Before this year, the idea of putting money down on competitive video gaming mostly consisted of friendly wagers between friends or bets booked on chats or internet forums.
But suddenly, eSports wagering is a huge business. Following closely on the heels of real-money daily fantasy sports for eSports, the website UNIKRN launched to allow people to book bets on the outcome of eSports matches.
UNIKRN and its CEO, Rahul Sood, believe that betting on eSports will help expand the rapidly growing market.
“The goal for building UNIKRN and bringing betting in is to bring mainstream viewers to gaming, to eSports,” Sood said in a recent interview with Legal Sports Report.
How likely is that to happen, in the U.S. and elsewhere? Based on the trajectory of the market, it seems like a pretty good bet.
A quick ascent
The vertical for internet gaming in eSports has exploded quickly. First, a few sites launched earlier this year based on the idea of daily fantasy sports, led by Vulcun. Just months after launch, the site went from what appeared to be a fairly niche outlet to one offering millions of dollars in prizes this year; Vulcun also raised $12 million in funding just last month.
The idea of sports betting on eSports gained traction at almost the same time, as UNIKRN (pronounced “unicorn”) has raised $3mm already.
The startup is led by Sood, who founded Voodoo PC and led Microsoft Ventures before launching UNIKRN. When he talks about his new venture, he speaks with an enthusiasm of someone who is invested personally in its success. He mentions being a gamer at heart and wants to see eSports be on par with the NFL and other major sports in terms of popularity.
“We’re in this really interesting space, the convergence of eSports with mainstream is pretty significant,” Sood said. “I have been involved in gaming for a very long time — I was a gaming entrepreneur since the beginning of the gaming PC, so to see where it’s at now, it’s pretty awesome.”
‘The idea for us, bringing betting into it and being able to create a live environment where people can gather, game, bet, collaborate, learn about the games … it’s a way to increase engagement. We thought that if we did this in a a proper way — proper meaning legal, making sure we’re well-backed, making sure we have the right partners, and bringing the gaming DNA we have to the space, we’d be successful.”
If the idea of avenues of fan engagement sounds familiar, it’s because it’s a drumbeat that we’ve been hearing in the industries surrounding traditional team sports in recent years. DFS and sports betting are looked at as ways to increase interest.
And UNIKRN entered the market during heady times for eSports. Sood says more than 200 million people watch eSports. Amazon bought the live-streaming video service Twitch — which mainly focuses on video games — for nearly a billion dollars last year. The term eSports is now officially in the dictionary; and ESPN aired an eSports competition for the first time just last month.
Like any major sport, it seems almost natural that betting on it would follow.
At the start
Sood, couldn’t give out exact numbers of users, or the site’s handle over the first week-plus of operation. But he did offer that thousands of people registered over the first week and that he was pleased with how many participated or booked a bet at the site.
UNIKRN started out offering to book bets on League of Legends contests in late April, but already it’s added betting on Counter-Strike: Global Offensive just last week. There are plans to offer action on other games, including DOTA 2 and Heroes of the Storm, soon.
At launch, UNIKRN was only available to residents of Australia. But, because of a partnership with Tabcorp, UNIKRN has access to global gaming licenses, and it’s anticipated that it will be available in new jurisdictions in the coming weeks and months, including Europe.
Of course, that does not include the United States, where sports betting is generally not legal. That’s where it differs from its cousin, daily fantasy sports, which generally is considered legal around the country. Perhaps tellingly, though, the company is based in the United States, in Seattle. Sood believes it’s a matter of when, not if, sports betting becomes legal in the U.S.
“We think that betting on sports will be legal in the U.S.,” Sood said. “If we’re going to bet on it, I would say we’re probably within two years.”
And, not surprisingly, Sood is a fan of NBA commissioner Adam Silver, who has been outspoken in calling for legal sports betting in the U.S.
“He is a big proponent for it, he’s super smart,” Sood said. “He has for the exact right idea, that the U.S. government is missing out on major tax revenue on this. It’s just dumb (that sports betting is illegal). And people are doing it (betting) anyway.”
Sood notes that UNIKRN is going about things totally above aboard and in a legal way — the site takes measures to prevent people within the U.S. (and other jurisdictions) from placing a bet.
Setting the line
Taking bets on eSports is obviously a new idea, but UNIKRN isn’t necessarily reinventing the wheel from conventional sports betting. Sood says there are real people — in-house oddsmakers — working in tandem with an algorithm that helps set an accurate opening line. UNIKRN factors in the history of the players, the track record of different teams and its personnel’s overall knowledge of the games being booked in order to set odds.
After the opening line is set, the odds are handed over to Tabcorp, and its platform adjusts the odds in real time, based on the bets that are being taken. Bets are taken both via UNIKRN’s website and through Tabcorp’s Luxbet platform, which includes a mobile app.
Like in other sports, some worry that introducing betting to the equation increases the potential for match-fixing, but Sood dismisses that as a widespread problem moving forward.
“We’re dealing with professional tournaments, we’re dealing with tournaments where (players) have a lot more on the line than bets,” Sood said. “Their careers are on the line, these are teams, they take it very seriously, because they’re getting major sponsorships from major companies. It’s actually bad for them to lose games like that.”
Sood also notes that UNIKRN can track anomalies and take bets off the board if something fishy is spotted; UNIKRN would also then report to eSports tournament organizers the anomalous betting data.
Money coming in on eSports is good for the industry
Despite the launches coming within a few months of each other, Sood says eSports betting and eSports fantasy aren’t really competitors. In fact, he says UNKIRN has an open dialogue with Vulcun about how they can collaborate in the market moving forward.
The ancillary markets of fantasy sports and sports betting might just signal yet another stage in eSports’ quick rise to prominence.
“The fact that we’re both involved is actually great for eSports, it just legitimizes the space, makes it bigger, and creates more interest,” Sood said.
Will eSports betting take off on a similar trajectory as eSports DFS? It’s a question that eSports and gambling industries will be interested to learn the answer to.