Oh, that's going to make money. I'm not a fan of most esports games myself, but with the streaming audience being as big as it is and the barrier between impulse/payout being as low as it is (just look at all the money streamers pull in in micro-donations), yeah, that's going to make a whole lot of money.
That said, these startups may get squeezed out fairly quickly as Amazon/Twitch and Google/Youtube integrate a "bet now!" button into their streams. On the other hand, I could see the streaming giants get undercut by content owners as game publishers could create and restrict betting to their own streaming platforms.
For me, this is probably all bad news. It likely means fewer non esports-centric AAA releases from the big players. Even Nintendo will want in on that action, and they aren't above trying to restrict game streaming to their own monetezation platforms as we saw with their Youtube approved creators platform.
For esports fans though, this will be a boon. Contrary to what the article says, I think it will lead to more careful game-ballancing to keep from discouraging betters, which means no-more pay-to-win DLC. Competative events will absolutely be more plentiful for fans, and it will probably also mean that even more esports titles will launch free to play, as more people playing means more people watching means more people betting means more money.
How they'll stop kids under 18 from participating in the gambling side of things, I don't know, but with potential returns that big you can bet they'll find a way to cover their asses.