How to Make Money Playing Videogames

It’s not just professional gamers who can make money playing “Halo.” Now, if you have the chops, you might be able to fatten your wallet as well.

Videogame tournaments, with substantial cash prizes, have been around for years, but tend to be dominated by the best of the best — people who train for hours each day, along the same lines as a professional athlete. Players like Jonathan “Fatal1ty” Wendel can make six figures per year playing games. Normal folks, though, have been left off of the gravy train.

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That’s changing these days, thanks to a handful of companies that allow individual players to challenge friends and strangers with similar skill levels for cash.

Players can bet money on one-on-one matches or multiplayer tournaments for amounts ranging from $1 to thousands of dollars. It’s legal, say the operators, and it’s growing.

At both WorldGaming.com and BringIt.com, two of the larger challenge sites, the average bet hovers in the $10 range. Players — sometimes friends and sometimes strangers, put together via the site’s matching service — register for free, then head to a lobby to find an opponent, agree on the wager amount (technically called an “entry fee” by both sites) and the game. Then, both fire up their consoles to play.

Money is deposited into accounts on either site via PayPal or credit card. Once a challenge is accepted, their wager amount (plus a 10 percent commission) is withdrawn and put into a separate escrow account until a winner is determined, often by a monitoring system that varies slightly from company to company.

Winners who decide to cash out can have checks mailed to them or have the money transferred to a PayPal account.

Both WorldGaming and BringIt support competitions over Microsoft’s Xbox 360 , Sony's PlayStation 3 (or PlayStation 2) and the Nintendo Wii . Most popular titles with multiplayer components are supported, including Microsoft's “Halo 3,” Activision’s “Call of Duty 4” and Electronic Arts’ “Madden NFL Football”.

“What we offer is the opportunity, every day, to monetize your skills from your home,” says Billy Levin, president of WorldGaming.

WorldGaming, says Levin, has over 10,000 registered users and has had over 20,000 cash challenges since its April launch. Over $140,000 has changes hands between users.

The maximum wager to date happened last week, when a pair of high rollers bet $500 per game and played six rounds against each other. (One of the parties walked away $1,000 richer, says Levin.)

BringIt is a bit younger, having launched its beta site in November. But CEO and founder Woody Levin says the site is seeing its membership grow by up to 2 percent per day. The company automatically monitors results of some games, but it relies on players to report and verify results on others.

This, conceivably, could lead to disputes, especially in a heated match, but Levin says only 2.6 percent of the wagered games have disputed results. (Disputes that can't be resolved are considered draws, with both parties getting their money back, minus the service fee.)

Both WorldGaming and BringIt deflect comparisons to gambling sites, saying videogames are based on skill rather than chance, and therefore are not legally considered gambling. (Because cash is involved, though, all players must be over 18.)

“We’re really no different than a WorldWinner or Pogo or AOL games,” says Levin. “The purpose of BringIt was to take things to the next level … We don’t want people coming and dumping their paycheck into this. That’s not the purpose of this site.”

That said, there are nine U.S. states that do not allow cash bets on videogames.

Both sites were born from old college habits. The founders noticed big interest among their peers in gaming for money and decided to make a business out of it, relying on the inherent competitive nature of hardcore gamers.

Neither, though, thinks they are reinventing the wheel.

“We know we didn’t invent the concept of playing videogames for money,” says WorldGaming’s Levin. “In fact, we’re pretty sure it was invented around the time of the first Pong machine.”

© 2009 CNBC.com