Before covid-19, casinos in Las Vegas would have laughed at the prospect of an esports-centric betting operation. But now, searching for alternative events amid the sports-less coronavirus pandemic, Las Vegas has warmed to the idea.

This week, a month after traditional sports across the country shut down due to the virus, the Nevada Gaming Control Board (GCB) approved bets on four different esports series, adding to the slowly growing betting options for competitive gaming. Adding betting options is critically important to casinos in the current climate given their floors have been closed due to the virus, shuttering table games and forcing gambling to app and online formats.

As the regulatory government body that oversees America’s gambling capital, the Nevada GCB serves as a barometer for much of the sports betting world. After first approving bets on Counter-Strike: Global Offensive’s ESL Pro League Season 11 in North America and Germany, the board then opened up an ESL Dota 2 event and eNASCAR. This week, the biggest esports leagues in the country opened up as well. The League of Legends Championship Series in North America, the League of Legends European Championship and Overwatch League are now available for gambling in Las Vegas, as is the Call of Duty League, which was approved Thursday. While mainstream sports fans may not be familiar with those leagues, they’re probably more likely to hear about their upcoming competitions than some of the other live sporting events being considered by sports books.

“In terms of what sports are left, there’s Russian table tennis and Japanese sumo wrestling,” said Joe Asher, the CEO of William Hill, a leading sportsbook. “We were talking about Nicaraguan baseball, there’s some soccer in Belarus.”

Compared to the gambling jackpot that is March Madness, sumo wrestling and Belarusian soccer are couch change. Esports, with a steadily growing audience, particularly in the age 18-34 demographic, offers an intriguing alternative, but casinos are proceeding with caution.

The slow growth for esports betting interest in Vegas has to do both with the approval process for adding offerings to sports books and the uncertainty from casinos and oddsmakers around what is still a fledgling field, where machines necessarily filter the actions of players before results play out on screen.

“Each state has to approve an esports wager,” said Seth Schorr, CEO of Fifth Street Gaming and Chairman of the Downtown Grand Hotel and Casino in Las Vegas. “Nobody can just approve all esports. There would be cheating, there would be no integrity. Right now you have to get approval for each match, which is pretty cumbersome, so the next phase in esports betting will be regulators getting comfortable.”

Schorr has been pushing esports betting forward in Vegas for five years. He worked with Asher to get William Hill into ESL’s Counter Strike: Global Offensive (CS:GO) back in 2017, but esports were never a primary focus of the sportsbook. Now, William Hill is looking into esports more — even if it remains hesitant to take big bets.

“The amount we will allow people to bet on esports is much smaller [than traditional sports],” Asher said. “We wouldn’t think anything of someone betting a million bucks on the Super Bowl. For esports, we won’t go anywhere close to that. We take smaller stakes to help guard against any issues with the integrity of the event. When one individual sitting at home can determine the outcome of the event, that does limit the amount of money sportsbooks are willing to accept.”

For an example on how stringent those caps could be, Asher said the maximum amount William Hill would accept on a bet for the winner of the ESL Pro League: North America in CS:GO would be “a few thousand dollars.”

Some oddsmakers believe even that relatively small amount could expose casinos to significant liability, however. Someone who knows how the esports system works can still stretch betting limit restrictions into a decent payday, according to Billy “Krackman” Krakomberger, a professional sports handicapper and founder of Krackwins, highlighted in Showtime’s “Action” documentary series.

“Hypothetically, I could bet $1,000, and then I come back and bet another $1,000,” Krakomberger claimed. “If I were to know the outcome, or if I know someone is dumping, I can get down five or six grand on one event just at one sportsbook.”

A recent scandal has also brought attention back to match fixing — an issue with which esports grappled in its earlier days.

In China, Wang “WeiYan” Xiang, a player for the Rogue Warriors in the League of Legends (LoL) Pro League, was exposed for match fixing. Images leaked of Xiang talking about match fixing in two March matches in which Xiang’s team won one and lost the other.

A few days after the second match, Riot Games, the developer of League of Legends and operator of its esports leagues, suspended Xiang for two years and fined his team 3 million RMB ($425,000).

“Match fixing is definitely an issue [in China],” said Rahul Sood, the CEO and founder of Unikrn, an esports betting company backed by Dallas Mavericks owner Mark Cuban, among other investors. “But match fixing is not an issue in League of Legends as a whole. This was just a strange situation and the punishment wasn’t even high enough. It should have been a lifetime suspension.”

Esports’ history with match fixing is long. In 2010, multiple players for the game StarCraft: Brood War were found tied to a match fixing scheme that ended in a trial. Five years later, another scandal hit StarCraft II. This time, Lee “Life” Seung Hyun, a previous world champion, was sentenced to 18 months in jail for match fixing. Outside of South Korean StarCraft, leading CS:GO team IBUYPOWER was embroiled in its own match fixing scandal for throwing a game against NetGearGuides.

“Match fixing has historically been more prominent in esports than sports,” said Rod “Slasher” Breslau, a longtime esports journalist. “But that was mostly because, back then, those players weren’t making much money. When you aren’t making a full-time amount of money, and definitely not tens of millions like sports athletes, you are more tempted to go down this dark road and have match fixing.”

Being a professional esports player has only recently become a truly lucrative profession. The average LCS salary is now above $300,000 before prize pools, according to Chris Greeley, commissioner of the LCS. With prizes for Fortnite and Dota 2 eclipsing $30 million for one event and teams reportedly paying upward of $40 million for spots in the Overwatch League, the money in esports has increased substantially. That includes player contracts, leaving less incentives to fix matches.

In addition, the industry is better at monitoring suspicious bets. The scandals in 2015 in part led to the creation of the Esports Integrity Coalition in 2015, now the Esports Integrity Commission (ESIC). The commission oversees almost every major third-party esports tournament organizer.

“The ESIC proactively monitors the global betting on ESL matches and investigates any unusual or suspicious betting and has the power to prosecute alleged breaches of the anti-integrity code,” said Ian Smith, the commissioner of the ESIC.

For the Nevada GCB to approve esports bets, the agency must be comfortable with the degree of fair play. The ESIC and GCB have had an agreement in place since 2017 and the recent approval of Riot Games’s and Activision Blizzard’s esports leagues acknowledges solid integrity standards as well. While the regulated sportsbooks that dominate Las Vegas are still figuring out esports strategies, esports figures to be the only action in town for a while, until traditional sports can return.

Mitch Reames is a writer and podcast host covering the business of esports, especially as it overlaps with sports. His work has been published in Adweek, The Verge and numerous esports publications. You can follow him on Twitter @Mitch_Reames.

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