Thoughts on Gambling Business Concept

[Lerk]

Hello TFF, today I have a business concept that I would like to share and I would like your opinions on why it is viable. In this business concept, gambling is not done with fiat currency but rather with virtual skins that are worth money. First I would like to introduce my analysis on the current state of gambling using virtual skins. Currently, the two most popular video games that had virtual skins used in gambling is PLAYERUNKNOWN's Battlegrounds(PUBG) and Counter-Strike: Global Offensive(CSGO). Both of these games can be purchased on Steam. Steam is a digital distribution platform developed by Valve Corporation. Valve has been taking action against CSGO gambling websites since last year. This started with a cease and desist letter to 23 gambling websites that used virtual skins as the items that can be deposited for on-site currency and can be withdrawn using on-site currency. This didn't really stop the gambling businesses that were launched after the cease and desist letter in any way because the cease and desist was only sent out once for those 23 gambling businesses. The other way Valve began taking action against CSGO gambling businesses was banning the bot accounts which held all of the site's items because they were being used for commercial purposes, which is against Steam's TOS. To be completely honest this did not affect these gambling businesses at all. They were still making millions. They did lose hundreds of thousands of dollars in virtual skins. I haven't really spoken about the popularity of these websites, but it is very high. From speaking with web developers who worked on these websites many rakes in over hundred thousand dollars a week. That's right a week, now this isn't a popular market and not many attempt to create these websites but they do have a solid return for the start-up costs. Then Valve completely killed CSGO gambling by enabling a one-week trade ban for all CSGO skins. Now I sat down and started to analyze why they did this because Valve was also profiting from CSGO gambling. PUBG gambling at the time was a very small scene. As soon as the ban happened, gambling businesses searched for a way to work around the situation but they understood that there is literally nothing they can do. Within days they completed switched their sites to support PUBG gambling. That's when the PUBG gambling scene blew up. Now what I think that is going on is that Valve and PUBG Corporation, the company which developed and published PUBG are working together. They would most likely be working together to attempt to rake in more money than Fortnite is currently making. Fortnite made $223 million in revenue in March. The month before that they made $126 million. They have surpassed PUBG's monthly income when they made $126 million in February. I think creating a PUBG gambling website would be very profitable but it would have start-up costs going into the range of $15,000-$30,000. It's just a business concept at the moment and I don't know if it's worth pursuing. Certainly, I lack the funds but gambling businesses that involve virtual skins have been around for years which gives me time to get into it. Looking to hear your thoughts. In regards to age, there is an issue but the majority of these gambling websites are run by 15-18-year-olds. It's crazy because the most profiting website at the beginning of 2018 was owned by a 16-year-old who raked in $180,000-$250,000 as his peak revenue amount weekly. The hype is the same because everyone has moved on to PUBG gambling, no one is in it for the type of skins. They are in it for the thrill. Oh and if you didn't know yet, the majority of all people gambling are minors which is f*cked up. I think this type of gambling is much fairer though because CSGO and PUBG have these things called "cases" where all virtual skins come from. It costs $2.75 to open a case using a key for CSGO, and for PUBG the price varies per key to open a case. The situation is really screwed up but somehow they have gotten away with this without calling it gambling. Even though there are odds to win a skin that is good or bad. Most skins that people get are worth $0.01-$0.10. The same thing goes for PUBG. Valve has made far more from this than any gambling business will make. The same thing goes for PUBG Corporation. Both games do not display the odds for cases, but with online gambling, most sites display the odds and even if they don't they are much fairer than the odds given by the actual in-game cases. There are many types of gambling websites that offer different game modes. This is important to take note of case opening with fairer odds is not as sinister as what Valve and PUBG Corporation are doing. Thoughts on this business concept?

 

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[Domine]

Hello. I've been in this industry for some time.

I think that answer to your question is in your post already. It was a VERY profitable business, with low entry point, but lacks of control because if Valve wants, they can f*ck you over.

But i dont think it is as profitable and easy to do now because of below.

Valve killed CSGO gambling, and PUBG disabled trading too:
PLAYERUNKNOWN'S BATTLEGROUNDS :: Temporarily Turning Off Personal Item Trades

Also, on the scene there was MASSIVE amounts of scammers. If you were about to setup a site like this, it is pretty much a gamble for you if the person you co-work with will scam you or not. And the odds are not in your favor, unless you can code a site by yourself. It was pretty much a wild west.

I dont think that valve cares that much. Of course they were making money off it, and CSGO blew up thanks to this but at some point they just HAD to do something and so they did. I even think, that they postponed it in time as long as they could.

However, i dont think that steam gambling sites industry died. In my opinion there's still money to be made but not exatcly related to PUBG or CSGO.

 

[Late Bloomer]

You really need to learn how to add some blank lines, to make paragraphs.

Like I'm doing here.

It makes things so much easier to read.
Would you be willing to edit your post, so it's not one massive wall of text that's very difficult for people to follow?

 

[Late Bloomer]

Your business concept has several huge risks that are totally outside of your control.

1. Gambling is heavily regulated in most nations, states, and localities. It might be illegal for you to offer a gambling service, depending where you're located. It might be illegal for your customers to participate in a gambling service, depending where they're located. Even if it is legal, you might have to prove to regulators that you are suitable for a gaming license, and that you have enough funds in escrow to cover the maximum expectable payout.

2. You are trying to sell something that's a derivative and totally dependent on someone else's intellectual property and platform. The major game publishers have a lot of money they can use to keep attorneys busy. Even if you ultimately win a lawsuit, they could tie you up in court with aggressive legal maneuvers that could make you broke if you don't give up. This in itself is a HUGE gamble, that's far bigger than any gambling on skins.

3. The game publishers themselves could set up their own marketplace, on their own or perhaps as a joint venture with an already established blockchain company, and totally cut you out of the picture. Another giant gamble.

I really recommend you look more closely at MJ's principle of Control in business.

 

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