How One Esports Gambling Site Still Offers Skin Betting Despite Order To Stop

Written By Will Green on August 29, 2016 - Last Updated on January 22, 2018

[toc]A letter dated July 19 from game maker Valve Corporation to skin gambling website CSGOFast ordered the website to stop using Valve’s API, Steam, to facilitate commercial transactions such as skin gambling.

Over a month later, through a circuitous and slightly altered process, Fast is still offering a skin gambling option, and appears to even still be using Steam to do so.

While US users are unable to fully access the site without using a virtual private network that masks their geographic location, gamblers in most other countries, including Russia, Germany and England, can access Fast and facilitate both casino-style and Counter-Strike: Global Offensive sportsbook-style bets using a variety of payment options.

Consumers outside the US appear to have an even larger menu of payment options by which to fund their Fast gambling accounts than they did before Valve’s crackdown.

This makes Fast one of the few sites that has successfully flouted Valve’s demands for more than a few days. It is showing no signs of slowing down.

How it all began

The tactics allowing the Seychelles-based site to brazenly continue and in some cases extend its operations are a mixture of jurisdictional avoidance, embracing a real-money esports betting model, and leveraging the Steam marketplace to facilitate skin transfers around the periphery of gambling activities, as opposed to transacting skin payments that directly constitute gambling proceeds.

On July 25, Fast announced it would shut down within four days. By August, American users looking to play the site’s games or fund their accounts were met with a message explaining the site’s draw down.

“Dear friends,” the note read. “In light of the recent announcement from Valve CSGOFAST has decided to close operations. All bots are stopped now, games are not functioning. Thank you for being a part of this amazing project.”

The announcement claimed the primary capability of bettors to wager skins on the outcome of casino style games—logging in to Fast with one’s Steam account, depositing those skins on Fast as a currency by which to wager, then using a system of automated Steam accounts to withdraw winnings—was disabled.

Even if it had not dismantled that system, the note still implied that its skin-based casino-style games such as roulette and jackpot, which had been offered worldwide, were no longer offered at all.

Effectively, Fast was saying, it was dead.

But it isn’t dead at all. In fact, the gambling site is stronger than ever.

Follow the money

While American users are blocked from funding their account or wagering on games at every turn, European users looking to fund their accounts and bet on Fast are funneled to a new, robust menu of depositing options.

Users attempting to refill their coin balance are first met with an apparent “Know Your Customer” protocol in the form of an age verification. The site appears to ask users to verify they’re over the age of 18 by asking them to check a box indicating so.

The box, however, isn’t even a box, but just an image of a checked box that users cannot alter.

After the KYC page, one of the payment options users are presented with is G2A Pay, the real-money payment arm of game marketplace G2A. Other payment options for users include Skrill, Bitcoin, Alipay, Crit Cards, and Webmoney.

Additionally, the site uses PayPal, which is a partner of G2A. PayPal has recently sought legal assurances over whether or not it is lawful to process payments related to esports tournament betting, often referred to as head-to-head wagering, in which an esports player wagers on the outcome of their own performance.

It’s unclear if the notoriously risk-averse payment processor, already thinking twice about helping facilitate a form of wagering generally agreed to be skill-based and most likely legal, has also thought twice about processing payments related to unregulated casino-style gambling.

Skins in the game

In addition to filling accounts in these ways, users can also wager skins on the outcome of the site’s casino-style games. One deposit option for a European user, for example, is to simply deposit skins from one’s G2A skins account.

Even though skins deposited this way are not coming from a user’s Steam account, the transfer of skins between one’s G2A skins account and Fast still requires the use of the Steam mechanism, namely in the form of trade bots.

Regardless of whether skins or cash are deposited, any form of currency is then converted into a proportionate amount of coins users can then use to wager on Fast. If users win, the balance of their winnings is instantaneously sent to them, at which point they are forced to either do nothing or buy skins from Fast’s own skin marketplace.

Any purchased skins are then deposited back into a user’s skin account.

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Because skins still derive real-world monetary value via third-party marketplaces like OPSkins and G2A, users’ winnings on Fast in the form of skins are convertible to $USD.

Despite the cash-out process requiring a series of steps, Fast is nonetheless operating an entirely unregulated esports gambling site that accepts both real-money and skins.

In addition to raising questions of legality, the site’s commerce appears to still fly directly in the face of Valve’s order to discontinue using Steam.

Other gambling sites use workarounds

Fast is not alone in its tactics.

Other websites named in Valve’s C&D, CSGOStrong and CSGOCosmos, also pivoted their business models in early August to no longer accept skin deposits on their domains.

The two sites instead effectively outsourced the conversion of skins to coins to a third-party cash-out site named Skntrades.

Instead of gamblers acquiring coins for skins directly on Strong or Cosmos, gamblers would be prompted to do so on Skntrades, and then fund their balance on Strong or Cosmos directly with those coins via a Skintrades-based deposit mechanism.

This relationship ostensibly added another (thin) layer of protection between the sites and the skins-to-currency conversion process.

But by mid-August, the websites for Strong, Cosmos and Skntrades were all offline in the US, again making them appear generally shut down. They continue to operate elsewhere in the world, however.

