The legal battles facing eSports
eSports involves gamers playing competitively against another individual or team, online.
They are not limited to a select few games or sports, but rather revolve around the games with the biggest following or player base.
Thanks to a potent combination of celebrity endorsements, the rise of streaming platforms such as YouTube, Twitch and Facebook, and the popularity of video games as a whole (some games regularly attract up to 850,000 players per month), eSports has generated significant mainstream popularity over recent years.
Like any sport that attracts public attention and involves large sums of money, there are various legal issues which brands, influencers and eSports players alike must take into consideration. Drafting contracts, negotiating television and online streaming rights, branding and merchandising deals and intellectual property (IP) usage all require legal input.
Arguably the largest legal challenge facing eSports, however, is a lack of specific regulation.
While specific rules and regulations are implemented by individual event organisers or national bodies, the lack of an overarching governing body to provide guidance and consistency could hinder the development and growth of eSports.
Currently, the industry is regulated by a plethora of federations, national organisations, event organisers and even the game publishers themselves.
To obtain longevity and success, like all other sports, there must be some agreement around a number of self-regulatory and wider legal issues, including gambling, cheating and illicit drug taking.
Attempts have been made to produce some type of regulation and create a single governing body – notably through the eSports Integrity Coalition (established in 2015) and its Code of Conduct, Code of Ethics and Anti-Doping Code, as well as The World eSports Association – we have yet to see the rise of an industry-accepted body to guide eSport development.
Many argue there are far too many legal issues in eSports to keep track of, let alone tackle, and the lack of clear regulations and league governance has led to some of eSports’ most serious legal issues to date, often involving gambling.
The game Counter-Strike: Global Offensive (CS:GO), created by Valve Corporation, offers a notable example. In one of the most prevalent iterations of eSports gambling, the game introduced in-game cosmetic ‘skins’ which could be used to personalise players’ in-game items and clothing.
While skins could be obtained through gameplay, they could also be purchased with real money. A plethora of online markets were subsequently created in which players could buy, sell and trade skins with real money.
Seeing a business opportunity, websites quickly sprung up where players could gamble using their skins, betting on live in-game eSports matches. After attracting legal attention, a class action suit was filed against Valve in the United States, which claimed the company had helped to create an illegal online gambling market.
While the class action was dismissed in 2016, skin betting is in dire need of proper regulation, especially with the indigenous American Quinalt Nation tribe now filing for a lawsuit against Valve, likening the purchasing of skins in CS:GO to “an online slot machine”.
eSports gambling is especially concerning when the player demographic of games like CS:GO are taken into consideration. A recent study by Child Care UK found that “more than half of parents surveyed allowed their children to play video games for over 18’s… and 86% of parents didn’t follow age restrictions on videogames”.
Likewise, the US-based Entertainment Software Association have also released statistics which show children under the age of 18 make up 17% of the entire US gaming population.
These troubling statistics suggest children, using their own (or parents’) money, are at risk of developing debilitating gambling habits through gameplay where there are no major “restrictions on underage persons from accessing the website / games and placing bets”.
The epidemic of unrestricted access to such websites for under-age players must be addressed.
IP and the exploitation of intangible assets is another highly contentious issue for eSports. The rise in popularity and marketability of eSports has brought with it a desire to protect profitable IP. In the UK, the game is protected under copyright law.
Multiple aspects of the industry are protected by copyright: the underlying code is protected as a literary work, game artwork and imagery are protected as artistic works, and soundtrack and score are protected as musical works and sound recordings. It should also be noted that a game’s name and logo might also be capable of protection through registered and unregistered trademarks.
Most of the value that is created in eSports is as a result of the developers’ IP. However, game creators assume all control and own all IP rights. This in essence means that they can control where and when games are played, the players and broadcasters.
This level of control may negatively impact on the natural progression of the industry, potential fans and player bases, and the reach of eSports. Regulation, clear guidance and a singular voice would be beneficial to all other entities within the industry, especially when dealing with game creators and developers, over IP-related matters.
While developers may be able to take the entire industry under their control, it may not be the most commercially sensible move.
Regardless, due to the industry’s rapid growth and popularity in recent years, as things stand, IP related disputes, without the guiding light of a regulator or industry-leading body, will likely continue.
To secure the industry’s longevity, eSports needs robust, customised regulation and governance, particularly with the complexity and number of games rapidly growing.
The industry is crying out for a singular body to guide and regulate all entities, with collaboration especially necessary to avoid division and endangerment of the foundations of this ethereal new citadel of sport.