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CSGOLounge is the favourite website of many fans of Counter Strike: Global Offensive. The original Counter Strike was released in 2000 and it attracted a huge following almost immediately. The Global Offensive sequel was launched in 2012 and it is currently one of the most popular eSports in the world. More than 10 million of people play CS:GO and there are hundreds of professional eSportsmen who compete for numerous teams.
At CSGOLounge fans of CS:GO can connect, read interesting info on CS:GO teams and matches, and perhaps most importantly, trade items, such as weapons, keys, stickers and other souvenirs, something which is colloquially known as skin trading.
The popularity of the website and the popularity of skin trading enabled ‘skin gambling’ a specific type of eSports betting that was very popular among eSports fans, especially fans of CS:GO. In short, players were able to bet on CS:GO matches using their skins. The skins are worth real money on Steam and other similar platforms.
For example, if a player owns a weapon that is estimated at $5 and they wish to place a wager on a selection at odds 2.00, they will either win another item worth also $5, or lose the item that they wagering in the first place. It functions just like normal betting, but instead of regular or crypto-currency, punters use in-game items.
CSGOLounge wasn’t the only website that allowed this type of betting. There were many other third-party sites which allowed players to wager their items, not only on eSports bets but also on slots and other types of fixed-odds casino-style games. Some claimed that there is nothing illegal in this, as players don’t really wager really money.
However, there is a catch. Namely, the items (skins) have a real money value and they can be bought and sold. As a result, people could lose items worth thousands of dollars. Moreover, most of the websites that offered skin betting weren’t actual betting sites. They weren’t regulated and no organisation was entrusted with the task of regulating them, which means that punters were in no way protected.
Not only were the skins betting websites operating in a grey area, there was also another problem. Many of the CS:GO teams were affiliated with some of the item trading websites, including CSGOLounge and often, teams received direct payments from purchases, especially since some of the stickers represent teams and players. These stickers can be used for betting, which means that the teams are directly linked to betting on events in which they participate.
It was pretty clear that this could have an impact on the game. In 2015 players had to be banned, because it was proven that they participated in match rigging. Namely, players wagered against their opponents using a third-party skin betting site and then lost the match on purpose. Following the banning of the players, Valve issued a statement in which it was stated that CS:GO players, managers and other team staff should not, under any circumstances engage in skin betting, or even be associated with high volume punters.
You can read more about skins, betting with it and other problems in our dedicated page on skins betting.
However, despite Valve’s public statement, not much was done. CSGOLounge was, at the time, probably the largest skins betting site and a representative of the site publicly stated that Valve has even provided technical support for their operations. Another incident soon followed. Two skins betting aficionados created a skins betting website which they marketed on their YouTube and other social media accounts, without disclosing the fact that they own the website. They filmed themselves ‘winning’ items worth thousands of dollars without admitting that they own the website.
Game items have been traded online since the early days of the internet and probably thousands of items have been bought and sold over eBay and other similar websites. However, the situation with CS:GO skin betting is completely different, as items can be used to play unregulated casino games and in many cases the participant’s age cannot be verified, which probably violates the laws of many countries. It can be said that skin betting became an integral part of the CS:GO gaming scene as a whole.
With the so called ‘item drop’, weapon skins and cases are awarded to anybody who plays CS:GO. The cases contain guns, knives and other items but they can only be unlocked with keys. The keys can be both for $2.49, or acquired through trading with other players. Since Valve (Steam) offers a trading API, third party sites are able to organise large scale betting, and this is basically howskin betting came about.
CSGOLounge was the largest skins betting site. In 2016, in March alone, about 38 million people visited the site and the site’s Steam group has more than 500,000 members. Often, up to 50,000 punters placed bets on a single CS:GO match with the number of wagered items reaching up to 200,000.
Skin betting is encourages punters to visit the Steam market and buy new items, and it also encourages them to play more so that they could acquire more items. In other words, skin betting directly contributes to the popularity of the game. Valve used to earn about 15% from every CS:GO item that was sold through the website.
Those who defended Valve and the betting sites like CSGOLounge claimed that skins betting is in no way illegal, even in countries where conventional betting is, as there is no currency involved. Skins betting proponents argued that skins are only assigned value within the game and are otherwise useless outside of it.
During one court case, the US Federal Court concluded that as soon as a punter exchanges their real money for a virtual object (skin), they no longer possess something that has a real value and therefore their subsequent betting losses are not considered to be betting, because they haven’t wagered actual dollars, but ‘something whimsy’.
However, this decision was not regarding skins betting, but betting on another virtual game where the items can’t be exchanged for real cash, which is the case if you’re betting at CSGOLounge.
In the summer of 2106 CSGOLounge company announced that it will no longer be a betting platform for punters from countries that prohibit eSports betting. With this decision, the site admitted that skins betting actually classifies as betting. Furthermore, the company also announced its plans to register as a legitimate eSports betting site, where punters would be able to deposit and wager real money on CS:GO and other eSports tournaments.
This decision of CSGOLounge followed the report issued by Valve earlier that summer in which the company pledged to stop skin betting. Valve finally admitted that skins betting is not regulated and urged all third-party websites to stop using its API for providing betting purposes, claiming that all those who continue to do so are violating the terms of service.
This U-turn by Valve confused many of the third party websites that offered skin betting, but most of them chose to comply with the recommendations, fearing legal consequences. Despite the fact that CSGOLounge initially decided to limit skins betting and prevent only punters from certain countries from engaging in skin betting, only two weeks later CSGOLounge issued another statement.
The new statement declared that the company ceases to offer skins betting to all customers with immediate effect. Most punters were quite surprised the decision and there have been suggestions that this was a result of increased pressure from Valve. The company that owned CSGOLounge intended on sponsoring international tournaments and apparently they didn’t want any negative reputation.
The same operator owned another skin betting website called Dota2Lounge which offered similar services to Dota 2 fans, and that site was also closed on the same date. Many argue that this was the effective end of skin betting as CSGOLounge was by far the most popular skin betting site.
CSGOLounge still exists and it still is one of the most popular sites for CS:GO fans, even though it doesn’t offer skin betting anymore. Nowadays, if you register at CSGOLounge you would be able to trade your CS:GO items with other players, but you will not be able to use your skins for betting purposes.
Association with match rigging and the fact that there were no strict age controls seem to have made a negative impact on skin betting which caused the closure of the most popular websites. There are still sites which offer skins betting, but it has to be said that its popularity has definitely decreased. A return of skin betting cannot be ruled out, but it is clear that if skin betting is to become popular again, the authorities will certainly take measures beforehand and the market will be regulated.
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