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What is skin gambling?

Millions of pounds are spent each year on ‘skin gambling’ – a growing trend of cryptocurrency betting that found its origins in video gaming. As part of Parent Zone’s #LetsTalkAboutGambling campaign, staff writer Yusuf Tamanna explains the roots of the craze and how over one in 10 11-16 year-olds have used it to gamble.

The history of skins

In 2000, the first-person shooter game Counter-Strike - where players fought terrorists in warzones across the world - was released and grew in popularity because, unlike other war titles made for PC, it boasted striking realism in its designs.

As its fan base expanded, Valve, the game’s publishers, began introducing different weapons and intricate plots and, in 2003 Valve launched Steam, a multi-player platform designed to distribute PC games online. It offered players with installations to new games, as well as community features including friends lists and in-game chat. Though initially designed for use on Microsoft Windows, Steam is now available on OS X and Linux operating systems, as well as app versions for iOS and Android.

In a bid to breathe new life into the game, Valve released an update called Counter-Stroke: Global Offensive (CS:GO) in 2012. The game remained fundamentally the same, the major difference being players could now get decorative covers for their weapons known as ‘skins’.

A ‘skin’ is a costume or design players can apply to their character or equipment to make it look more aesthetically pleasing. A skin doesn’t impact on gameplay or the end result of the game.

Players cannot create skins, but instead select them from an existing library on the Steam Market, a platform available on Steam. It operates similar to an App Store offering skins for a variety of games, including Dota 2 and Team Fortress 2. The value of each skin is based on its popularity. Skins collected by players over time are stored online in their Steam library.

As skins became more in demand, their rise as a cryptocurrency began. Any money deposited to a player’s Steam account can be converted into credits, to trade for skins or other weapons. Leftover credits cannot be converted back into money.

As the quality and look of skins improved over time, demand increased among players. Third party websites, neither affiliated nor endorsed by the CS:GO, appeared online and allowed players to purchase intricately designed skins outside of Steam and use online payment tools like PayPal and Bitcoin to purchase them.

How do you bet with skins?

Valve operates Steam on an application programming interface (API), meaning outside developers have access to the programming code of Steam - allowing players to log in to their Steam accounts from these third party websites. This meant unaffiliated third party sites can use skins as a cryptocurrency for activities, the most popular being gambling.

Figures from the Gambling Commission’s 'Young people and gambling 2017' report.

Battles and casinos

The online nature of games such as CS:GO and Dota 2 allow battles between players to be streamed online. Anyone can watch these streams either on YouTube or alternative streaming sites, such as Twitch. Third party sites, such as Dota2wage.com, were quickly developed and began promoting upcoming battles and allowed players to use the skins in their Steam library to bet on the outcome.

Players can bet with however many skins they want, and while the game is live, the skins players are staking are taken out of their Steam library and locked. If the player wins the bet, they get back all the skins including the skins that their opponent gambled and lost, which are placed back in their Steam library.

However, players grew frustrated when their Steam credits started to grow from winning rare skins, as they were unable to cash them out for real money. This led new and unaffiliated sites being developed, such as skins.cash, which allowed players to withdraw their credit balance and have it paid back onto their credit/debit card or via PayPal. 

Players can use their skins to bet on the outcome of battles.

This real-world cash value led to skins being used as currency to bet on casino-style games of chance, similar to coin flips and roulette. Sites unaffiliated to Valve, such as CS:GO Fast, CS:GO Bux and CS:GO Wild run roulette spins as frequently as every 30 seconds. Players deposit their skins, which are then converted into coins or jewels of different value. These can then be used just like chips at a casino to place bets on games of chance. With no age verification process in place on these sites it leaves the door open for children to visit with virtually nothing stopping them.

Sites such as WTFSkins enable players to gamble based on roulette and coin flip games.

If a player wins, they are awarded more jewels and if they lose then their balance goes down. The chips can be used to either purchase skins or place more bets.

CS:GO Fast, along with other third party sites, encourage players to refer their friends for free coins.

Players can also gamble using virtual coins, which can be redeemed for cash. Coins can be purchased either by exchanging skins for their value in coins, determined by the Steam market, buying via a credit/debit card or by referring friends to play the game. If a new player creates an account and gives the username of the player that referred them, that player will be given an undisclosed amount of coins. The idea is to encourage as many people as possible to play the game in order to get more coins without paying for them.

How have Valve responded?

The publisher of CS:GO and Steam distanced itself from unaffiliated online skin betting websites, stating it does not facilitate gambling, nor does it support players that encourage such habits.

The publisher sent cease and desist orders to 23 skin gambling websites in 2016, ordering them to stop using Steam to log in to these websites and facilitate gambling. After the order expired 10 days later, only 11 websites had shut their services, with some temporarily removing the gambling element and others ignoring the order altogether.

Popular culture

The popularity and growth of skins gambling has been enhanced by promotion on video sharing websites, such as YouTube, with some videos amassing over two million views. Vloggers record themselves gambling with skins, often filming big wins.

Two popular vloggers, known as Syndicate and TmarTn, uploaded videos of themselves betting with skins on CS:GO Lotto, another third party skin gambling site, but they didn’t inform players that they owned the site as well.

Their videos showed them gambling with weapon skins and winning large amounts of money. The videos were viewed millions of times and would have sensationalist titles like ‘HOW TO WIN $13,000 IN 5 MINUTES’ to get viewers’ attention.

For parents

If you are concerned that your child might be taking part in skin gambling or you’re worried about their gaming habits, we have additional articles and resources that you can read.

What are loot boxes? 

Is my child addicted to online gaming? 

Read the Gambling Commission's 'Young people and gambling 2017' report

How to talk to your child about gambling

Online gambling glossary