It is difficult to overstate the run-away success of esports.
In 2019, the esports market approached $1 billion a year for the first time ever on the back of “year-on-year growth of +26.7%.”
The 2018 World Championship of the wildly popular esports game League of Legends garnered 99.6 million online viewers. Compare that to the 2019 NBA finals which peaked at 18 million viewers during Game 6, and it seems esports are destined to disrupt.
Rising quickly in the wake of esports is esports betting. Total wagers involving esports approached $8 billion dollars in 2019. This figure is set to reach close to $13 billion in the near future.
Big things are in store for esports fans, but there are several hurdles that must be overcome for esports wagering before this potential can be realized. Aside from such hurdles, which are discussed below, it is unclear whether the legacy sportsbook operators will truly embrace online esports betting.
Best eSports Betting Sites
There are several different forms of esports betting as we will explain in the next section, so our recommendations here are organized according to the type of wagering you have in mind.
Standard Esports Betting Sites
Note: These sites have not yet launched esports betting markets but are run by companies with experience in the industry and are the places we would recommend visiting first if you live in a state with legal mobile betting.
Fantasy Esports Sites
Daily fantasy esports contests are legal in all states where daily fantasy is offered. If your state does not offer standard sports betting, these types of contests are your next best option.
Player vs. Player Esports Sites
If you would rather try your own hand at competitive esports and try to win some money at the same time, these are the sites for you. These sites allow you to play against other players for money and are classified as contests of skill in most states. Therefore, these sites accept customers from most of the US.
- Best eSports Betting Sites
- Esports Betting Explained
- Standard esports Betting
- Skins Betting
- Fantasy Esports
- Esports Competitions
- Is Esports Betting Legal in the USA?
- State by State Legal Status of Esports Betting
- Esports Appeal to Younger Generations
- What’s Next for Esports Wagering?
- More About Daily Fantasy Esports
- Popular Esports Games
Esports Betting Explained
The biggest hurdle that must be overcome for esports wagering is its classification. It might seem counter-intuitive for some to call an activity done sedentary a sport.
The greatest similarity to traditional sports and esports is the competition they both foster. Our working definition of esports reflects this competition and removes single player video games from the equation.
Nick Tofiluk of the UK Gambling Commission (UKGC) defines esports as, “any electronic game that is played between two or more individuals.”
That gives us a definition for esports, but we can further classify esports betting into four broad categories:
- Standard esports Betting: Wagers placed on the outcomes of other people’s matches using real money, similar to spectators betting on the outcome of a football game
- Skins Betting: Wagers placed on games using in-game skins, usually through unregulated gambling websites
- Fantasy esports: Daily fantasy sports sites such as DraftKings offer contests involving esports competitions
- esports Competition: Wagers placed on one’s own results. Same idea as paying to enter an in-person esports tournament and winning a prize for finishing well, but can also be done online with heads-up contests
Truth be told, how we classify esports has moved beyond dinner table discussions and is the focus of policy debates around the country. The undeniable popularity of esports spurred these debates and the fate of esports wagering rests in the balance of these policy discussions.
It is important to keep these categories in mind when we discuss esports betting because each is treated very differently by the law. Let’s take a closer look at each.
Standard esports Betting
For the lack of a better term, we’ll call wagers placed on the outcomes of other people’s matches “standard” esports betting. This is the form that most closely resembles betting on any other sport: you study the participants, choose a person or team to back and then watch the game to see if you’ve won.
A growing number of mainstream betting sites around the world are beginning to take wagers on esports competitions, but growth in this area has been a bit slower than we saw with the explosion of skins betting in previous years.
The rise of esports betting was more organic in nature; it began with skins betting and mostly involved people who were already deeply involved in esports. By comparison, big-brand sports betting operators have had to do some major catching-up in terms of education and understanding the market.
Some of the bigger betting operators outside the US now offer a plethora of esports markets on a daily basis, but the big brands in the US have been reluctant to jump on board due to the fluid nature of gaming legislation Stateside.
Lawmakers in some states have addressed the issue in legislation. A proposal in Maine, for example, specifically named esports betting as a legal form of wagering.
However, the confusion in New Jersey surrounding sports betting shows how lawmakers are still grappling with the issue. When New Jersey legalized sports betting in 2018, the law seemed to prohibit esports betting. Regulations issued later reversed that decision but added a caveat: people may bet on esports, but only on competitions in which all players are 18 or older.
