Australian authorities ban CSGORoll as skin gambling tensions rise
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
I never thought we’d have three back-to-back-to-back headline stories on skin gambling in 2023, but here we are.
Today’s lead story is a mixed bag of news surrounding CSGORoll, the skin betting site banned by Australian authorities last week and caught up in further controversy during the recent CS:GO Major tournament in Paris. Valve has also made moves to clear up any doubts around its intention to curb skin gambling, wiping several accounts with over $600,000 worth of inventory.
That’s a lot of money.
In this week’s edition of Sharpr…
Australian authorities ban CSGORoll as skin gambling tensions rise.
Rivalry records $8.9M in Q1 revenue.
Thunderpick signs multi-year deal with Evil Geniuses.
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Australian authorities ban CSGORoll as skin gambling tensions rise
The Australian Communications and Media Authority has banned skin gambling site CSGORoll in the country following an investigation into the company.
The investigation found CSGORoll’s “casino-style” games violated the nation’s Interactive Gambling Act 2001.
As a result, parent company Feral Holdings Limited was issued a warning and CSGORoll has been withdrawn from Australia.
ACMA Chair Nerida O’Loughlin said, “Skins gambling services are particularly concerning as they tap into a youth market and have the potential to convert gamers into gamblers.”
The news arrives a few weeks after G2 Esports revealed its partnership with CSGORoll, spurring widespread criticism from fans. Use of the team’s star player Ilya “m0NESY” Osipov in the promotional video, who was unquestionably under the legal gambling age when the ad was filmed, also added insult to injury.
The partnership took to the CS:GO Major in Paris this week where another episode unfolded. A protestor at the event was recorded gluing his hand to CSGORoll’s custom skin slot machine and shouted that he “lost his house” to the company.
CSGORoll responded in a now-deleted tweet saying this act was part of a “sabotage campaign” carried out by a competitor. A screenshot with the site’s geo distribution showed a concentration of web traffic came from black markets such as the US, UK, and Australia.
At some point between G2’s partnership with CSGORoll and the glue-handed culprit, Counter-Strike developer Valve stepped in with language barring gambling in the Steam service agreement. Many industry onlookers, including myself, felt dubious about the move and whether or not it would move the needle against unregulated skin betting. But Valve has appeared to come out swinging.
Several high-value Steam accounts allegedly linked to skin gambling sites were banned last week, and with it, over $630,000 worth of inventory.
🦈 Sharpr Take: If you’re like me, you’re probably thinking that hundreds of thousands of dollars worth of in-game items held by a few individuals is a radically insane thought, but that’s the reality of the CS:GO skin economy, which was said to have a “market cap” of over $1B in 2021, according to one study.
Tensions around skin gambling are starting to rise again. Some individuals claim it has reverted to mid-2010 levels when the segment was running rampant and under heavy legal scrutiny. In 2016, this forced Valve to go on the offensive, issuing a number of cease-and-desist notices to popular skin betting sites like CSGO Lounge and others. The US Federal Trade Commission had even stepped in to combat some of the deceptive marketing practices used by these sites and their brand ambassadors.
With the current discourse around skin gambling, Valve taking action, and authorities getting involved again, there’s no telling what may happen next, but it seems like the pressure is mounting.
⏱️ Worthy of your time: While there’s not a whole lot of silver lining here besides skin gambling = bad, I did want to share some thoughts from Acies Investments Co-founder Chris Grove, who recently noted how this category opened up “new lines of product innovation” for online betting.
“The rapid ascent and enthusiastic organic adoption of skin gambling sites also surfaced another lesson that the traditional gambling industry has been slow to learn: If you want a cohort that isn't instinctually attracted to your product to use your product, refactor your product to be more attractive to that cohort,” he said.
“Gamers thought slots and roulette were for their grandparents. But they flocked to skin gambling games with those same underlying mechanics dressed up in more relevant ephemera.”
Rivalry records $8.9M in Q1 revenue
Toronto-based operator Rivalry has announced its Q1 2023 financial results, setting multiple all-time KPI records.*
Betting handle grew 43% from the last quarter to $88.8M.
Revenue was $8.9M, a 151% increase year-over-year.
Gross profit increased eightfold year-over-year to $4M.
User registrations more than doubled year-over-year to 1.5M accounts.
Notably, the company generated this quarter’s results with a 5% year-over-year reduction in marketing expenses – a nod to Rivalry’s brand strategy and ability to “drive growth independent of marketing spend.” Furthermore, net loss decreased 50% year-over-year to $2.4M, which Rivalry says highlights its “continued focus on operational efficiency.”
Rivalry CEO Steven Salz attributed the company’s quarterly results to its focus on betting entertainment and product innovation.
“Building innovative products, which add to an overall unique and interactive betting experience on Rivalry, will remain a strategic focus in 2023,” Salz said. “The competitive advantage of engaging and fun products is increased user activity and satisfaction, and when combined with a profitable acquisition strategy, creates a flywheel effect in the business generating consistent organic momentum and enhancing our operational efficiency.”
*Disclaimer: I am a full-time employee of Rivalry.
Thunderpick signs multi-year deal with Evil Geniuses
North American esports organization Evil Geniuses has announced a partnership with crypto betting platform Thunderpick.
The deal will see Thunderpick become the “marquee partner” of Evil Geniuses’ male, female, and academy Counter-Strike: Global Offensive teams and receive jersey branding.
EG and Thunderpick will also organize meet-and-greets with players, develop content, and giveaway branded merchandise.
Company representatives told Digiday the agreement will span several years.
EG Head of Global Partnerships Leonard Edwards commented on the uptick in engagement the organization expects to see as a result of the partnership.
"We're always looking for fresh ways to enhance the fan experience, and Thunderpick's commitment to ensuring a reliable and inventive betting environment will offer a new arm of engagement during events."
Thunderpick holds a Curaçao license and deals exclusively in cryptocurrency. The operator’s FAQ page states the platform is unavailable in the United States, one of EG’s key markets,
among other countries. Industry correspondent Ollie Ring pointed out (and I confirmed) that the site can be accessed from the US, or at least easily accessible through a VPN.
Thunderpick KYC is virtually non-existent, and assuming a user could deposit and bet as quickly as I was able to register on the platform, this could spell trouble for EG. Still, reception from the partnership announcement was neutral at worst, and the parties have appeared to avoid the negative press other top esports teams who have previously partnered with crypto-based sportsbooks and casinos have received.
🗞 In the news
Luckbox has struck a partnership with casino game developer Red Tiger.
Abios launched a new round-based CS:GO betting product.
Oddin has partnered with casino provider Lion Gaming.
📈 By the numbers
Gaming content drove over 3 trillion views on TikTok in 2022.
The NCAA revealed that 58% of 18- to 22-year olds have engaged in sports betting activity.
New Jersey generated $834M in April betting handle; parlay hold was nearly 19%.