How Will Valve’s Gambling Ban Affect Counter-Strike Viewership? It’s Way Too Early To Tell | THE NEXT LEVEL 028
My Take: It finally happened. The biggest news from yesterday outside of the 1,4975,083,025 more articles on #PokemonGO was Valve’s decision to kill all of the nefarious skin Gambling sites; almost five years after implementing their in game economy within Counter-Strike. As this news just broke less than 24 hours ago, there’s a lot that isn’t known at this point. If you went just by Twitter reactions — because that’s the best way to gauge accurate reaction to something from those in the know on any given Breaking News topic — you’d think that Counter-Strike was being shut down.
Let’s see if I can try to provide some sense of order:
WHAT DID VALVE DO?
It’s great that Valve decided to finally put a stop to this as it potentially could have disrupted their burgeoning eSports industry. However, there’s one big point that I think got lost:
- What if the underage gambling issues never got coverage?
- What if Bloomberg ignored this?
- What if a few YouTuber’s hadn’t exposed the scams?
- What if Brands said nothing?
- What if people didn’t realize YouTube and Twitch were also benefiting from this?
- What if Valve didn’t get sued?
Would Valve have made this move without all of that bad publicity? I don’t think so.
While I’ve said this clearly needs to be done for the benefit of the eSports industry, Valve essentially gets off scot-free. Same for YouTube and Twitch — which released this perfectly timed statement.
Fine, time to move on.
WHAT HAPPENS TO THE MONEY?
I’m sure the Nigerian prince and astronaut behind these Gambling sites are wiring the money back as we speak. Or maybe not.
Early reports have shown that two sites have already been affected. CSGODouble said users are “encouraged to withdraw at their earliest convenience” which is the equivalent of “we encourage those that want to leave Saigon to get on the last helicopter”.
CSGOWild users are also reporting issues with being unable to withdraw:
How much money are we talking about being held?
Perspective: $240K is the average median price for a new home in the US.
WHAT HAPPENS TO THE VIEWERSHIP?
Now this is going to be really interesting to watch. As I already analyzed, research has shown that traditional sports Gambling on lower tier games, Division II College for example, shows a measured increase in viewership tied to betting lines.
You can make that same Counter-Strike corollary. It’s way, way, WAY too early to make any realistic analysis on impact however you may see this affect on the lower level leagues. Which leads to the next few points…
WHAT HAPPENS TO THE TWITCH AND YOUTUBE PERSONALITIES?
If you’ve made the majority of your money via 1) Gambling site sponsorship or 2) Twitch/YouTube gambling related videos — time to find a new job. This will also affect a certain amount of Counter-Strike Athletes.
WHAT HAPPENS TO SPONSORS?
I already looked at the Brand and Sponsor impact from the Gambling fiasco and you will hear some more news on that soon. From my research, outside of TmarTn and ProSyndicate, there are not many non-endemic Brands that have partnered with Twitch streamers/YouTuber’s tied directly to Counter-Strike Gambling. The majority of those sponsors were the Gambling sites themselves.
This is just a case of unfortunate timing but congrats to ESL for partnering with Mountain Dew and hope this isn’t too badly affected. In terms of how quickly this industry moves, next week’s THE NEXT LEVEL was going to focus on Mountain Dew’s lack of investment in eSports this year and their opportunity. Glad to see them onboard and many more on that potential list.
Anyone want to bet if someone at Activision or EA reached out to Arby’s or Buffalo Wild Wings yesterday?
COUNTER-STRIKE CONFUSION
Here’s what I think is the bigger unfortunate issue now — there’s way too much Counter-Strike content which ultimately leads to confusion.
What league do the New England Patriots or the Golden State Warriors play in? A top Counter-Strike team could be playing in at least two leagues on top of separate tournaments and majors — without even looking at players jumping ship or teams getting kicked out of E LEAGUE. Between the Gambling mess that has already caused bad press, in just the last two days, there were two “additional” leagues created:
The below is a private Slack conversation between a few us in the industry that spans Investment/Research/Team owners with names redacted but completely un-edited:
Conclusion: Looks like the previous ESEA Premier is being renamed Mountain Dew League (MDL).
If those on the inside are confused, what’s this mean for the general population or Brands, Agencies and Media companies?
We haven’t even started on what happens to Turner’s E LEAGUE Season 2 or a host of other tournaments and leagues.
And the ESL Mountain Dew League, the ECS League, E LEAGUE and other tournaments and majors — all stream on Twitch.
WHY IT’S BETTER FOR COUNTER-STRIKE IN THE LONG TERM
If you’re eyes haven’t glazed over at this point, good because we’re done. I believe that once the industry has had some time to digest this and all of the mess gets cleaned up — it’s better for Counter-Strike and the eSports industry going forward.
Could we also see a drop in investment? That would be awesome. There’s way too much irrational exuberance in the eSports market right now. There’s millions being thrown around to startups, leagues and teams that are not going to see a viable return.
But that’s totally OK. Once the greed moves on we can start to establish a true framework and infrastructure to grow eSports.
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