Standard esports betting is where we see the biggest potential growth opportunity in the United States. With licensed operators taking interest and esports viewership still trending upwards, it is in this category of esports wagering where demand and potential are greatest.
esports wagering has historically avoided legal oversight because it did not involve wagering on real cash money. Much of esports gambling is built on “skins” as currency.
Skins are game specific items that can be used virtually and traded amongst players. A skins value to players is aesthetic and does not affect in-game performance. That is until third party trading sites began using the skins as currency creating a skins market.
These sites shaped the use of skins and they soon became a casino chip of sorts. Third party gambling sites began to deal in skins giving players the ability to bet on the games they or others were playing or gamble on jackpot style games and casino style games.
Skins betting is largely unregulated around the world and people who bet on esports do so at their own risk. The legality of placing wagers at such sites is uncertain, but no US state has authorized skins betting sites to operate. We strongly recommend all players stay far away for now.
Fantasy esports contests are legal in most US states because they are classified as fantasy sports contests rather than actual sports betting.
The Valve scandal did not prevent licensed operator DraftKings from offering fantasy esports wagers for the massive esport game League of Legends back in 2015.
“It was our fastest-growing sport last year”, commented DraftKings Co-founder and CRO Matthew Kalish in 2018.
DraftKings’ esports business increased 60% from 2016 to 2017. “It’s something that’s growing actually really fast for us. It was our fastest-growing sport last year … and all of that is without expanding into more games,” Kalish said in an Engadget article.
Additionally, more esports games are coming into their own e.g. Fortnite and Overwatch. DraftKings daily fantasy offered esports fans the next best thing to actual betting prior to the 2018 Supreme Court decision to repeal the federal sports betting prohibition, but now we are seeing renewed interest in straight up esports wagering.
Note: We go into more detail on how fantasy esports work a bit further down this page. In the meantime, read on to learn more about actual esports betting.
Player-vs-player esports contests played for money such as those offered by PlayersLounge.co and GamerSaloon.com tend to fall more under skill gaming laws rather than sports betting. Both sites operate in a surprisingly large number of states because they are considered contests of skill rather than luck.
Is Esports Betting Legal in the USA?
This is a difficult question to answer in most states right now. When the Supreme Court overturned PASPA on constitutional grounds, the decision made room for an expanded legislative framework for sports betting as a whole.
The Supreme Court decision never mentioned esports betting by name, but the entire industry was indirectly affected. In a post-PASPA USA, individual states now have the authority to legislate and regulate “sports betting” as they see fit. Whether or not that includes esports is for each state to decide on its own.
For example, Indiana’s sports betting law specifically names esports and amateur youth events as not allowed. Laws with similar language have been introduced in other states as well. On the other hand, esports betting is alive and well in Nevada.
The Supreme Court’s decision made way for fantasy gambling on esports, but it also expanded sports book operators to offer single-match betting, without having to create their own fantasy teams. Applied to esports, this means companies like Unikrn, an online esports betting platform, would be able to allow cash tournaments on esports in some states. Unikrn launched in 2014, with notable early investors like Mark Cuban, Elisabeth Murdoch and Ashton Kutcher.
In the wake of the Supreme Court decision, Unikrn co-founder and CEO Rahul Sood said this in an interview with Compete:
“We are very excited and we’re working with casino partners across the US who want to build the best gamified esports wagering experience for their customers after the Supreme Court’s ruling.”
Unikrn already operates in over 20 countries and is looking to expand their U.S. operations. The company has been public in pursuing a federal legislative scheme for esports gambling to avoid an “unnecessarily burdensome patchwork of regulations and requirements.”
State by State Legal Status of Esports Betting
Although a handful of bills introduced to date specifically name esports betting, most states have not yet fully fleshed out the answer. This is a whole aspect of legal sports betting that still needs to be fleshed out in most states.
Of the states that have legalized sports betting, some have specifically named esports betting as a legal form of wagering.
A handful of other states have specifically outlawed esports betting. Sportsbooks in those states have no option to offer esports even if they want to.
However, most states with legal sports betting have not clarified where eSports stand in terms of the law. This is a question that will have to be answered over time, and the answer will likely depend on whether or not lawmakers decide to treat esports the same as traditional sporting events.
