Esports regulators need their head in the game

Whilst the 2020 pandemic may have brought esports out of the shadows and into our living rooms – lack of regulation in the esports betting space will hold back the industry, according to experts.

Asia is home to the largest audience of esports players and fans in the world. More than $519 million in esports revenue was recorded in 2019, and Asia is also home to 510 million esports fans, according to Niko Partners. However, esports specific regulation has not caught up with the trend, and esports betting regulation is even further behind, with only a handful of jurisdictions globally having created licensing and laws to regulate the activity.

The United States and Europe are seen as the most advanced in this space, whilst Asia is lagging far behind with many jurisdictions still operating on decades-old rules that limit any and all forms of gambling.

A lot of this is down to the gambling regulators, who have become known for being slow to adapt to innovation, the highly politicized nature of gambling, and a general lack of knowledge about what esports is, all of which ensures that any advancement in the space must be fought tooth and nail.

In India, the All India Gaming Federation (AIGF) noted that establishing a clear regulatory framework for India’s esports market would likely drive significant investment from venture capital funds, potentially eight to ten times the current levels.

 

“Digital sports need to be recognized and need to have a proper construction of rules and regulations,” AIGF CEO Roland Landers wrote in a report. “This won’t just assist to scale the game, but help make it a viable career option for individuals.”

 

The country hasn’t begun even thinking about legalizing betting on esports, though proponents are pushing for the legalization of traditional sports betting. The country also has a healthy skill-based and fantasy sports market.

brett abarbanel esports regulator

Brett Abarbanel, Ph.D. Director of Research International Gaming Institute on October 27, 2016. (Josh Hawkins/UNLV Photo Services)

Brett Abarbanel, Director of Research at the University of Nevada, said earlier this year that, “the biggest challenge for anybody getting involved in regulating esports is that the industry is constantly changing and evolving.

Roger Quiles Esports regulartorThose in the know understand that things change quickly in the world of esports, meaning that esports regulators who only possess knowledge relating to wagering on traditional sports will be operating in a constant knowledge deficit”, said Roger Quiles, an esports-dedicated attorney based in the U.S.

“Back in 2015, the esports industry turnover was around three months. So that means every three months, there would be a seismic shift in the esports space that would fundamentally alter how people in the industry would structure their businesses and contracts,” he said, during a conference in January.

“I think there is a huge amount of understanding that isn’t present in esports. Because there hasn’t been that kind of exposure to esports as a general trading product.

The current most popular titles around the world include Dota 2, Counterstrike: Global Offensive, Fortnite, League of Legends, StarCraft II, Player Unknown Battlegrounds (PUBG), Overwatch and Hearthstone, though the list differs in China, for example, which favors unique titles such as Honor of Kings,  Arena of Valor, and Crossfire, along with the mainstream titles.

Chris Kissack esports regulatorsOne regulator, however, has been particularly nimble in establishing regulations for esports betting, including the setting up of regulations relating to skin betting, and cryptocurrency several years ago. “Very early on we ran workshops and got groups together whether that be data centers or CSPs, law firms, to bring them around a table and discuss pain points and what’s to come,” explains Chris Kissack, Head of Esports at Digital Isle of Man.

Ultimately, esports regulators need to try and immerse themselves as much as possible.

 

“The esports industry is so fast-moving, and trying to put a pin in something like that can be quite daunting. Ultimately, don’t be afraid to play some games. Whether you’re a consultant or regulator or betting operator trying to bring on new products.”

“Play the games. You don’t need to become a master at anything. As with anything, you need to dive in. Don’t be afraid to catch geek,” said Kissack.

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Asia Gaming Brief is a market intelligence, events, and networking company focused on Asia Pacific’s rapidly expanding gaming industry. Our vast network of contacts across Asia’s land-based and online gaming industries means we have our finger on the pulse of all things gaming, from the latest trends and hottest products through to changes in regulation and emerging jurisdictions. AGB’s daily eBrief and AGB Nippon (in Japanese) provide readers with in-depth articles and breaking news updates, while our bi-monthly print publication Asia Gaming Briefings provides essential information and updates across 22 jurisdictions.

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