$700 million e-sport sector at the centre of regulation moves

The popularity of competitive video gaming or “e-sport” has grown to such an extent in the past few years that policymakers have been caught unawares.

From communities of mainly teenage boys meeting at multiplayer game conventions, the sector now commands an estimated $700 million in total forecast revenues for 2017 along with an international live audience of 260 million. These figures are expected to more than double between now and 2020 – to $1.5 billion and 590 million, respectively.

Media, tech and sport companies have taken notice. In 2014 Amazon purchased the popular live streaming video service Twitch for $970 million, while Youtube has rolled out its own video streaming service called Youtube Gaming.

Some of the biggest professional football clubs including Manchester City and Paris Saint Germain have signed up squads of players to compete in e-sport tournaments, while Tottenham Hotspur’s new stadium will have a live e-sport viewing capacity of 50,000.

The International Olympic Committee (IOC) is reported to be considering adding e-sport to the 2024 Olympic games in Paris.

However, the transition from recreational video games played by teenagers to a fully functioning commercial and betting market has come with it a range of associated problems.

The sector now commands an estimated $700 million in total forecast revenues for 2017

Match-fixing and drug-taking are now part of the e-sport scene. In 2014, professional players of the game Counter-Strike: Global Offensive admitted that individuals had been throwing matches after placing bets at a third-party betting website, leading to the game developer Valve eventually suspending and confirming life bans to 19 players. The widespread use of performance-enhancing drugs (PEDs) such as Adderall is also well documented.

A hearing in September organised by the European Parliament’s Intergroup on Sport served to train a spotlight on e-sport and consider whether such issues warranted EU regulation for the sector.


Self regulation

Speaking at the hearing, Ian Smith, the first integrity commissioner at the e-Sports Integrity Coalition (ESIC), pleaded for the opportunity for e-sport to self-regulate in line with the wider EU sports sector. Smith said that it would be a ‘disaster’ if regulation came from non-embedded actors.

Unlike other sports, however, e-sport does not currently have a governing body to provide it with a legal framework. ESIC has standardised codes of conduct, ethics, anti-corruption, and anti-doping, but suffers from a lack of industry-wide representation.

Match-fixing and drug-taking are now part of the e-sport scene

This muddies the waters when trying to regulate the industry, raising the question; are regulations there to protect publishers or players? What of the legal status of players, are they paid sportsmen, or self-employed? Finding common ground among such a diverse group of stakeholders who are often strong competitors will be increasingly difficult as time goes on.

There is enormous fragmentation across the EU when it comes to regulating e-sport at national level. France currently does not recognise e-sport as a sport but has created specific regulations, such as e-sport player contracts.

In Germany, the fact that e-sport does not have a governing body means it is not legally defined as a sport and therefore the German Criminal Code as it applies to betting fraud in sport does not apply to e-sport.

Given the rapid growth in size and the revenue streams of e-sport in the future it is to be expected that authorities, at national or EU level, will face growing pressure to regulate.

In a sector which is inherently digital and fast-moving, any future rules must be equally innovative to keep up. It remains to be seen whether e-sport can maintain the case for self-regulation as it continues to develop.