I already have something like that in my city. Every thursday gamers gather in the internet cafe and make their own small tournament depositing some money to make a prize for the winner. People can't bet on them but I'm sure that such betting won't be popular. Also accepting only cryptos is a bad move. It is good if people wil desire to bet in  cryptos but there is no need to force them.

- Why are people going to bet on people who they don't know?

And they won't simply because they wont trust that the match is fair, especially on the local level. Thats gona kill all the fun.