Valve targets skin gambling in Steam TOS update
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
I’m back in the saddle after a packed week, including a trip down to New Jersey for SBC North America. I sat in on both of the esports betting sessions that were held at the event and shared some key discussion points from the panels below — or at least what I could make out from my distorted iPhone recording.
Let’s jump in.
In this week’s edition of Sharpr…
Valve targets skin gambling in Steam TOS update.
Key points from SBC North America’s esports sessions.
Sony ordered to refund players in Austrian loot box case.
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Valve targets skin gambling in Steam TOS update
Valve, publisher of popular esports titles including Counter-Strike and Dota 2, has seemingly taken aim against skin gambling in a recent update to its online code of conduct.
Valve updated its terms of service on Steam to prohibit “gambling” on May 9.
The language is a small piece of a larger list of bannable offenses related to engaging in “commercial activity.”
Steam is an online games marketplace owned by Valve which houses over 50,000 different games, including two of its most popular titles: CS:GO and Dota 2.
The new guidelines may be used to deter users from engaging with skin betting sites at the risk of losing their accounts. A quick skim on Reddit shows that approach may be working, with several users saying they’ve requested new API keys to avoid sanctions. “Not worth the risk for me,” one user wrote.
A more forceful (and effective) approach would be for Valve to identify and ban accounts which link users to betting sites that access the Steam API needed to trade and sell in-game weapon skins.
🦈 Sharpr Take: It’s ultimately unclear what the potential impact of Valve’s updated TOS will look like long-term, but it seems to only be as effective to the extent in which it’s enforced.
Valve could have added the language to its code of conduct to protect itself from future legal quarrels related to unregulated gambling involving its IP — a situation the company has found itself in previously, but managed to come away unscathed.
Perhaps not-so-coincidentally, the policy change arrives a week after G2 Esports unveiled its partnership with skin gambling site CSGORoll, spurring extensive criticism online from fans. My own personal research confirmed there was virtually no KYC preventing me from depositing $3.50 on the platform and gambling it away, so what’s preventing anyone else?
Valve has otherwise been historically receptive to regulated betting on Counter-Strike and Dota 2, though. While the publisher doesn’t outwardly endorse gambling, it allows betting companies to partner with organizers for its top events, the most recent example being Unikrn sponsoring the BLAST Paris Major.
SBC North America: “If you don’t allow for startup innovation, the only thing you do is slow down.”
SBC North America wrapped up last week after three days of panels and networking at the Meadowlands Exposition Center in New Jersey, and among the event was a pair of esports betting-focused sessions.
Unikrn CEO Justin Dellario told Washington Post Editor Mikhail Klimentov that “[betting] is a meaningful form of direct-to-consumer monetization for the long-term sustainability of esports.”
The value esports stands to gain from regulated betting is one I’ve touched on in the past, and is particularly relevant as the industry is pressured to show signs of profitability. Dellario also shared insights on the esports consumer and how they align with the broader sports betting industry’s pursuit to acquire more recreational bettors.
“This esports audience is fast-consuming, they’re fast-spending, they’re digitally engaged across a whole number of apps and social medias — these bets don’t need to be large,” he said. “Esports betting does not need to be built with a VIP customer in mind.”
On the other side of the conference hall, a panel session with Bayes Esports, SIS, G3 Esports, and Oddin covered esports betting through a domestic lens.
Bayes Esports COO & Managing Director Amir Mirzaee explained that esports is growing quickly overseas, while little-to-no progress has been made stateside.
“Everytime we come back to the U.S., I feel like I have to remind myself of what the narrative was again. The rest of the world has progressed so much further, so much faster at this stage,” he said. “Esports will always look different and behave different than any other sport. If you don’t allow for startup innovation, the only thing you do is slow down.”
Michele Fischer, VP of content services at SIS, expects esports betting interest will start to pick up in the U.S. once the majority of states are online and consumer acquisition blitzes cool off.
“I think in the next year or two what we are going to see is these operators, once they’re in all the states that [offer] sports betting, they’re going to start looking at their content portfolio and they’re going to say ‘what else can we have?’ That’s when the opportunity is going to be there for esports.”
Sony ordered to refund players in Austrian loot box case
An Austrian court has reached a final verdict in a case against Sony Interactive Entertainment pertaining to its sale of loot boxes in FIFA.
Austria officials ruled in March that FIFA Ultimate Team packs are a form of illegal gambling in a lawsuit against Sony.
Sony opted not to appeal the court’s verdict and is now required to refund approximately $350 to a group of PlayStation FIFA players who purchased in-game loot boxes.
Sony was targeted in the lawsuit over FIFA publisher Electronic Arts as the company facilitated the users’ purchasing contracts through the PlayStation Store.
Padronus, a German law firm that initiated the case, had initially told GamesWirtschaft that more than 1,000 FIFA users have contacted the company to file claims averaging roughly $840. The firm says that some extreme cases have been as high as $89K.
The precedent set by the court in this case could serve as a watershed moment for similar lawsuits and verdicts to come.
Industry correspondent Ollie Ring shared more thoughts on the potential impact of the case.
🗞 In the news
HyperX has signed a multi-year agreement to renew its naming rights of the HyperX Arena in Las Vegas.
GRID has launched a virtual CS:GO product in partnership with Inspired Entertainment.
📈 By the numbers
Esports viewership grew 15% to 651M hours watched in Q1 2023.
FaZe Clan reported a net loss of $14M in Q1 2023.
Enthusiast Gaming recorded $31.9M in Q1 2023 revenue.
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*Disclaimer: I am a full-time employee of Rivalry.