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Last Updated: April 28, 2017

Skin Betting

The Concept of Skin Betting

In order to understand ESports skins betting it is necessary to understand precisely what a skin is.  This is not comparable to a skin in a game of golf which is to say that a player wins a particular amount for winning a certain hole, ESports game skins have nothing to do with that. 

ESports game skins are simply character or weapon add-ons that are customizable upgrades to the standard character of the game.  They may also consist of items that can either be held onto or used during actual gameplay.  Many of the individuals who choose to bet using these video game skins do not necessarily intend to actually use their skins in game, but rather, intend to sell them for cash on something known as a marketplace.  

Skins can range from anything from guns themselves, to custom clothing, to custom covers for a gun to special knives and really anything you can imagine that pertains to the game.  Furthermore, some skins are extremely common whereas some skins are quite rare and, therefore, valuable...at least temporarily.  Skins can be unlocked when an individual purchases them directly, and occasionally, the game itself will give you skins for the completion of certain tasks.  In that sense, not all skins need to be bought with cash money, though they certainly can be.  

For those who actually want to play the game in question for themselves, many of these skins will enable a player to win more easily because they are not all aesthetic in nature.  Some of the skins are substantially meaningful powerups that can be used to generate a more powerful character than the player had before.  Many of these skins might also consist of rare and powerful weapons that make it easier to destroy enemies, bosses and other players during actual game play.  

Unfortunately, using the marketplace for the buying and selling of skins, the skins in many cases have come to replace actual cash and to serve as nothing more than a surrogate for money for the purposes of placing wagers on ESports events.  Many of the wagers in question have been placed by minors and continue to be placed by minors.  

The skins are also not necessarily always used for the purpose of betting on ESports.  Many sites have popped up throughout the last several years that have enabled bettors of skins to make a wide variety of wagers on a wide variety of games by way of betting skins in order to win other skins.

There are any number of fairly egregious examples out there, but some of these websites have actually operated casino-style games and have allowed the betting of skins in playing the games.  The player in question simply deposits his/her skins onto the site and is awarded with a certain amount of credits that can then be used for betting on the games.  If the player wins, the player then can go back in and use the credits to purchase skins from the site, assuming the site allows the player to do that rather than simply absconding with the skins and selling them on the marketplace.  

Furthermore, there is no mechanism in place that even remotely ensures the fairness and integrity of the websites in question of the games offered thereupon.  Whereas online casinos are generally licensed by a particular jurisdiction that actually has agency and clout in ensuring that their rules are followed, the owners of these skins sites are regulated by none other than themselves.  They play by their own set of rules, which is that the rules are whatever they feel the rules should be at the time.  

Even if someone could prove that the casino software is gaffed on those sites and that the players are not getting a fair shake, there is nothing anybody could do about it as there is no agency to report it to.  In fact, there’s even some question of whether or not what is taking place could even theoretically constitute an actual crime since no currency is changing hands by way of the betting.  In fact, since these are nothing more than items for a video game changing hands, it could reasonably be argued that nothing of value is being won or lost.  

In addition to the table game type websites, some websites also offer slot or video poker type casinos which may or may not be fair and random, but more likely than not, are not.  Once again, the player may occasionally bet the skins directly, but will also often deposit the skin in exchange for credits for the site.  The player then has the opportunity to attempt to win more credits to acquire more skins in order to keep the game going and theoretically attempt to achieve a profit.  

Unfortunately, those games, too, are likely gaffed and even if the player does win there is no meaningful mechanism in place to ensure that the player gets paid.  The owners of these sites are often essentially nameless and faceless and can very quickly shut the site they are using down whilst having others at the ready to guide the unsuspecting players, generally minors, to.

Some of the other types of sites that allow the use of skins for the purpose of betting are those upon which an individual actually bets on ESports events.  Unfortunately, many of the ESports competitions are nothing more than one player playing another online and streaming the event.  What has happened, on several occasions, is that a player himself will own one of the betting sites and will enable a bettor to place a number of bets on him (even though the bettor doesn’t know he owns the site) the ESports player will then throw the match and collect all of the profits.  

