Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
eSports is undergoing a period of massive growth. What was once something of a niche sector, is finding its way in the mainstream. Millions are tuning in to watch games, big names are sponsoring, and many online gambling platforms are allowing customers to place bets. This industry is only going to get bigger and it´s time to get involved.
For those that want to set up an eSports betting platform, there are several things you need to consider before you leap.
What are eSports and eSports betting?
eSports are multiplayer video games that are played online and competitively. Players are either professional or semi-professional and they compete to win big financial prizes.
eSports fans follow each game, tournament, or league, and more and more are placing bets on who they think will win. Wagers can also be put on in-game events meaning there are lots of opportunities within the eSports category. Bets can be placed in fiat-currency or cryptocurrency. Some bets are placed in the form of skins, which are virtual items that can be used within the game.
The most popular eSports games are League of Legends, Counter-Strike, StarCraft, Call of Duty, and Dota 2. Of course, there are a growing number of other video games that are becoming popular, as demand for tournaments increases.
Some 2.7 billion people play video games. While most play for fun, a growing number are playing competitively. The scope for betting on the outcome of these games is huge and some even suggest that one day, as the younger generations mature, it could outpace sports betting.
Consult with a professional
eSports isn’t new, but it’s still not as widely known as sports betting. If you want to move into the eSports betting sector, you need to seek the advice of someone who knows the market. You need to be sure you have chosen the right jurisdiction, the right license type, and have considered company incorporation, banking, and payment providers.
If you don’t give these matters proper consideration or work with someone who isn’t familiar with them in an eSports context, things could go wrong.
Ideally, you need to engage a corporate services provider with a demonstrated track record in the online gambling world and with a thorough understanding of eSports and sports betting. They must also be operational in various jurisdictions, so you have the flexibility to pick the best one for your licensing.
As well as helping you to acquire the license, the provider must be ready to help you develop your business, link you with industry contacts, and do the behind the scenes corporate maintenance. Picking someone who has helped others like you to succeed is a no-brainer and an integral part of your eSports journey.
Pick a jurisdiction
Every eSports gambling operator must be registered and compliant with at least one jurisdiction. The most popular jurisdiction for eSports start-ups is Curacao, followed by the Kahnawake Nation and Malta. Of course, each jurisdiction has different requirements, standards, and costs, so you need to evaluate these carefully before you start applying.
Once you have picked a jurisdiction, you should then decide on the type of license you need. Most of the popular jurisdictions have just one or two license types, but some offer more.
Incorporate a company
Once you have decided on a jurisdiction and license type, you then need to incorporate a company. This is a requirement for licensing applications in most jurisdictions. You can either incorporate from scratch or purchase a ready-made shelf company, depending on your timeline.
If you want to take bets and deposits, payout, and generate revenue, you need a corporate settlement account and a contract with at least one payment provider. Opening accounts can be difficult, especially in a foreign jurisdiction so you should entrust it to your service provider. While you can approach and negotiate with payment providers, if you are a startup, you are unlikely to get a good rate. If you go through your provider, they will be able to leverage their existing business relationship to secure better rates for you.
Get your software
What software platform will you use? Will you just offer eSports betting or other betting products as well? Do you want to provide chat rooms, bonuses, in-play betting, and statistics? How are you going to protect the security of the platform and its users? These are just some of the software considerations you will have. Again, by choosing an experienced service provider, they can give you advice and guidance on which are the best platforms for the task.
This is not an exhaustive list of things you need to consider before you launch your eSports betting platform. There are countless things you need to decide on before you ‘go live’. Business plans, marketing, affiliate agreements and finance are just a few examples!
Starting a new business venture can be stressful enough but going into a new sector without any experience is even more so. That’s why you must partner with a corporate service provider that has done it all before. Draw on their experience and knowledge and let them lead you towards success!