eSports simply stands for Electronic Sports—a concept that turns online gaming, basically competitive video gaming between two or more players, into a viewing experience, and thereby a betting opportunity.
Reports vary dramatically on both number of viewers tuning into eSports broadcasts worldwide and the market revenue. Some reports go as far as to claim 300 million people are watching, and revenues upwards of $900 million already, and with estimates that fans will place bets for a total $13.5 billion by 2020!!! What we can say, without doubt is a lot of people are tuning in, and there is a significant financial reward for those prepared to take the risk entering the market. According to Alex Igelman, managing director of Gaming Research Partners, eSports betting already surpassed golf, tennis, and rugby. Even more evidence; the world’s gambling hub Las Vegas has also embraced eSports opening an Arena at the top of the Luxor Hotel, becoming the first permanent eSports venue.
Some countries are also taking the eSports opportunity very seriously. Back in 2013, the USA declared professional eSports players as professional athletes! This doesn’t involve the same discipline as traditional athletes (although studies show similarities between gamers and athletes) but does make travelling the world to compete at events far easier. It also allowed sponsorship both with the athletes and gaming development companies and there are now words on product placement within games. In 2016, France opened similar lines to the USA but taking a step further and linking the partnership with the “French National Olympic and Sports Committee”. Turkey have also followed a similar path.
The dramatic increase of eSports should have a massive impact on the betting industry. With the protentional for so many tournaments to happen simultaneously across the globe, millions of players would be on-line at any time of the day and making wagers on themselves, as well as others wagering on the more structured eSports matches…but is it legal?
The UK gambling legislation – the Gambling Act 2005, does not distinguish between ‘payment to participate’ in competitive tournaments, and acting as a "betting intermediary" to allow players to play against each other. Processing as a "betting intermediary" would constitute an offence without a gambling licence from the Gambling Commission. A betting intermediary is defined in section 13(1) of the Gambling Act, as "a person who provides a service designed to facilitate the making or acceptance of bets between others".
The UK Gambling Commission published a discussion paper which establishes how it interprets the definition of "betting intermediary" in the context of eSports. To quote that paper, section4.7 “Given the definition of a betting intermediary, our preliminary view is that a person who is offering facilities for match ups, by introducing participants who bet against each other about who will win, is providing a service designed to facilitate the making or accepting of bets between others. If that is the case then the person offering those facilities may be acting as a betting intermediary and would need a licence”.
Therefore, a game publisher who accepted bets against players in a tournament would require a gambling license, but a game publisher could inadvertently enter into "betting intermediary" if, 1) the participation fees collected for tournaments are bets from players against each other (i.e. I bet I will win); and/or 2) if the prizes are winnings from those bets placed by the players who proceed to win the tournaments. This could of course constitute Pool betting if we wasn’t talking about “Skill” games, but that would be another paper!
Steve George, BG Operations, November 2018.