Lounge’s Final Days
JULY 10
Accepts largest
handle of 2016
on ESL One
Cologne Final
JULY 25
Promulgates
new terms and
conditions
without
publishing
AUG 1
Restricts skin
betting, vows
to apply for
gambling
license
AUG 15
Reported that
parent company
owns pro esports
franchise
SEPT
AUG
JULY
SEPT 26
Launches coin-based,
sportsbook-style betting
on CS:GO matches
AUG 16
Announces it is shutting down
all skin betting immediately
JULY 19
Appears in first
Valve cease and
desist letter
JULY 29
Ignores 10-day
window to comply
with Valve’s C&D
AUG 11
Trade bots reportedly
banned/suspended
by Valve
2016
An Ending Not On Its Terms
Other Sites Attempted Workarounds Outside The US
Unlike other skin betting sites, Lounge’s reaction to Valve’s C&D
order stood out for its uniqueness, if not its inefficacy. While its steps
were proactive, they failed to fully address Valve’s request
and did not appear to consider the necessary preconditions for
their achievement.
Other skin gambling sites similarly attempted to avoid facilitating
the conversion of skins to gambling currency, while still offering
a gambling product
The changes appeared more appropriate for a regulated
esports cash betting product (which Lounge did not offer) as
opposed to a skin betting product. In an updated set of terms
and conditions announced on Aug. 1 and backdated to Jul. 25,
Lounge said it would:
• Ban users in 16 countries and five territories from skin betting,
while continuing to offer the product in other countries
• Apply for a gambling license in those 16 countries to offer
skin betting
• Develop a Self-Exclusion Responsible Gaming Policy by
which users could have their accounts suspended for a
minimum of six months
• Require the additional use of traditional email and
password log-ins for all users, including users accessing
skins through their Steam account
• Prohibit the use of Virtual Private Networks that allow
players from banned countries to access betting features
• Skin gambling sites CSGOStrong and CSGOCosmos, both
named in Valve’s C&Ds, pivoted their business models in early
August to no longer accept direct skin deposits. Instead, the
sites outsourced the conversion of skins-to-digital-currency to
Skntrades. Players would acquire coin for skins on Skntrades,
then fund their balance on Strong or Cosmos directly with those
coins, as opposed to skins. This relationship ostensibly added a
layer of protection between the sites and any skins-to-currency
conversion. By August, the websites for Strong, Cosmos and
Skntrades were offline in the US, but this microsystem was still
functioning in other parts of the world.
• European bettors reported in August that CSGOFast, a
casino-style skin gambling site that warned users in July it was
suspending operations and shutting down its Steam trade
bots, was actually continuing to allow players to fund accounts
and place wagers. While US users were locked out of accessing
the site at all, users elsewhere in the world looking to gamble
on the site were funneled to a variety of account-funding
options, including G2A Pay, the real-money payment arm
of game marketplace G2A, as well as PayPal, Skrill,
Webmoney and more.
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