Tabcorp's Esports Partner Says Children Are Betting On Video Games

There's people streaming a video game, and then there's people streaming themselves opening virtual items for a video game. It's a big deal in the world of Counter-Strike right now, because it raises one very important question. Should streamers who are just using a game as a vehicle for gambling not be moved into a separate section of Twitch or YouTube?

But the chief executive of Unikrn, whose company partnered with Tabcorp almost a year ago to extend the esports betting market available to Australians, says the issue is bigger. The proliferation of Twitch streamers advertising gambling to kids is getting them hooked, and it needs to be regulated.

In a post on his personal website and the Unikrn official blog, Rahul Sood warns against streamers who advertise the gambling of virtual items, such as weapon skins for games like Counter-Strike: Global Offensive. According to the CEO, not only could the streamers "might be breaking the law", they're creating an environment that encourages children to become involved with gambling.

"When my 13-year old son and his friends talk about skin betting it made me seriously uncomfortable. It’s wrong that a 13-year old kid can do this. That alone should be banned and regulated," Sood argues.

"The fact is that illegal betting is happening at a rampant rate, and it’s dangerous. Until all sports betting is legalized, there will be sites that spawn up and prey on young people everywhere."

Chris Grove, a senior consultant at Eilers and Krejcik Gaming, also announced that the global market for skin betting has grown substantially over the last 12 months. As part of an update to an Eilers Research report into gambling in esports, the market for skin betting in 2016 has grown to just under US$5 billion worldwide.

Total handle refers to the amount of money people have bet, not lost. The report, published in August last year and provided to Kotaku Australia, estimated that 2.3 million users would bet on esports last year, with that figure growing to at least 17.4 million active players by 2020.

"That's a big number, and it comes with some caveats," Grove explained. "Our projection is based on extensive data collection from a variety of sites, conversations with people in the industry, and modeling based on our experience with other online gambling products."

He added that the figure was a projection, one that assumes the rampant growth in skin betting will continue. "What we see in the data is a clear indication that people who play video games have an interest — potentially an intense one — in wagering using items from the games they play. That's a relatively new phenomenon, at least at this scale, and I think it carries implications for both the video game industry and the broader commercial gambling industry."

The 17.4 million figure was the firm's most conservative estimate. But even if that proved to be the case, Eilers still expected US$12.7 billion would be wagered on video games in 2020, making just under US$1 billion in industry revenue.

It's a massive market and one that, according to Sood, lacks the necessary regulation or protections to stop children from becoming involved. In a response over email, he confirmed to me that children betting on video games was "something that I have personally seen and know is happening".

"The fact is that illegal betting is happening at a rampant rate, and it’s dangerous. Until all sports betting is legalised, there will be sites that spawn up and prey on young people everywhere."


    Skin betting eh? I think I just realised how old I am... :-(

    EDIT: also, holy crap - "Oddly, just as in gambling at a casino, the skins are akin to casino tokens, which are indirect representations of real money and are indeed a part of the regulations surrounding gambling and casinos. So perhaps even this indirect betting could be considered actually illegal if brought to the attention of Law Enforcement or the Department of Justice."

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    Last edited 20/04/16 10:59 am

      yeah, although it me hit me yesterday when i realised that 1995 ( the year i started high school) was 21 years ago

        I graduated high school in 1995 :-(

          i was class of 2000.. because i was a dumb arse and had to repeat year 5

    This country's romantic involvement with betting and gambling has always been the biggest obstacle to video-games in this country reaching legitimised status.

    That industry is what's called the gaming industry in Australia, after all.

    If the video-gaming industry in this country wants to be a serious competitor on the world stage, then it must plan and be prepared when it receives bad press like this.

    Twitch answers to nobody, which is a shame. It has done more harm than good to video-games but as long as its making the big bucks nobody will lift a finger. It is similar to how publishers of 'mature-but-really-we're-aiming-for-13-year-old-boys' games have operated since the 90s.

    I had similar worries during the R18+ saga. Local video-game interests were right in what they were trying to achieve, the rating system needed an R18+ category - but you can't deny the fact it was also a lucrative and time-sensitive opportunity for all of them (the publishers right through to the distributors shipping the software) to make big bucks locally.

    What would the local games industry be valued at today if the major cash-cows couldn't be sold here?

