Game on: A brief look at gambling on eSports

Like daily fantasy sports, betting on eSports (i.e., professional video gaming) has increased in popularity over the last few years and has given rise to allegations of unregulated and underage gambling. The eSports market is large. According to a 2016 report by Superdata, professional eSports is growing exponentially and is worth an estimated $612 (US) million a year. Furthermore, Eilers and Krejcik Gaming estimate that real money betting on eSports betting will reach $10 billion (US) by 2020. The professionalization and sportification of this entertainment form has brought sports-world elements to it: stadium-like facilities, cheering stands, sponsors, big rewards, and competition. Instant replays, jumbotrons (i.e., super-huge television screens), and referees add to the sport dramatisation. In some notorious cases, prizes have gone beyond the $10 million [US] threshold in a packed arena housing 73,000 fans. According to by John McMullan and Delthia Miller in a 2008 issue of the Journal of Gambling Issues, sportification is the process of incorporating the logics of sport to non-sporting contexts (e.g., poker, eSports. This can materialise in many ways but most commonly occurs when (i) other industries capitalise on the positive attributes of sport (e.g., popularity, engagement, or sanity and health inferences); and (ii) non-sport fields try to increase the entertainment and playability of their products and their association with joy and excitement.

Twitch, an online platform that streams live video gaming, informs its’ advertisers that it has 100 million monthly viewers, who watch for an average of 106 minutes a day. Betting on eSports presents new challenges. As a news report in Bloomberg news observed in relation to betting on the game Counterstrike: Global Offensive (CSGO):

“Gambling – licensed, regulated, and by adults – is generally accepted in eSports. There is growing concern, though, that teenagers are being attracted to different forms of betting facilitated by third-party providers. One such platform is CSGO Lounge (an independent site not affiliated with Valve Software, which develops the game itself). The site allows spectators to bet in-game add-ons known as skins – weapons, tools and the like – on the results of matches. Not all skins are created equal, and the rarity of some means they can cost hundreds of real dollars on marketplace sites like SkinXchange.com. The temptation is too much for some”.

Put simply, skin gambling is the use of virtual goods and items (typically cosmetic elements that have no direct influence on gameplay) as virtual currency to bet on the outcome of professional matches. The Bloomberg article also claims on the basis of interviews with industry insiders that underage skin gambling is a “huge problem”. Justin Carlson (lead developer of SkinXchange) claims there are “countless” parents whose children have used their credit cards without their knowledge to buy skins and bet on gaming on other sites. Although anecdotal, Carlson claims that some minors have “racked up hundreds or thousands of dollars in skins on ‘SkinXchange’ just to lose them all on some betting or jackpot site”. It’s clear that people trading skins in eSports has grown over the last few years and various regulators around the world – such as the UK Gambling Commission (UKGC) – are considering regulation and says it is an “emerging product” and an “area for continuing future focus”. More specifically, the UKGC’s 2016 Annual Report notes:

 “The growing market in esports and computer gaming has scope to present issues for regulation and player protection – issues which are being examined by gambling regulators in other international markets…These issues range from the emergence of real money esports betting markets, to trading in-game items which blur the lines between gambling and social gaming. Our focus will be to understand developments, including engaging with key stakeholders, and we will work wherever we can to ensure the risks associated with these, particularly to children and young people, are minimised”.

One of the complicating factors for eSports gambling is that while cash is the currency for many gamblers, there is a growing trend towards the use of virtual currencies, or ‘in-game items’ which, according to the UKGC, can be “won, traded, sold or used as virtual currency to gamble with and converted into money or money’s worth”. These, according to the UKGC, “include digital commodities (such as ‘skins’) which can be won or purchased within the confines of computer games and can then be used as a form of virtual currency on a growing number of gambling websites”. No academic research has examined underage skin gambling but this is an issue that is unlikely to diminish over the coming years.

It is also worth noting that this massive interest in eSports followed by a massive audience has led most major betting operators to include eSports in their daily gambling offer. However, the singularities of eSports market pose new challenges that conventional online betting sites struggle to address. Suraj Gosai, co-founder of Blinkpool, an eSports dedicated betting platform, laid out two main problems: in-play betting limitations and odds algorithmic programming. For in-play betting to be viable, companies need to get access to reliable, instantaneous, and unambiguous data that can settle bets and separate winners from losers. Data companies like Perform do that in sport, and betting operators rely on their data to offer in-play action to gamblers. The problem in eSports is that actions are not as quantified and standardised as in real-life sports. To counteract that, Blinkpool created a computer vision technology that extracts data from real-time action and promotes hyper-contextual opportunities, that is, 10- to 45-second in-play betting mini-markets concerning very specific developments in the narrative of the games.

