As of Tuesday afternoon, wagering listings for several professional esports matches were still up on the website, but the decision remains a definitive blow to the skin gambling industry in the wake of game maker Valve’s recent crackdown.
It is unclear if either site’s popular skin trading function will also shut down.
Some users appeared to be experiencing difficulty with site withdrawals on Tuesday afternoon, with one commenter on Facebook calling the situation “a real robbery.”
Lounge’s operating company did not elaborate as to when – or if – users will be able to withdraw from the sites, only saying that Lounge would “continue as an e-Sports entertainment and information platform with new features to be released very soon.”
Full text of Facebook announcement
Today we are announcing that we are closing our virtual items betting functionality with immediate effect. Depositing virtual skins and items in order to place a bet is not possible anymore.
At the moment we are working on a solution for items withdrawal, please stay tuned for an update on this topic.
Lounge will continue as an e-Sports entertainment and information platform with new features to be released very soon.
On behalf of Borewik, founder of Dota2Lounge & CSGOLounge
and the entire Lounges Team.
A chaotic August
Tuesday’s announcement came as a surprise, and appeared to contradict an announcement just two weeks prior in which the site said it would only discontinue skin betting for users in 16 countries and five territories around the world.
The site said on Aug. 1 it would apply for a gambling license in those countries so that it could continue to offer its product, even though in many countries, including the US, there is no licensing or regulatory framework for skins, which are virtual items wholly controlled by game maker Valve Corporation.
A series of other detailed reforms the site instituted earlier this month, including geolocation protocols, instituting a self-exclusion responsible gaming policy, mandatory email and password log-ins for bettors (as opposed to users Steam log-ins), now appear moot.
CSGOLounge was the world’s largest skin gambling website, taking in the equivalent of $38 million in handle in the month of July alone, an equivalent of roughly 40,000 skins per match.
Both figures plummeted in early August, however. After Aug. 7, users in banned countries became unable to even view betting data on the Lounges.
Not entirely ceasing, or desisting
Both Lounges were among the 42 skin gambling sites named over a series of two cease and desist letters from Valve. The letters demanded that the named sites stop using its open-source API, Steam, to facilitate commercial gambling activities.
Lounge allowed CS:GO players to log in to the site using their Steam account, access their skins library, and wager those skins on the outcome of professional esports matches.
Lounge appeared quietly defiant at first, not making any changes to its platform over the 10-day period from July 19-29.
On July 30, the site hosted betting on the championship match of Turner and WME IMG’s ELEAGUE between Virtus.Pro and Fnatic, and attracted 112,000 skins in handle.
Last week, however, Valve appeared to take the Lounges’ non-compliance into its own hands. It allegedly disrupted the sites’ trade bots, which serve as the mechanism by which bettors transfer balances and receive owed winnings.
Another skin betting sportsbook, Fanobet, which also did not immediately comply within Valve’s 10-day window to do so, reported the same issue.
New ownership information comes to light
Tuesday’s announcement also comes one day after EsportsObserver published a report linking the ownership group of Virtus.Pro to CSGOLounge.
The report claims that ESForce Holding, Virtus’ parent company and a company indirectly controlled by Russian oligarch Alisher Usmanov, owns 90 percent of CSGOLounge.
Other skin gambling sites have come under scrutiny recently for ownership links to professional esports organizations.
Erstwhile skin gambling site CSGOWild was reportedly linked to professional esports organization FaZeClan.
Earlier this year, Valve instituted a policy for its events mandating that professional players “should under no circumstances gamble on CS:GO matches, associate with high volume CS:GO gamblers, or deliver information to others that might influence their CS:GO bets.”