    I hope that now it's flushed with cash, the local industry can show it can act professionally and with due diligence to its consumer base.

    Be responsible.

      yeah modern day companies do anything they can get away with, regardless

      Sorry, to be clear.

      Are you saying Twitch allowing this kind of gambling has done more harm than good or Twitch overall has done more harm than good to the industry?

      Twitch answers to nobody, which is a shame. It has done more harm than good to video-games
      um what??? Twitch has done so much for video games, esports, indie developers, building communities and Twitch (and youtube) have changed how people review games, watch previews. I think you are completely wrong saying it has done more harm than good.

      I hope that now it's flushed with cash
      Are you referring to local developers here? They are definitely not flush with cash and until recently have been in a massive decline over the last decade or so.

      I see the problem of under age gambling a game (in this case CS:GO) problem not as a Twitch/YouTube problem. Also

    When the CEO of Unikrn talks about streamers breaking the law, I can't help but think that what he really wants is to make a profit off of them and that it really has not so much to do with his outrage over his 13 year old son talking about it.

    start smoking ciggies, you wont have any money for gambling
    ozzie ozzie ozzie

    “When my 13-year old son and his friends talk about skin betting it made me seriously uncomfortable. It’s wrong that a 13-year old kid can do this. That alone should be banned and regulated,” Sood argues.I don't really get this. I mean I read it, but then I picture kids in the playground betting their lollies or snacks or whatever that such and such happens, and it's like... I dunno. I just find it hard to care? But then I've always been averse to gambling, preferring the certainty of keeping my items of value rather than the risk of losing them, so it's never really been a problem for me like it can be for others.

      Replace lollies with Pokemon cards. Now we all know gambling is weighted odds, so eventually that kid will lose some cards. Now how does a kid with no income try get back the cards he lost? Steal or extort money from parents to get more cards to bet more etc etc. The cycle is exactly the same as the gambling industry.

        Or he just earns it through pocket money, like how he got it in the first place?

          Precisely this. Let him learn how to handle money and how to manage their own personal budget while the any mistakes made are only minor.

          In my generation pokemon cards ended being banned from many schools due to stealing and playing for keeps etc.

          Alot of kids would just pay through they pocket money i.e within their means, but there are a number that dont which is why gambling is addictive and controlled so heavily from the government. I've worked in the gambling industry and it really is a mental problem that anybody can fall victim to.

    Pocket money becomes birthday money, becomes parent's credit card, becomes their own wages once they become old enough to get a job.
    Just like tobacco companies, gambling companies actually target kids.

    you guys here in oz either don't seem care or don't understand that your government exploits you wherever they can,u whether it be allowing gambling on esports through tab, buying faulty US war machines to hide recessions, politician's living way above their meens, allowing a drinking age of 18 to stunt your mind's so it can have a greater hold over you by pointing they finger at you when something's deemed wrong, supporting religious based learning while taking money from public education, breeding racism through detentiondetention/immigration center lies/scare tactics all while exploiting places like Indonesia, so gearing up kids by allowing stuff like this is just getting them ready for loosing brain cells and money & turning a profit for for your theocracy based overlords.

    So this is different from opening blind packed
    Lego mini figures or MTG/Pokemon/Hearthstone booster packs?

    Does it only become illegal if it is livestreamed?

      Yes and No. For instance a child is not allowed to be in a pokies area even if they are just sitting with their parents. Blind Packed opening is gambling but making laws against it would be far to vague and far reaching.

      If you have ever watched a gambler win a feature or a lucky pack opening on youtube. You feel like you could be as lucky as that person. It is one of the reason the features on pokies are so flashy and loud.

      Personally I think the pack opening stuff is not that bad but its part of the conversation.

    His concerns have some basis, but it's important to act on them in the proper way, which is something that is guaranteed not to happen when grey-haired, technology hating/illiterate government types get involved. We must not allow them to muddy the context of a wide variety of situations of this scene, nor use and abuse it for political gain.

    I do think it's high time that Valve state the odds of getting a knife/each weapon grade rarity for each case line imo, currently it's only speculation.
    I buy keys to cases on occasion to 'join the fun' that a large chunk of the csgo community is also doing, but only cause I know the funds go towards running the esport tournaments and it's prize money.

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