Odds programming in sports betting is fundamentally based on historical data from hundreds of thousands of games, from which each factor (home advantage, table position, head-to-head, etc.) is weighted in to determine the probability of an event occurring. In the fixed-odds betting market, the bookmaker makes available to bettors that probability plus a benefit margin. When placing a bet, an individual bets against the probability that the house has predicted. This is not yet feasible in eSports because the historical data are scarce and the modelling is complex. Companies are circumventing this problem by offering exchange betting rather than fixed-odds. This method comprises peer betting, that is, bettors do not bet against the house but between one another. This way, the house gets a commission from winning bets and operates a much less risky business.

Dr. Mark Griffiths, Professor of Behavioural Addictions, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Bracken, G. (2016). We hope to be the home of eSports betting. Gambling Insider. Available from: https://www.gamblinginsider.com/in-depth/1909/we-hope-to-be-the-home-of-esports-betting

Gambling Commission (2015). Explaining our approach to social gaming. Located at: http://www.gamblingcommission.gov.uk/Gambling-data-analysis/Social-media/Explaining-our-approach-to-social-gaming.aspx

Gambling Commission (2016). Annual Report 2015/16. Birmingham: Gambling Commission.

McMullan, J. L., & Miller, D. (2008). All in! The commercial advertising of offshore gambling on television. Journal of Gambling Issues, 22, 230-251.

Melbourne, K. & Campbell, M. (2015). Professional gaming may have an underage gambling problem. Bloomberg, September 7. Available at: http://www.bloomberg.com/news/articles/2015-09-07/professional-video-gaming-has-an-underage-gambling-problem

Superdata (2016). eSports Market Report. Available at: https://www.superdataresearch.com/market-data/esports-market-brief/

Wingfield, N. (2014) In e-Sports, video gamers draw real crowds and big money. New York Times, August 30. Available from: http://www.nytimes.com/2014/08/31/technology/esports-explosion-brings-opportunity-riches-for-video-gamers.html?_r=0

Wood, J. (2016). UK Gambling Commission: We’ll work to minimize risks from emerging esports betting markets. Esports Betting Report, July 19. Available at: http://www.esportsbettingreport.com/uk-regulators-address-esports-betting/

Play to win: A brief look at competitive video gaming

To date, competitive gaming has not been widely researched or recognized in the scientific and professional literature on video games. As the name suggests, competitive gaming comprises players who regularly compete in tournaments organized and run by the gaming community, often for large monetary gains. Secondary benefits include the recognition and admiration of other gaming community members. Such tournaments are now often run by companies that host the events at large convention centers in major cities (e.g., New York City, Los Angeles, Seoul, etc.).

Despite three decades of worldwide growth in competitive gaming, little empirical investigation has catalogued these activities. Although empirical studies are lacking, studies have noted that competitive games now use Internet radio coverage with play-by-play commentaries, large-screen televised projections of game footage, sizeable live audiences, and cash prizes in the hundreds of thousands of dollars. For elite competitive gamers (i.e., professional gamers), the activity is a full-time job. Many games played competitively appear to demand high levels of sophistication in strategizing, planning, multi-tasking, and timing to master.

Academic studies have shown that certain competitive games, if used properly, can also promote prosocial behaviour and skill development. Furthermore, professional success in competitive gaming seemingly requires persistent practice and sophisticated skill sets. It is likely that these positive effects are more substantial than the effects of games played on a casual level. Numerous studies have demonstrated the benefits of gaming more generally in lieu of the positive effects of competitive gaming, particularly in relation to improved spatial cognitive benefits. Studies have also suggested that video games can provide an enriched medium for strategic problem solving. Other studies support the differences between novice and advanced levels of play in video games. For instance, research has demonstrated measurable differences between novice and expert game players, the latter group often demonstrating enhanced short-term memory, executive control/self-monitoring, pattern recognition, visual-spatial abilities (e.g., object rotation), and task-switching efficiency, along with more efficient problem-solving skills.      

