Isle of Man issued the world's first license for skin betting
On 11 August this year, it was announced that a gambling regulator of Isle of Man - Gambling Supervision Commission (GSC) - staged a coup in the gambling industry, having issued the first skin-betting license in the world. It was obtained by the eSportsPools (ESP.bet) Internet portal providing various bets together with bets on eSports.
Skin betting is referred to as a type of online betting on skins - virtual objects that enhances a gameplay appearance or game character's level. These are not bets for real money but on virtual goods and game objects of their own cash equivalent.
As early as February this year, the Isle of Man Gambling Supervision Commission informed on pending changes in gambling regulation within its jurisdiction. GSC expressed the need to take into account the latest trends of rapidly developing Internet environment.
Legislative reforms will also affect cryptocurrency transactions, such as Bitcoin, and anything that is a virtual monetary equivalent, including skins.
Today, skin betting has gained a real value demonstrated in the following figures. According to mass media, in 2016, a total amount of sold skins is over $4.9 billion worldwide. This is approximately 88% of the total approximation of eSports betting. Real money bets amounted to only some 12% from the overall.
The eSportPools' CEO, Scott Burton, believes that an acquisition of such license is an important step in the development of betting industry. "Until this day, bets on fantasy esports and games with virtual goods were mostly considered as gray market, and therefore many operators could not protect their clients. We always take a more transparent approach in order to launch an understandable game system. Our activity is approved with this license and I think that we have made the first step towards a creation of regulated market that is safe for all customers, operators, and investors.”
A specialist on licensing and a director of Boston Multi Family Office, Alex McNee, underlined the importance of this license for the rapid growth of the eSports market: "Current global incomes of eSports surpassed the $1 billion level. We can see that the industry is still experiencing a growing demand since many specific betting markets are still developing. Operators need a license to ensure long-term growth that will cover different fields such as digital currencies and virtual goods. And the issue of such licenses by Isle of Man is a huge step forward."
The skin betting is the most demanded kind of gambling among online casinos, lotteries, bets for various sporting and nonsporting events.
The increase in its popularity is due to one psychological factor: The user is not paying with real money, but with the virtual items that have already been purchased or won, which are easier to loose.
The second reason for the betting's popularity is that it is available to minor players who are not allowed to play at official betting houses and online casinos.
Features of obtaining license in this jurisdiction are described in our article "Isle of Man gambling license".
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