eSports: The Regulatory Landscape

By Charis Georgiades, APC Sports Consulting, Nicosia, Cyprus

The electronic gaming industry has grown dramatically in recent years as an alternative to other sports.

In many countries around the world, eSports is already recognized as an official sport which clearly illustrates its dynamic.

In 2020, in spite of the COVID Pandemic, the revenue of the eSports industry amounted to $947.1 million.

According to analysts, the global revenue of eSports will reach and exceed $1 billion in 2021.

eSports Regulations

Many debates have taken place in recent years about the need to regulate eSports. The Laws and Regulations about eSports have not yet reached the desired levels, given the rapid growth the industry is experiencing. It should be noted that despite the lack of regulation and of a formal global governance structure, the industry has managed to operate quite effectively. Nonetheless, the fears that the industry is used for illegal activities, means that it necessary to adopt laws and regulations to regulate the operation of eSports. Some of the main concerns are match-fixing, gambling and doping.

While many organizations/bodies attempt to assume the role of the regulator they are not officially recognized as central authorities. As a result, it is extremely difficult to apply a regulatory framework or ground rules for regulating eSports internationally and uniformly. The opinion is that, under the supervision of an official body, the regulation at the international level could provide a great dynamic for the future development and evolution of the industry.

On a national level, some countries have already taken several steps towards regulating the eSports industry. South Korea is an example of how the industry can be regulated as they have created a comprehensive regulatory system. The Korean Electronic Sports Association (KESPA) has been established since 2000, and it is responsible for licensing and regulating professional players. It should be noted that betting activities concerning eSports are not considered part of the eSports industry for regulatory purposes.

France has also established a national organization for eSports called the Fédération France-Esport or French eSport association, and issued two legislative decrees: one regulating the organization of video game competitions; and the other regulating the status of salaried professional players of competitive video games. According to these decrees, the duration of the contracts between players and teams should be 1-5 years. In addition, children under the age of 12 are prohibited from participating in competitions where there are financial rewards. It is worth noting that France was the first European country to establish rules for regulating electronic games.

Several EU countries have followed suit, such as Italy, Spain and Germany, and have adopted regulatory measures in relation to the eSports industry, but their regulatory framework is not characterized as compact and comprehensive. Also, it appears to be extremely fragile and easy to manoeuvre.

Although there have been discussions in the US in recent years, no significant legislative action has been taken to date. However, it should be noted that Nevada is drafting legislation for a governing body that will oversee eSports and issue official licences.

Conclusions

The immense success of eSports is undeniable and it can reasonably be argued that the industry is approaching a turning point, which makes it necessary to adopt legislation to direct its future growth and to retain its ever-growing audience.

What is proposed is the adoption of a single international regulatory body, similar to the governance structure of the traditional sports—such as FIFA— which will supervise the eSports industry and publish relevant guidelines, directives, regulations and a universal code of conduct for the transparent and fair regulation of the industry.

In parallel with the international body, national bodies must be set up in each country, which will be responsible for overseeing the implementation of the measures proposed by the global body, whilst, at the same time, having some discretion to regulate specific issues at the national level.

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