Competitive gaming has the potential to change the dynamics and motivations of gaming. For instance, if a player can make a financial living and career from playing a video game, it becomes an occupation rather than a hobby. This raises interesting questions about the role of context in excessive gaming and potential addiction. Although there is ongoing scientific debate on the nature and extent of adverse consequences associated with excessive digital technology use, I have noted (in a 2010 issue of the International Journal of Mental Health and Addiction) that long hours of video game use alone do not indicate video game addiction (i.e., heavy use on its own is not a sufficient criterion for addiction). Therefore, in order to evaluate problematic video game use, researchers must consider possible negative consequences players are experiencing in their lives. When video game players are capable of financially supporting themselves from their play, this matter becomes more complex. For example, how would one categorize a professional video game player who was making over $100,000 per year playing video games, but was also experiencing social difficulties as a result of excessive video game use? This point is not meant to imply that a successful professional gamer is incapable of suffering pathological effects from game use, but rather to raise the distinct possibility that professional gamers will view their use as non-problematic due to the success they experience.

When it comes to competitive gaming, many players will play excessively and spend hours and hours every single day either practicing or competing. For many competitive gamers, their whole life is dominated by the activity and may impact on their relationships and family life. However, this does not necessarily mean they are addicted to playing the games because the excessive game playing is clearly a by-product of the activity being their job. However, it could perhaps be argued that they are addicted to their work (and in this case, their work comprises video game playing).

Workaholics have been conceptualized in different ways. For instance, in a 2011 review I published in The Psychologist, I noted that workaholics are typically viewed as one (or a combination) of the following. They are (i) viewed as hyper-performers, (ii) work as a way of stopping themselves thinking about their emotional and personal lives, and (iii) are over concerned with their work and neglect other areas of their lives. Some of these may indeed be applied to competitive gamers (particularly the reference to ‘hyper-performers’ and the fact that other areas of their lives may be neglected in pursuit of their ultimate goal). Some authors note that there is a behavioural component and a psychological component to workaholism. The behavioural component comprises working excessively hard (i.e., a high number of hours per day and/or week), whereas the psychological (dispositional) component comprises being obsessed with work (i.e., working compulsively and being unable to detach from work). Again, these behavioural and psychological components could potentially be applied to competitive gamers.

I have also noted that there are those who differentiate between positive and negative forms of workaholism. For instance, some (like myself) view workaholism as both a negative and complex process that eventually affects the person’s ability to function properly. In contrast, others highlight the workaholics who are totally achievement oriented and have perfectionist and compulsive-dependent traits. Here, the competitive gamer might be viewed as a more positive form of workaholism. Research appears to indicate there are a number of central characteristics of workaholics. In short, they typically: (i) spend a great deal of time in work activities, (ii) are preoccupied with work even when they are not working, (iii) work beyond what is reasonably expected from them to meet their job requirements, and (iv) spend more time working because of an inner compulsion, rather than because of any external factors. Again, some or all of these characteristics could be applied to competitive gamers.

Furthermore, competitive gaming is not the sole means by which proficient gamers can financially support themselves. Researchers (such as Dr. Edward Castranova) studying the economics of synthetic worlds (e.g., digital gaming environments) have observed that gamers also procure income by marketing virtual objects in Massively Multiplayer Online Role-Playing Games (MMORPGs). These digital objects often include avatars, or characters controlled by players that interact with gaming environments and other players. Each avatar has unique physical attributes and skills that a player may select, purchase, and/or develop over many hours of game play (e.g., the gradual enhancement strength, speed, weapon-wielding abilities, etc.).

As noted above, competitive gamers are likely to play for extended periods of time and sacrifice other areas of their lives if they have the potential to make a living from gaming. This single-minded dedication may become a problem for some players because the goal of becoming a professional gamer is often unrealistic. There are currently no precise figures relating to the number of competitive game players, but anecdotal evidence suggests that few professional gamers generate sufficient income to support themselves financially. Although viability may change in the future, at present, the great majority of competitive gamers have little chance of becoming successful and financially independent professionals. For this reason (i.e., the motivation to become a professional), competitive gamers may be more susceptible to excessive use than the average video game player. Additionally, even successful professional gamers are likely to play for extended periods of time, as playing less than eight hours each day could mean that they are not practicing enough compared to other professional players. Those who work with (and treat) problematic video game players should keep this factor in mind (especially given that excessive video game use may increase as competitive gaming receives more bona fide recognition as a possible career choice). 

