One of the hottest esports startups of 2015 is shutting down the core of its business.

Vulcun will no longer offer paid fantasy contests, the company announced today. The move comes in response to increasing regulation on daily fantasy sports in many States around the country. Thats a big change for a company that was proud to offer contests worth a total of six figures, then seven figures, then eightthanks to meteoric growth. But in some ways, things wont change much at all.

The company will continue offering contests based around its own currency, Gold, which users can buy with real money and then bet and spend on purchasing in-game items for Counter-Strike: Global Offensive and Dota 2.

Weve seen user engagement shift dramatically over the course of last year, from paid fantasy to all the new features, Vulcun explained. For example, last month, less than 10% of our users participated in paid fantasy while 90% participated in everything else.

That seems hard to believe considering just how popular the company’s daily fantasy esports solution really was, with more than $10 million in winnings doled out over the course of 2015. But its a change Vulcun feels necessary, if one it’s not completely comfortable doing.

Thats likely due to the increase regulation of daily fantasy products throughout the nation stemming from the fantasy sports scandal reported in October, where insiders at industry giants DraftKings and FanDuel, who both recently entered the fantasy esports industry, used insider information to win money. Thats led to increasing regulation around the country, with many States banning daily fantasy sports.

Were esports fanatics first, and fantasy to us was a way of making esports more engaging and fun, the announcement said. However the current legal landscape in the United States has made this difficult.

Instead of complying to new regulations on a state by state basis, a difficult process thats often frustrating for users, the company will focus on a different way of doing things. Vulcun will focus on in-game items rather than actual cash. That should allow them to offer a similar product, but with a layer that lets them avoid regulationat least for now.

Image via Vulcun

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