ESPORTS BETTING
Competitive video gaming’s roots can be traced back to 1980, when Atari staged the inaugural Space Invaders Championship in the US, which attracted over 10,000 eager button bashers. Nowadays, eSports, as it’s known, is a multimillion-dollar global industry with professional ‘athletes’ idolised by besotted fans like sports superstars in sell-out arenas. One of the most popular games, League of Legends, attracts some 27 million daily players, while other online gaming megahits like StarCraft II, Dota 2, and Counter-Strike Global Offensive (CSGO) also draw millions of players around the clock.
Where there’s competition, betting is bound to follow. As well as dedicated eSports betting sites like Unikrn, a slew of bookmakers now price up pro matches, which has triggered the emergence of ? eSports affiliates. The affiliate programmes are often a mixture of CPA and revenue share, roughly the same percentage as sports betting, says Mark McGuinness, co-founder of betting portal eSportsbet.com. “There hasn’t been a distinct CPA level or revenue share for eSports traffic as of yet, simply because the KPI’s for the operator in terms of the lifetime value are still evolving,” he says. “Through time, I fully expect this to change as more betting operators start to offer more betting markets on eSports.”
The catalysts for the growth in eSports betting were partly ‘skin betting’ sites DotaLounge.com and CSGOLounge.com – where users gamble in-game items that have real-world monetary value – and live gaming streaming service Twitch. Indeed, Eilers Research has predicted that $23.5bn will be wagered on eSports by 2020, up from an estimated $250m in 2015. Meanwhile, Pinnacle Sports – a trailblazer for eSports wagering – reached a million eSports bets in 2014. Betway, which has built an eSports microsite, says it’s regularly in its top 10 markets for turnover on a daily basis. “Viewing figures for eSports are increasing at an incredible rate and the betting interest is growing rapidly,” says spokesman Alan Alger. “It’s only natural that operators will want to grab a slice of the action.” The largest wager Betway has accepted is €4,000, while most bets tend to come from customers in northern Europe.
eSports has the potential to reach millions of new customers for mainstream online gaming operators” Mark McGuinness, co-founder of betting portal eSportsbet.comFormer semi-professional gamer and ex-Paddy Power employee Luke Cotton recently launched CSGObetting.com, which is purely a resource for gambling on CSGO. The site, which includes detailed bookmaker reviews and match previews, naturally ranks well on CSGO betting searches, and he plans to roll out a network of affiliate sites for the most popular games. Cotton says affiliates need to be cognisant of the fact that players like different games. A StarCraft fan might not be interested in CSGO and vice versa. “That’s like saying because I like football, I like tennis,” says Cotton. “It might be true for some people but it’s definitely not true for all.”
The world of eSports may seem esoteric to outsiders, but affiliates shouldn’t belittle audiences, Cotton warns. They also need to be au fait with the intricacies of the different games. “eSports fans are very unforgiving of people who are trying to take advantage of them and their industry,” he says. However, they tend to be in their early twenties and don’t tend to be traditional sports bettors or casino players, so they often won’t have betting accounts. “We see them as different,” says Cotton. “We don’t necessarily see them as people who have accounts with Bet365, William Hill or Paddy Power, or who are betting on sport elsewhere.”
History has shown us that eSports is more than a short-lived craze, and live streaming of games to huge audiences has helped to spread its appeal to an even wider audience. “eSports is more than just a fad as some industry observers have mooted,” says McGuinness. “It’s both digital entertainment and a gambling opportunity, and it has the potential to reach millions of new customers for mainstream online gaming operators.” So, game on rather than the dreaded game over for this burgeoning betting product.
BITCOIN GAMBLING
An oft-quoted stat is that approximately half of all bitcoin transactions globally are for the purposes of gambling. The accuracy of this percentage is open to debate, but there’s no escaping the fact that hundreds of online gambling operators specialising in bitcoin and other crypto-currencies, or Altcoins, have sprung up over the past few years. For the player, gambling with a digital currency like bitcoin has a number of benefits over fiat currencies. First off, players can sign upwith just an email address. Also, transactions are anonymous, which means no onerous KYC checks, deposits and withdrawals are almost instantaneous, and the games on offer are provably fair.
Bitcoin gambling – be it casino, dice or sports – has been attracting a steady stream of affiliates, though it’s still a hugely underserved segment compared to fiat currency wagering. Due to the fact that bitcoin transactions are anonymous, affiliates could repeatedly perform spurious referrals, which means CPA deals are non-existent. Instead, revenue share based on a player’s betting turnover is the preferred arrangement. “Although it [anonymity and no KYC] removes the possibility of CPA, it takes away a large amount of friction in the conversion process, which causes such high dropout rates with government currency operators,” says James Canning, a bitcoin gambling consultant and founder of bitcoin betting resource bitedge.co. Also, affiliate commission payments are made in real time, eschewing the need to wait until the end of the month.
