Lounge’s Product Pivot: Coin Betting
On Sept. 26, more than one month after Lounge shut down
sportsbook-style skin betting worldwide, it quietly rolled out a new
form of betting on the outcome of professional esports matches.
The site prompted users to sign up for the same email-and-password
style accounts that it launched in reaction to Valve’s order to cease
and desist using Steam to facilitate gambling. Formerly, users could
log in to the site only using their Steam account.
Once bettors did sign up, they received 100 coins for free. Bettors
could then allocate some or all of those coins across any
upcoming professional CS:GO matches, just as they could in the
first half of 2016 with their skin balance. The layout and design
closely resembled the skin betting aesthetic bettors were used
to. A standings page listed the users with the highest to-date
cumulative coin betting balance and those who had made the
highest number of correct wagers.
Many facets of this new feature, including how the coin-based
betting system monetizes and what coins are worth, are unclear.
Several features of the product, such as an “Earn Coins” function,
have not been deployed yet.
Coins are not new to the CS:GO wagering universe. Sites such as
Fast, for example, employ the use of a coin-based system to
facilitate casino-style gambling games. Users convert skins to
coins in order to gain currency to use to bet on the site, and can
use coins to purchase skins as a method of “cashing out,” since
winning and retaining virtual coins effectively leaves the holder
with nothing of real-world value.
Esportsbook-style coin betting on games featuring traditional
sports, such as EA’s FIFA and Madden series, is also not new. Two
operators of a Fifa coin betting site in the United Kingdom were
charged in September by the UK Gambling Commission with
providing gambling facilities and enticing children to gamble.
Their operation was not necessarily doomed to illegality, but was
unlicensed, one of several requirements for operating a betting
business in the UK.
However, coins, along with balance management, standings and
betting statistics, are new to the CS:GO sportsbook betting universe.
Competing with other users to have the highest coin balance,
which from Lounge’s standings tables we can assume holds some
future importance, illustrates a product that emphasizes a relative
measure of skill. How and if regulators, courts, Valve or other actors
choose to consider this fact could open up a new regulatory
chapter for esports betting, and determine whether or not Lounge’s
new product is economically scalable.
Lounge’s New Coin Betting: Questions To Consider
• How do users cash coins out?
• If and when users cash coins out, will they receive anything
of real-world value?
• Will coins be determined to have real-world value?
• Will users be able to purchase additional coins for real money?
• Will users be able to acquire additional coins without
consideration?
• Will users win anything for achieving the highest coin balance
or making the most correct bets?
• Will coins be used to wager on outcomes of non-CS:GO
matches, or non-esports matches?
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