MSI eSports demo - PAX 2015

Videogames have become a huge spectator sport, but it also has the potential to add up to a real business thanks to introduction of Las Vegas-style gambling.

In a report released last month, titled “eSport Betting: It’s Real, and Bigger Than You Think,” researchers Chris Grove and Adam Krejcik at Eilers Research attempt to estimate exactly how big the market will become.

In 2015, they project that 2.3 million eSports viewers will wager $315 million on games to generate total industry revenues of $24 million. In 2020, it projects those numbers to skyrocket to 19.4 million viewers betting $23.5 billion to generate total industry revenues of $1.81 billion.

For the purpose of the report, Eilers looked at two major types of betting: eSportsbook wagering, which is similar to traditional real-money sportsbook wagering and fantasy eSports, which is akin to fantasy football. A third area, which is called “game-mediated betting” allows people to wager items in stead of cash (like weapons, abilities, cosmetic upgrades), but that was not included in the industry estimates.

unikrn homepageEilers reports that Seattle-based Unikrn is the most visible of the sportsbooks, thanks to well-publicized funding events by investors including Ashton Kutcher and Mark Cuban. But it adds that Unikrn is definitely not the largest. The group also includes EGamingBets, VitalBet, Pinnacle and Betway. Meanwhile, the fantasy eSports sector is led by Vulcun and AlphaDraft, and despite the name, they both deal with real money.

“Online sportsbetting is a multi-billion dollar industry and Unikrn is a pretty small fish in that bigger pond,” said Grove, one of the paper’s researchers. “But they’re growing, and are likely to be in a good position to continue that growth as more and more of the broader online gambling market wakes up to the potential of eSports.”

 

The industry, however, is relatively new. It reports that Pinnacle took their first eSports bet back in 2010, but it wasn’t until recently when other sportsbooks started to take notice, with Bet365, William Hill, and Bodog all adding eSports within the last year.

One of the main drivers of the wagering industry getting interested in the space is the sheer size of the eSports audience. For instance, the 2014 League of Legends finals drew a 27 million-person audience, which exceeded the number of U.S. viewers for the 2014 World Cup.

esports audience

 

But not all games are created equal, and only a handful of games account for a majority of the eSports prize pools. All markets are also not equal, with China and the rest of Asia dominating, but Europe and North America slowly catching up.

esports popular games

 

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