That said, Canning bemoans the fact that the quality of affiliate programmes often leaves a lot to be desired. “These are new operators and there is no standard affiliate software like Income Access or NetRefer, so the operators have hacked together their own inferior affiliate programmes as afterthoughts. However, this is improving fast and soon enough Income Access and NetRefer will add bitcoin support, making it a moot point.”
Besides fears that wallets could be hacked and bitcoin stolen, as well as links to illicit transactions on the dark web, such as the now-defunct online narcotics bazaar Silk Road, price volatility continues to stymie its mainstream adoption. Bitcoin’s price graph in late 2013 resembled a white-knuckle rollercoaster ride; it rocketed to ??$1200 before crashing to $250. It was stable, between $200 and $300, for much of 2015, before experiencing a sudden surge and slump in the autumn. Purchasing bitcoin is a gamble in itself.
One advocate of crypto-currency gambling is self-confessed libertarian Nick Garner, founder of SEO agency 90 Digital and former head of search at Unibet, who recently launched his own Softswiss-built bitcoin casino, Oshi.io. He suggests bitcoin and betting make natural bedfellows, adding: “Gamblers know that what are doing is not that accepted by polite society, so it’s a bit like a drug addiction. They want privacy and bitcoin can deliver that.” He says users, who he describes as “very savvy” and “amazingly knowledgeable”, often frequent bitcoin gambling forums and Reddit, rather than relying upon Google rankings and affiliate review sites to tell them where to bet, unlike your average fiat currency gambler.
Furthermore, the frictionless nature of bitcoin gambling (apart from first converting fiat currencies to bitcoin) means money can slosh around very easily. Garner says people will road test numerous gambling sites and stick with the one – or the few – they prefer. “This means that you will see a very small number of sites ruling bitcoin. For affiliates, it means there are probably only going to be three or four casinos worth them pimping out. It is then winner takes all, which you always get in frictionless ecosystems.” Nevertheless, he says bitcoin has a bright future. “It has got past the stage where it could have been made extinct. The most fragile time for anything is in its first period of growth,” he says.
As for Canning, he describes becoming a bitcoin gambling affiliate as the best career decision he’s ever made.
Season-long blogs with a good audience are in a great position to become successful affiliates for daily fantasy sites” Viktor Enoksen, co-founder of FantasyBetDAILY FANTASY SPORTS
The rise of daily fantasy sports in the US has been rapid and stratospheric, creating a hard-to-miss industry offering one-day and week-long game formats that have been described by some as the crack cocaine of fantasy sports. Although this fledgling industry has encountered significant headwinds of late around its legality in many states, DFS firms have begun springing up in Europe, raising the prospect of these fast-paced contests taking hold. In the UK alone there are around 5 million season-long fantasy football players, with 3.5 million of these participating in the free-to-play official Premier League competition. Quite clearly, there’s an appetite.
Fantasy football’s popularity has given rise to numerous websites and blogs dedicated to team selection advice, injury news and transfer gossip. Some already display bookmaker banner adds, so promoting DFS operators could provide an additional revenue stream. “Season-long blogs with a good audience are in a great position to become successful affiliates for daily fantasy sites,” says Viktor Enoksen, co-founder of DFS startup FantasyBet. “Even more, they have a vital part to play in building trust among punters in daily fantasy, and getting established season-long fantasy blogs involved can only increase the speed of which daily fantasy becomes mainstream in the UK.”
US market leader DraftKings is due to launch in the UK after obtaining a remote pool and gambling software licence, while main rival FanDuel has stated its intention to apply for a software licence. FanDuel CEO Nigel Eccles has said that 10 years from now it’s possible that just 40% of revenues will be derived from the US. Yet one conspicuous issue facing those operators yet to throw their hats into the ring is that betting on sports is legal and widespread in UK. It’s a heavily saturated market.
It’s partly this problem that leads David Clifton, director of Clifton Davies Consultancy, to doubt whether DFS can make a meaningful impact. “The main reason is because, unlike in the US, the UK has a very long-established and well serviced sports-betting market that can now provide an even more immediate experience for consumers. For example, by placing bets directly on in-game features. No ‘substitute’ is needed for sports betting in the way that it is in the US. Why bet on something virtual when you can bet on something real?”
It’s a fair point, but if deep-pocketed operators like DraftKings can flex their marketing muscle and convert a chunk of traditional fantasy football players, as well as attract sports bettors, they could carve out a decent market share and help to grow this nascent industry. It could potentially snowball – possibly into other sports like rugby and cricket – and create greater opportunities for DFS affiliates. “DFS is a social game,” Enoksen explains. “And it becomes more fun if you get friends to play, enabling social growth. This is not the case for most other forms of online betting. But I don’t think daily fantasy in the UK will follow the exact same path as daily fantasy in the States, and it is up to us operators to carve the way in the UK.” So while there’s opportunity for DFS affiliates, the jury is still out as to whether it will become the next big thing or just a damp squib.
