You mean play against each other "for or with" btc (instead of by btc?)
As of my understanding on OP, he is going to create a game where the BTC will come from both parties. Literally, gambling 1vs1. And not the platform having the pool of BTC to win.
It's betting (or what we erroneously call gambling), If you mean a game people compete with each other for prices/rewards/profits, especially for rewards staked by the parties involved.
You will probably need a license if it's for profit purposes. I guess there are countries you won't be bothered with license if it's a small business
Even if the country doesn't really requires a specific license to run the business, it is better for you to play safe and get the license first before you operate it. Or to be sure, you might hire a lawyer who knows how to run this kind of business. Most of the time, processing of the license usually takes 3-6 months.
In our country Philippines, Online gambling license supports the following according to this
article:
Casino, eSports, Poker, Sports Betting, Lotto, Bingo, Horseracing, Bitcoin Casino, Fantasy Sports, Games of Skills.
With bitcoin casino included, I'm pretty sure you might really need a license.