The same company that owns a majority stake in controversial skin betting site CSGO Lounge also owns legendary esports franchise SK Gaming, according to a new report in Esports Observer.
ESforce Holding, which is also the parent company of Russian esports organization Virtus Pro, became SK’s only shareholder on June 21. The company was formerly known as Virtus.pro Group, and has investments in multiple esports ventures. Indeed, the SK Gaming acquisition represents another major step in ESforce’s aggressive moves in European esports. The company, reportedly backed by $100 million in investment from Russian billionaire Alisher Usmanov, owns a European tournament organizer called Epic Esports Events and the media rights esports organization Na`Vi—and, of course, Virtus Pro, another major name in European esports.
The connection with CSGO Lounge, however, has caught the organization in a torrent of bad publicity. That website specialized in the legally murky business of skin gambling. It was one of several websites named in U.S.-based lawsuits that accused the site of facilitating illegal gambling for minors. Valve reacted swiftly, prohibiting CSGO Lounge and other skin gambling sites from using its API and effectively killing the fledgling industry. Just this week, CSGO Lounge announced it was pivoting from skin gambling to an “an esports entertainment and information platform.”
In a statement to the Daily Dot, SK Gaming managing director Alex Müller touched briefly on that controversy, but emphasized that SK Gaming was still largely independent.
“We understand the responsibility we have in terms of integrity towards the community,” Müller said. “As for SK Gaming and the decisions we make for the brand, nothing changes actually. This includes which teams we sign as well as which sponsors we partner up with to name the most important ones.”
SK Gaming is one of the longest-standing esports organizations, founded in 1997. It currently has a League of Legends, Vainglory, and World of Warcraft team, a stable of Hearthstone players, and recently signed the best Counter-Strike: Global Offensive team in the world (the former Luminosity roster).
This signing landed the organization in hot water, after contract disputes with the team became public knowledge. It also led to the former SK Gaming team, and the new lineup being kicked out of the inaugural season of TBS’ ELEAGUE for breaching the tournament rules. The organization’s links to World Esports Organization (WESA) league commissioner Pietro Fringuelli and ESL CEO Ralf Reichert were also called out by ESPN as a conflict of interest earlier this year as a result of the CS:GO contract issues.
“ESforce took over the shares of the former SK Gaming partners,” SK Gaming CEO Alex Müller told Esports Observer. “It was the best business decision to make for SK Gaming. We talked to a number of potential investors, but ESforce shared our ambitions and also provided a lot of esports knowledge.”
Müller did not say whether the sale of shares has to do with the WESA ties, but he did mention that the company decided to find a new investor to buy out Reichert’s shares in September last year.
Published: Aug 19, 2016 05:48 pm