NBA Commissioner Adam Silver announces the No. 1 overall pick during the NBA 2K League Draft at Madison Square Garden on April 4, 2018 in New York City. (Photo by Mike Stobe/Getty Images)
The U.S. Supreme Court Decision about sports betting was a win for Mark Cuban, and not only because he’s the owner of the NBA’s Dallas Mavericks. Traditional sports owners with a vested interest in esports, such as Cuban, stand to gain doubly from relaxed wagering rules in the U.S.
Cuban believes gambling will increase interest in sports overall, which would have a trickle-down effect touching everything from in-arena operations to streaming. Since esports fall under the same gambling purview as traditional sports, that means teams with esports ties, such as the 17 NBA teams participating in the NBA 2K esports league, potentially could gain twice as much.
Cuban’s Mavericks and NBA 2K team Mavs Gaming, for example, might each be buoyed by the rising gambling tide, feeding off one another and increasing revenue across the Mavs organization.
“I think it’ll double the value of professional sports franchises in a second,” Cuban told ESPN shortly before the court announced its landmark sports betting decision in early May. “It’ll increase interest, it’ll add to what happens in our arena and in stadiums, it will increase the viewership for our biggest customers online and on TV. You start betting on 2K, and prop bets on 2K, and it just explodes.”
It’s unclear how the gambling landscape will take shape once all the regulatory kinks are ironed out. It’s also unclear how betting on traditional sports will differ from that on esports, as both are uniquely different properties with their own bettable features. Both will undoubtedly rely heavily on real-time data and real-time in-game bets, which would drive interest in live events and have trickle-down revenue effects.
Billion-Dollar Esports Betting Market
Given the worldwide popularity of esports, the esports betting market might end up being its own animal entirely. The global esports betting market is expected to reach $6.7 billion in 2018 and could double to $13 billion by 2020 as esports maintain their meteoric growth and the U.S. eases restrictions on wagering, wrote Eilers & Krejcik, an esports gambling research company, in an April report.
Since the May 14 Supreme Court announcement, there’s been an influx of companies making acquisitions, striking deals and announcing new products to become better positioned to leverage the betting opportunity across sports and esports.
Cuban, for one, might benefit threefold from gambling as an investor in the blockchain-powered esports bookmaking company Unikrn, which has an established presence in Europe and has been waiting to enter the U.S. market. Unikrn announced a $25 million funding round in September, and its investors celebrated the SCOTUS announcement loudly in the hours and days following.
“In the last few hours, our dream became real, and our company just became substantially more valuable,” wrote Unikrn CEO Rahul Sood in a Medium post shortly after the court ruled that U.S. states could make their own decisions about sports betting. “LET’S GOOOOOOOOOOOOOOOOO!”
Last week, FanDuel announced that it would be acquired by U.K.-based betting house Paddy Power Betfair in a deal that will give one of Europe’s largest bookmaking companies access to the U.S. market. However, DraftKings, FanDuel’s biggest U.S. competitor in daily fantasy sports, has a more established presence in esports with its League of Legends fantasy games (the company’s fastest-growing fantasy category last year) and said last week that it’s also open to acquisitions.
On May 24, esports sportsbook Rivarly.gg announced that is was launching live, in-play betting, which allows bettors to wager throughout an esports match on a variety of in-game events and outcomes.
Skin Betting And Operator Support
While the vast majority of esports betting has taken place on foreign sites, Bryce Blum, a founding partner of the esports-focused law firm ESG Law and the outside general counsel for Unikrn, predicts money will be pulled into the U.S. as regulation allows.
He also believes that with gambling legalization, real-money betting on esports could potentially begin to outpace skin betting, which is the practice of buying superficial virtual goods that esports fans can use to trade and wager on game outcomes.
“As sports betting goes up so too will esports betting,” Blum said. “By unlocking the market for real-money wagering, we’re going to see more real-world money [in esports] than we’ve seen before.”
It’s important to note, however, that video game makers aren’t particularly ahead of some traditional sports franchises, such as the NBA, when it comes to supporting increased regulation for sports betting.
That might put some games with significant backing from traditional sports leagues and owners that support gambling, such as NBA 2K, ahead of game makers that are less willing to take action. That’s simply because those who support gambling will work to ensure that their games maintain a level of integrity and integrate betting more within their live events, which will trigger that trickle-down effect. NBA Commissioner Adam Silver has been one of the most vocal supporters of gambling, and has proposed a league-wide integrity fee that would protect the game and give league franchises a piece of the pie.
Some esports operators have worked with the Esports Integrity Coalition, which is working to ensure that the integrity of esports aren’t affected by new gambling rules. But Blizzard-Activision (which runs the Overwatch League) and Riot Games (which operates League of Legends) have stayed away from the issue. Neither company returned a request for comment about the gambling decision.
“We’ve seen major sports leagues changing their tune on this significantly over past few years. Silver has found people are going to bet on this sport whether you like it or not,” Blum said. “But in esports? To date we are not ahead of the curve of that issue and I’m weary of a world in which there’s more betting in esports without publisher support. I think if you’re a realist and look at the data, betting is happening whether you like it or not. You can ignore it, or be a part of it.”
