January 25, 2017

Whilst still a relatively nascent market (the International e-Sports Federation based in Seoul was only founded in 2008), the legal and commercial challenges of eSports are no different to those which have previously faced the leisure industry. One of the key legal considerations is, and will continue to be, regulation. In August 2016, the British Gambling Commission took the proactive step of publishing a discussion paper on eSports.

Additionally, the eSports Integrity Coalition (ESIC) was founded in 2015 to tackle various integrity issues which the sector is facing, particularly in relation to match-fixing and fraud. ESIC has already produced various pieces of regulatory literature, including a Code of Conduct and an Anti-Doping Code.

There is no ‘one type’ of eSports and therefore each model, and the regulatory requirements it is subject to, must be assessed on a case-by case basis. Key factors to consider will include:

• whether the eSport is online, offline or a mixture of both;
• whether players compete within the privacy of their own home or at a public venue;
• the rules governing the specific eSport;
• will the eSport be governed by ESIC’s codes;
• are there any prohibited substances which should be added to ESIC’s list;
• are there any therapeutic-use-exemptions which should be included;
• whether anything is being wagered on the outcome of the eSport (including by players or viewers);
• whether players have to pay to participate;
• if a prize or consideration can be won – whether through a wager or by succeeding in the eSport; and
• where the prize is in the form of virtual currency or virtual items, whether such items have a real world value.

The last of the factors listed above is of particular importance where eSports take place online, given that the Gambling Commission’s paper on eSports also discussed virtual currency and virtual items, known as ‘skins’.

eSports is an exciting new sector that has a rapidly growing player and viewer base and shows no signs of slowing down. However, the additional exposure will bring with it added pressure to ensure that eSports do not constitute unlicensed gambling and that it is conducted fairly and with integrity. Now is the time for eSports businesses to consider these issues so as to avoid creating a product where success is subject to future (or current) regulation.