Many of these ESports players have went to great lengths to try to bilk their followers.  For example, several of these ESports professionals have openly advertised for a site that they, in fact, own without disclosing their ownership interests.  This will then compel some of their fans to visit that site and place some bets on their preferred ESports player of choice.  Again, when a substantial enough amount of bets has been placed that it seems worthwhile to do so, the ESports player will simply tank the match and collect all of the profits.  

Another example of the use of skins is sites that accept the skins for the purpose of traditional sports betting.  The sites will usually offer lines that are worse than what can be found in Vegas or other offshore betting sites.  Perhaps worse is the fact that these sites will also occasionally refuse to pay players who do win or find excuses in order to be let out of their bets.  

The entire industry is as shady as it could be in terms of the skins betting and that is why Valve/Steam has went to great lengths in an effort to shut down the largest of the operators.  As if the fact that many of the games are rigged and winning players will often not be compensated anyway is not enough, it should also be considered that these entities are essentially directly targeting minors.  Again, since ESports betting is a perfectly legal, licensed and regulated form of betting at a few reputable online casino sportsbooks, adults who want to bet with actual cash can simply go there to bet.  

How Do the Skins Work?

The skins basically take the place of currency as a surrogate until such time that a player decides to convert them into actual cash.  Unfortunately, when it comes to the skins, the only place at which they may be sold for actual cash is the Steam marketplace which can be found here

The Steam marketplace is interesting because it is a fully self-contained market.  Players can do many things with their skins that do not require them to sell them in the market, such as trade them from player to player, but they can only be sold from cash in the marketplace.  

A player does not necessarily have to buy skins from the marketplace in order to acquire skins, but that is the easiest and quickest way to get them.  As a result, anyone addicted to playing on the betting websites associated with the ESports will have a tendency to buy skins from the marketplace because that is the quickest way to get back into the game.  

In addition to the fact that they can be traded from player to player, one player may simply choose to give another some of his skins.  In fact, doing this in-game is just one of the ways that deposits into these illicit third-party sites are initiated and then the credits associated with that player are added after the skin(s) are, “Dropped.”  Furthermore, skin v. skin bets (straight up) do occasionally take place and that is another means by which a player might eventually acquire more skins.  

Skins can also be acquired organically by playing the game, but when it comes to getting the rarest of the skins available that is one of the more difficult ways to do it.  People who are looking to get back into the gambling aspect of the third-party websites operating without the consent of Valve/Steam will want to buy themselves back into the game by purchasing quality skins.  

The skins market itself (in terms of buying them from other players) actually operates and tracks statistics very similarly to the stock market.  By using the link above, you can click on any item you like and see the Bid/Ask prices and quantities as well as a price history of what the item has sold for throughout the item’s history.  In the case of most of the items on there, with exception only to perhaps the newest ones, they will be selling at less than their all-time high and will often be very close to their all-time lows.  

It is for that reason that playing around with these third-party websites is something of a two-pronged game.  The person playing with skins on these sites is not only hoping that the skins that they win in exchange (assuming they actually get paid on wins) will be paid to them promptly, but also that the skins in question will also hold their value while the betting games are taking place.  The fact of the matter is that even winning bets are not going to do a player much good if the price of a skin has dropped substantially in the meantime.  

If you were to click around on several of the items, then you would eventually see what we mean.  There often comes a time that a particular skin is simply considered not even close to as valuable as it once was, perhaps more of them are released.  When that happens, the price of one of the skins can often plummet as much as 50% over the course of just one or two days.  To wit, a player could win an even money bet and double his one skin into two skins, but if the two skins are worse less than 50% at the time he sells them, the player has lost some money anyway.  