Ban the bots

For Fast, Strong, Cosmos or any other sites looking for a loophole to potentially shield them from further action by Valve, the “trading” of skins for coins—regardless of the stage of the gambling-related chronology at which it occurs—is facilitated by trade bots.

These are automated mechanisms on Steam that gambling sites have created to facilitate high volumes of skin transfers between casino operators and bettors, similar to a bettor cashing and in and out at a brick-and-mortar casino.

Another more indirect way in which Fast still uses Steam is in evaluating skin prices. Users depositing skins are notified that they’ll receive 100 coins for every $1 worth of skins they deposit. But how do users know what the USD value of their skins are? They’re encouraged to use Steam Inventory Helper to evaluate how much their skins are worth.

One tactic Valve apparently took with several sites that flouted the C&Ds’ 10-day windows was disrupting, suspending or blocking trade bots for skin betting sportsbooks such as CSGOLounge and Fanobet.

Similar to regulatory or law enforcement bodies going after payment processors facilitating payments to offshore sportsbooks, Valve’s actions effectively crippled skin betting sportsbooks by rendering them unable to transfer currency from bettors to the house, and vice versa.

Following the move by Valve, Fanobet abandoned skin wagering and converted that platform to Bitcoin-based wagers. CSGOLounge, meanwhile, shut down all skin betting on Aug. 16. Its Steam-facilitated skin trading platform, however, remains active.

It is unclear why Valve hasn’t taken similarly prohibitive bot-suspending action against Fast. But in the absence of any direct pressure, Fast’s product appears to conflict directly with Valve’s demands in the C&Ds, and appears nearly identical to what it was before the game maker cracked down on skin gambling sites worldwide.

Another esportsbook

Fast’s revenue stream appears to be buoyed not just by casino gaming, but by the very sportsbook-style form of esports betting Valve just eliminated at Lounge and Fanobet.

In May, Fast quietly began offering skin wagers on the outcomes professional CS:GO matches. The product was processed by Fast but offered outside of its own domain, instead partnering with esports website HLTV to offer the bets.

While Fanobet’s utilization of Bitcoin involves a skin-less cash-in and cash-out process, Fast’s Skin Wallet deposit option still essentially facilitates sportsbook-style skin betting using Steam. An ESBR analysis found that roughly half of the 42 skin gambling sites Valve ordered to cease and desist have actually done so.

Unlike other esports gambling sites, which often evade scrutiny simply by being one of dozens and operating relatively under the radar, Fast’s CS:GO betting offerings are well-publicized.

ESBR has learned Fast spends upwards of $50,000 a month advertising its sportsbook-style betting platform (which is still apparently in Beta) on HLTV.

US bettors viewing a game page of a professional CS:GO match on HLTV will find stats, scores, lineup information and links to other cash betting options on other sites such as EGB and Betway.

But users outside the US are given the additional option of betting their Fast coin balance on the outcome of said match directly on HLTV, complete with access to live sportsbook-style lines.

Appetite for betting greater than appetite to stop betting

Regardless of the legality or regulatory nature of its use of real-money betting, the re-emergence of skin wagering options among Fast’s casino-style and esportsbook products illustrates four key points.

Audience wants to bet on esports

First, it suggests esports players, the primary demographic composing skin gamblers, have a strong appetite for betting both fueled by, and driving, CS:GO engagement.

This in turn speaks to a broader appetite for gambling among millennials in general, providing that the convenience and functionality of the gambling product are maintained, which in Fast’s case, is the case.

Regulatory uncertainty isn’t dissuading betting operators

Second, it suggests there is no shortage of willing entrepreneurs who will go to significant lengths to offer esports gambling products, regardless of the regulatory climate surrounding those products.

The cat-and-mouse game of halting skin betting in which Valve is now involved features creative, aggressive businesses that have signaled both a willingness for risk and a penchant for creativity in developing gambling-related products that either directly flout, or narrowly tip-toe around, existing regulatory challenges in the space.

Impact of the US market

Third, it suggests the action of exiting the US market has a strange, outsized significance compared to sites shutting down operations worldwide. Fast, Cosmos and Strong are just three sites that have almost no US footprint, but are apparently allowed to operate nearly everywhere else.

Valve’s order to stop using Steam to facilitate commercial gambling activities, however, did not specify a certain jurisdiction, instead applying worldwide. Perhaps the optics of this are driven by Valve’s establishment as an American company, and the US’s notoriously strict stance against gambling compared to other parts of the world.

But it doesn’t change the fact that the partial compliance of sites facilitating skin gambling in some areas and not in others is still violative of Valve’s C&D orders.

Cat vs. mouse, mouse vs. cat

Fourth, it suggests Valve’s appetite for chasing down and stopping skin gambling outfits might currently be outweighed by gambling sites’ appetite to offer their product. It is worth noting that this could change at any moment, and that Valve still firmly maintains the upper hand over gambling sites.

If the game maker wanted to, it could at the very least block Fast’s trading mechanism on Steam, effectively disabling its skin marketplace and the transfer of skins to bettors. Perhaps it has already done this to a certain extent.

But it certainly has not done it to the extent it did with sites such as Fanobet or CSGOLounge, the severity of which permanently compromised both sites’ skin betting operations.

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