Competitive gaming, as with video game playing more generally, has psychosocial advantages and disadvantages and is thus an important area to consider when evaluating gaming as a whole. It may be critical to include questions about competitive gaming (and context more generally) in measures evaluating the degree, extent, and “addictive” potential of video game use. Furthermore, it would appear essential for psychologists to inquire about competitive gaming in a clinical interview during which a client reports playing video games. If clients turn out to be competitive gamers, this will likely distinguish them in many ways from a person who simply plays video games excessively for fun and/or escape.

Various approaches and strategies could be used to stimulate research into competitive gaming. For example, studies could compare the abilities of professional or high-level competitive gamers with everyday or far less experienced gamers to better understand (a) similarities and contrasts in capacities, and (b) whether skills transfer to other domains. Another possibility is to utilize case studies of highly successful professional gamers. Such in-depth studies can generate descriptive information that can help in formulating hypotheses about potential differences between these individuals and non-competitive gamers and lead to better informed and more rigorous empirical investigations. How and why are some competitive gamers able to succeed while so many other players try and fail? Are some of these characteristics and skills (e.g., persistence and speed of mental processing) similar to those seen in professional athletes or others who are extremely successful in their occupations?

Competitive gaming may offer numerous benefits that could be more pronounced than the positive effects found when games are played casually. It may also be problematic, as competitive gamers might be more likely to sacrifice other areas of their lives if they believe they can become professional players. Most importantly, those researchers in the gaming studies field might keep in mind that competitive and professional gamers are a distinct population and may differ considerably (both psychologically and/or behaviorally) from casual gamers.

Dr. Mark Griffiths, Professor of Gambling Studies, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Additional input: Kyle Faust and Joseph Meyer

Further reading

Andrews, G., & Murphy, K. (2006). Does video game playing improve executive functioning? In M. A. Vanchevsky (Ed.), Frontiers in: Cognitive psychology (pp. 145–161). Hauppauge, NY: Nova Science Publishers.

Boot, W. R., Kramer, A. F., Simons, D. J., Fabiani, M., & Gratton, G. (2008). The effects of video game playing on attention, memory, and executive control. Acta Psychologica, 129, 387–398.

Castronova, E. (2005). Synthetic worlds: The business and culture of online games. Chicago, IL: The University of Chicago Press.

Castronova, E., Williams, D., Shen, C., Ratan, R., Xiong, L., Huang, Y., & Keegan, B. (2009). As real as real? Macroeconomic behavior in a large-scale virtual world. New Media and Society, 11, 685–707.

Cheshire, T. (2011, July 4). Career gamers: Inside the world of modern professional gaming. Wired. Retrieved from http://www.wired.co.uk/magazine/archive/2011/07/features/career-gamers?page=all

Faust, K., Meyer, J. & Griffiths, M.D. (2013). Competitive gaming: The potential benefits of scientific study. International Journal of Cyber Behavior, Psychology and Learning, 3(1), 67-76.

Goodale, G. (2003, August 8). Are video games a sport? They may not break a sweat, but these competitors say they are tomorrow’s athletes. The Christian Science Monitor. Retrieved from http://www.csmonitor.com/2003/0808/p13s01-alsp.html

Griffiths, M. D. (2010). The role of context in online gaming excess and addiction: Some case study evidence. International Journal of Mental Health and Addiction, 8, 119–125.

Griffiths, M.D. (2011). Workaholism: A 21^st century addiction. The Psychologist: Bulletin of the British Psychological Society, 24, 740-744.

Hong, J-C, & Liu, M-C. (2003). A study on thinking strategy between experts and novices of computer games. Computers in Human Behavior, 19, 245–258.

Hutchins, B. (2008). Signs of meta-change in second modernity: The growth of e-sport and the World Cyber Games. New Media Society, 10, 851–869.

King, D., Delfabbro, P., & Griffiths, M. (2009). The psychological study of video game players: Methodological challenges and practical advice. International Journal of Mental Health Addiction, 7, 555-562.

Lee, Y-H, & Lin, H. (2011). ‘Gaming is my work’: Identity work in internet-hobbyist game workers. Work Employment Society, 25, 451–467.

Reeves, S., Brown, B., & Laurier, E. (2009). Experts at play: Understanding skilled expertise. Games and Culture, 4, 205–227.