industry. Thanks to the esports betting market, you could even become a professional esports wagerer, if you know your stuff that is.
If working in the world of esports is something that you are interested in getting involved with then you will be stepping into a modern, ever-evolving and exciting industry. Due to the increasing popularity of esports, there are plenty of esports jobs available which are able to offer the opportunity to work in a super modern and exciting industry. Esports job opportunities are aplenty even if you are not an avid video gamer.
So, with everything we have discussed in mind, here are our thoughts on what the future may hold for esports and their relationship with the casino industry.
All of the indications seem to be that esports is set to continue its rapid growth for the foreseeable future – Newzoo estimate that revenues not including esports betting will reach nearly $1.5 billion by 2020 (Newzoo, 2017). Online casino gaming is also enjoying a prolonged renaissance, with mobile device players in particular leading the charge, as well as players who were previously nervous to commit real money to playing online being emboldened by the increasing prevalence of PayPal casinos in the UK.
In the UK, there is little concern in the esports industry that there will be further regulation constraints applied, following the Gambling Commission’s assertion that ‘although some respondents consider there may be heightened risks associated with esports betting compared with other betting events, our view is the existing regulatory framework, rigorously applied, is sufficient to mitigate these risks’ (Gambling Commission, 2017). Whether this will change in the future, particularly when it comes to so-called ‘skin betting’, remains to be seen.
The UK has the opportunity now to carefully observe the levels of success experienced by the various Las Vegas establishments who are moving to embrace the esports revolution. If they turn out to be successful, it is surely only a matter of time before land-based casinos in the UK begin to follow suit. The UK boasts some of the hottest esports talent in the world – if this technique succeeds in enticing an entirely new generation of players into casinos and boosting casino game interest to the levels it enjoys with older demographics, it won’t take much for the large chains such as Grosvenor and Genting Casino to jump on the bandwagon.
Esports Earnings, 2018. Highest Overall Earnings. [Online]
Available at https://www.esportsearnings.com/players
[Accessed 16 April 2018]
Gambling Commission, 2016. Gambling industry statistics. [Online]
Available at: http://www.gamblingcommission.gov.uk/PDF/survey-data/Gambling-industry-statistics.pdf
[Accessed 02 August 2017].
Huba, N., 2017. Could esports attract millennials to casinos?. [Online]
Available at: http://www.pressofatlanticcity.com/news/breaking/could-esports-attract-millennials-to-casinos/article_4a6b5651-8e3a-5915-8011-3291f56c9439.html
[Accessed 04 August 2017].
Newzoo, 2016. The UK eSports Audience 2016. [Online]
Available at: https://newzoo.com/insights/infographics/uk-esports-audience-2016/
[Accessed 03 August 2017].
Newzoo, 2017. 2017 Global eSports Market Report. [Online]
Available at: http://resources.newzoo.com/hubfs/Reports/Newzoo_Free_2017_Global_Esports_Market_Report.pdf
[Accessed 02 August 2017].
Parfitt, B., 2015. GAME acquires Multiplay for £20m. [Online]
Available at: http://www.mcvuk.com/news/read/game-acquires-multiplay-for-20m/0145947
[Accessed 02 August 2017].
The Guardian, 2017. [Online]
Available at: https://www.theguardian.com/football/2017/feb/23/fifa-17-gaming-matches-broadcast-live-television-first-time-bt-sport
[Accessed 04 August 2017].
UKIE, 2017. UK Games Industry Fact Sheet 07 July 2017. [Online]
Available at: https://ukie.org.uk/research#fact_sheet
[Accessed 02 August 2017].
Wall Street Journal, 2017. Casinos Get Into the Esports Game. [Online]
Available at: https://www.wsj.com/articles/casinos-get-into-the-esports-game-1491926525
[Accessed 04 August 2017].