Furthermore, the actual Steam Marketplace should not be considered immune to what we will term, “Skin Manipulation,” which is to say manufactured sales to make it appear as though a skin has substantially more value than it actually does.  Alternatively, a shadow sale may be conducted at a very low price to compel others to get rid of a particular skin that may then be seen as a weak performer before it crashes even harder, a short-sell of sorts, but then the group orchestrating the temporary price fall hurries up and buys a bunch of the skins at the new price and controls the market for them thereby raising the price on the skins back up.  

That probably doesn’t happen with every single skin, but anybody with even a modicum of knowledge concerning the traditional means by which a currency or stock price can be manipulated should have some idea how to go about doing that.  It really is not a terribly difficult act to perform in an unregulated market, which the Steam Marketplace certainly isn’t.  

The other kicker is the fact that it is not good enough for your skin to sell at the same price for which you bought it, it is actually important that it sell for close to 18% more than that in order for the buyer of the skin to break even.  The reason why is because Steam takes a full 15% of every player to player sale of skins that takes place on the Marketplace.  And, again, the Marketplace is the only location in which an actual cash sale of skins can actually take place.  

For that reason, some would think that Steam/Valve would not exactly have a ton of motivation to prevent the illicit third-party gambling sites from operating because those sites generate more sales on the Marketplace which result in greater profits for Steam.  Fortunately, even though the entire thing is undoubtedly a cash cow for them, Steam/Valve does appear to be showing some interest in shutting down the largest of the third-party websites that facilitate gambling for skins.  It is not typical for a company to act against its own financial self-interest, so I have to give credit where credit is due on that one.  

It is believed that an alternative form of currency, though convertible into cash, might eventually find its way into this sordid market and will take the place of skins for the purposes of betting ESports and for playing gambling games on these third-party websites.  The reason why it works so well is because the gambling is essentially a front for itself.  When someone looks at the credit card statement when a skin is purchased, for instance, it looks like nothing more than a video game related purchase.  It is for that reason, as well as others, that minors are able to access the betting games.  

Access to Minors Should Be Illegal

The third-party websites that operate the betting games of various varieties for skins will generally have no age verification whatsoever, but even if they do, it will often just consist of putting in any birthday you want or clicking a box that says you are old enough.  Once again, an adult has virtually no reason to gamble using the video game skins or to play any online casino games or make bets with anything other than cash because the adult has access to websites that are far more secure.  The fact of the matter is that the third-party websites essentially do everything they can to attract bettors who would otherwise be too young to gamble.  

Once again, the purchases that are made through the Steam Marketplace will appear on credit card statements as nothing more than a video game purchase from a video game company.  Provided a parent actually allowed a child to use the credit card for that purpose, this will be seen as no cause for alarm.  Unfortunately, the child might be simply purchasing items to make playing the game easier, but it is just as likely the child is purchasing skins to use as a replacement for cash in order to gamble at these third-party websites.  

There is nothing on the credit card statement that appears that would give a parent even a hint of the fact that the money is going for gambling purposes in a roundabout way.  Furthermore, the child can cash out (in the rare event he or she does win and sell the skins at a profit or for some money back) using a prepaid credit card or debit card of some kind.  This technique would also be a pretty good way to get as much money as possible off of a fenced credit card and then convert it back to cash, the only problem being that huge 15% haircut that Valve takes off of the skin transaction and the fact that the credit card transactions would more or less be traceable.  

However, that does not mean that there is no illicit or unlawful credit card usage related to these purchases.  In many cases, the minors themselves have wrongfully acquired the credit card of their parents and are using it without their permission hoping that they don’t notice.  Furthermore, the minors could also take some sort of money and convert it into a prepaid debit or credit card (available at most major retailers) that can then be used to purchase the skins for the purpose of gambling.  

Not only are these third-party websites providing minors with the means to gamble, which should be considered completely illegal in and of itself, and likely would be if a direct link to cash could be proven, but they are making the kids play unfair rigged games in the process.  If not rigged, then consider those instances that a player has orchestrated his followers to place several bets on him at a website that he owns followed by him tanking his match and keeping all of the money!


Written by: Brandon James

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