The esports betting industry had humble beginnings. Laws in several countries banned online betting sites, and we still have not achieved complete liberalization on a global level. However, this market is moving forward, and it achieved massive growth in 2020 alone.
In 2020, the worldwide revenue from the esports market has reached $950.3 million. By 2023, the value is expected to reach almost $1.6 billion. This revenue mostly comes from advertising and sponsorships, but a big part is also from merchandise and tickets, publisher fees, media rights, and streaming.
How did we come this far? Are you interested to know more about the history and growth of the electronic sports betting industry? We will focus on predictions about its future, too.
The Basics: What Is Esports Betting?
The term esports encompasses professional, competitive, and organized video game playing. By now, the esports industry has reached a point when professional teams compete on a level of pro athletes. They spend hours of training and playing. The teams develop tactics and strategies, and focus on championships valid millions of dollars in prizes.
The subgenres of esports are countless, but the most popular ones include:
- EA SPORTS FIFA
- NBA 2K
- Counter-Strike: Global Offensive
- eFootball Pro Evolution Soccer
- World of Warcraft
- League of Legends
- Dota 2
- Call of Duty, and more
How did Esports Betting Begin?
Electronic sports seem like a new thing to most people who have not been acquainted with the term. However, its beginnings root back to the early ‘80s. The first stage of esports was called the Arcade Era. In the ‘80s, the Atari Space Invaders tournament attracted nearly 10K participants. This event marked the beginnings of electronic sports. As more sophisticated gaming consoles started appearing in the ‘90s, the tournaments were brought to a whole other level. 1996 marked the beginning of the Street Fighter 2 tournament, which turned into an annual event.
With Xbox Live being released in the early 2000s, the players got an opportunity to compete with others from their homes. With Counter-Strike and StarCraft, the industry boomed. The 2010s were marked by Dota 2 and League of Legends, which started crafting the first professional gamers in history.
Nevertheless, when did the bets start? If you read more information about the best esports betting sites, you’ll notice that the year of 2010 is considered to be the most popular period for esports in general. FanDuel was founded in 2009, and DraftKings came in 2012. Their esports betting offers attracted a great deal of attention around the world. The industry was consistently growing, and it reached a massive peak in 2020.
Somehow, the esports betting industry was able to avoid betting bans in the USA. The Supreme Court repealed the PASPA (Professional and Amateur Sports Protection Act) in 2018. From that point, each state got the right to develop its own rules for sports betting. However, eSports does not fully fall under the category of sports wagering. Therefore, U.S. citizens have been able to place their bets on esports tournaments even while the PASPA was in force.
A few states took a definite stance, with precise regulations that legalize esports betting: West Virginia, Tennessee, New Jersey, and Nevada. Given the fact that the industry is growing and bringing revenue from taxes to these states, it’s reasonable to expect other legislators to consider including esports betting in their regulations.
What’s the Future of the Esports Betting Industry?
Many online sportsbooks include esports in their regular offer. This industry still has not reached its full potential, but it is moving forward. Since Nevada legalized wagering in this category, the reception has been mediocre. It seems like the audience is still more interested in online sports betting and fantasy sports when compared to esports. Still, the demand is growing, especially with the global events in 2020, which forced people to stay at home and seek new hobbies.
Bettors have doubts about match fixing, and that’s what prevents most of them to engage in this type of wagering. Nevertheless, investors and insiders strongly believe that the industry will become more popular and stronger in the decade that follows.