A skill level initiated interleaved wagering system is disclosed, including: an interactive controller configured to: communicate an application telemetry communication comprising application telemetry; scan an application resource instruction; and scan a wager outcome communication; a wager controller constructed to: scan a wager instruction; generate the wager outcome; communicate, to the application controller, the wager outcome communication comprising the wager outcome; and the application controller operatively connecting the interactive controller and the wager controller and constructed to: determine an application level change, wherein the application level is associated with a user; generate the wager instruction comprising one or more wager parameters used in determining wager outcomes; communicate, to the wager controller, the wager instruction; scan the wager outcome communication from the wager controller; generate the application resource instruction comprising application resources; communicate the application resource instruction; generate the wager outcome communication; and communicate the wager outcome communication.