Below is a list of states that have legalized sports betting to date and see what, if anything, they have to say about esports. We’ll be focusing strictly on standard esports betting (i.e. betting on matches as a spectator) rather than fantasy contests and player-vs-player wagers in the following table.
When it comes to betting on other people’s matches, the law is much less clear. To begin, betting on esports in this manner is prohibited in all states that have not legalized sports betting to date. Furthermore, we need to consider the law on an individual basis for each state that does have legal sports betting.
States with Legal eSports Betting
|Legal (Green)||Unclear (Blue)||Prohibited (Red)|
Esports Appeal to Younger Generations
What makes esports wagering so attractive to the gambling industry is the demographic it attracts. While interest in traditional gambling seems to be waning over the years, especially with younger crowds, esports wagering draws a younger demographic of potential customers.
With that being said, it is imperative to keep gambling away from minors, in terms of the athletes being wagered on and those doing the wagering. Esports leagues will be responsible for the protecting their underaged players, but esportsbook operators will need to ensure age compliance of the people placing bets on esports.
Know Your Customer (KYC) procedures will be essential for the future of esports gambling, and it seems that current sportsbook operators are in a good position to ensure such compliance. But then again, Unikrn is already on track with their own KYC procedures.
Unikrn verifies the age and location of their users and then links their account to the games they play. This gives players a chance to bet on their own skills and games. Unikrn generates matches for the player based on their game profile and the profile of said opponents.
Players place bets in a mutual pool on Unikrn, play their favorite game, and come back to Unikrn to claim winnings. Again, product offerings are currently being regulated by states with Unikrn’s U.S. operations still largely based in skins rather than currency.
What’s Next for Esports Wagering?
According to Bryce Blum, founder of Electronic Sports and outside general counsel at Unikrn, any next steps for esports will have to include considerations of several issues.
He suggests any future legislation around esports wagering needs to address “licensing protocol, age verification, geo-blocking technology, mechanisms to identify and exclude people with gambling problems from participating, responsible gambling education, and mandatory monitoring and reporting of unusual betting-line movements.”Top of Form
Additionally, states will have to clarify where they stand on esports competition. Do they consider it in the same category as other sports such as football and baseball? Should it be regulated any differently than those sports?
All of these regulatory components will be essential for esports wagering to follow the break-out success of esports itself.
More About Daily Fantasy Esports
We touched on fantasy esports above but would like to take the opportunity now to go a bit more into detail regarding how it works for those of you who live in a state that does not yet have legal esports betting.
Competitive video gaming meshes well with the daily fantasy sports model because it involves competitions between teams of active competitors. Once you get past the fact that your roster picks are filled by people playing games like Dota 2 and League of Legends rather than football and baseball players, you will find that daily fantasy esports contests work just like “normal” fantasy sports contests.
The best fantasy esports sites host contests that revolve around upcoming gaming tournaments. For example, you might visit DraftKings and join a $3 contest for some upcoming League of Legends tournament. Once you enter the contest, you’ll be given a virtual salary of $50,000 that you spend to build an 8-man roster.
At DraftKings, your lineup in a League of Legends contest would consist of 7 players plus one team slot. Your job as the manager of your own fantasy team is to choose gamers to fill slots for top, jungle, mid, ADC, support and two flex spots (can be filled by anyone). Lastly, you would need to choose one entire team to fill your final slot.
Player prices vary based on their perceived strength entering any tournament. If someone has been on a tear lately or is otherwise expected to perform well, that person will cost more virtual money for you to add to your team. Building an effective roster is both challenging and fun because you have no choice but to make tough decisions so you can stay within the salary cap.
Next, your esports site will monitor the next competition and track each player’s stats as he competes with his team and against other players. As your picks play in the tournament and achieve kills, assists and other stats, you earn fantasy points for your team. The more points you earn, the more likely you are to win the fantasy league and earn a cash payout.
Popular Esports Games
One of the more interesting things about daily fantasy esports is that it is such a dynamic landscape. Old games are frequently updated and new games can be added to the lineup as they grow in popularity. It’s a much more fluid environment than the traditional DFS world. The list of games covered by the biggest fantasy sites is bound to change, but here’s a quick look at what is popular right now.