Specialist esports betting and fantasy league operator eSportsPools has been licensed by the Isle of Man government to allow customers to gamble using virtual goods.
eSportsPools will look to legitimise the sector – commonly known as skin betting – by working under a licence from the Isle of Man Gambling Supervision Commission.
The new licence is the first to be awarded since the jurisdiction's regulations were amended to cover the regulation of virtual goods. This requires applicants to set out a business plan in which they detail all in-game goods that they plan to use for betting.
The global skin betting market was estimated to be worth between USD$3.9bn and $5.1bn in 2016. However it has since become a target for gambling regulators and platform providers, who see it as a way of allowing minors to bet illegally or facilitate esports wagering outside the law.
"To date, eSports betting and the gambling of virtual goods has largely been a grey market, with a lot of unregulated operators failing to protect their customers," eSportsPools chief executive Scott Burton said.
"We've always taken a more transparent approach, undertaking 'know your customer' checks to verify age and running a really clear game system," he explained. "With this licence, that work has been validated and I feel like we have taken the first step towards building a regulated market place that is safe for consumers, businesses, and investors."
The operator believes the Isle of Man licence will consolidate its position as a leading esports betting brand. It claims to have established itself as the market-leader for esports fantasy leagues before making its move into real-money gaming.
The licensed real-money and virtual goods betting products will be offered via the operator's ESP.bet site, with its secondary esportspools.com portal remaining a free-to-play site.
eSportsPools' new licence also permits the operator to process digital currency transactions, allowing customers to make deposits and withdrawals in cryptocurrencies such as Bitcoin. All such transactions will be handled via the BitPay exchange, which is being fully integrated into the eSportsPools platform.