Regulating E-Sports – An Opportunity and a Challenge
In the past few years, there has been a debate on inclusion of e-sports in the Olympics, such that the International Olympic Committee – for example, the Global Association of International Sports Federations held a forum on the subject in July 2018.[i] Although there is no consensus on its inclusion yet[ii], this discourse itself is an indicator of the immense popularity of e-sport.
Although we have witnessed the invent and growth of video games since past 70 years or so, the transition from hobby to business was made possible by the internet which connected players from around the world[v] allowing them to play competitively. With this began the video game world championships, the world’s first eSports event being held in 1997 as the ‘Red Annihilation Tournament’.[vi] Since then there’s been no looking back, the intensity and the popularity of the events and championships has increased exponentially. Some reports even predict that the global esports revenues will cross $1 billion in 2019 and will cross $1.8 billion by 2022.[vii]
The field has just begun to grow and the opportunities it brings with this growth are endless. Employment in this field is on a rise. The number of players are increasing day by day and are handsomely paid with the highest pay going upto $15000 a month.[viii] The jobs are however, not limited merely to the players, with companies looking to hire team managers, account managers, business executives, product managers and even meme specialists.[ix] According to HitmarkerJobs.com, the largest esports job website, 2497 jobs were posted only in the first half of 2018.[x] Moreover, since esports and traditional sports are starkly different, infrastructure that meets the needs specifically of esports are being built for the industry. This includes specialised stadiums, improving video streaming capabilities, developing anti cheating programs etc.[xi]
As this particular field is growing exponentially, it brings along a number of legal challenges vis-à-vis contracts and endorsements by players and teams; intellectual property of the publishers; and legal betting, amongst others. The world of E-sports is in dire need of regulation of these crucial legal aspects to ensure the smooth functioning and growth of the field.
Growth of any new line of business and need to regulate it is good news for lawyers, e-sports being no different. The growth of e-sports has given rise to a new branch of law: E-sports law, for lawyers who specialise in the field. The need for the same has increased to such an extent that in 2017, a lawyer Mr. Bryce Blum opened a new firm dealing exclusively with E-sports law, the first of its kind, known as the ‘Electronic Sports and Gaming Law’ (ESG Law).[xii]
Scenario in India
Although e-sports are gaining ground rapidly in India, the regulatory system in this regard is archaic. In January 2019, Mr. Shashi Tharoor presented a Private Member Bill in the Lok Sabha known as the Sports (Online Gaming and Prevention of Fraud) Bill.[xiii] This Bill was introduced to provide a statutory framework to ensure that the business in the field runs smoothly and without any illegal practice. The introduction of this Bill was especially important for India does not have any specific law dealing with e-sports.
The possible avenues where legislative intervention is required are as follows:
1. Recognition of Players
Professional esports players should be recognised as athletes, for them to avail benefits and protections that are guaranteed to players of traditional sports. Protection of interests, special visas, job security through government jobs are just a few of the advantages that ‘athletes’ enjoy.[xiv]
2. Improve Public Perception
Recognition as athletes shall help improve the public perception towards the game from a mere ‘hobby’ to an actual sport. This change in perception shall help improve the number of players who play professionally as they shall now receive support from family, institutions and society.
Presently, India lacks a governing regulatory body for esports like the Board of Control for Cricket in India for cricket and federations governing other sports. A governing body is needed to control all aspects of the game including but not limited to maintaining competitive integrity, standardising the rules and regulations, controlling malpractice, scheduling events and promoting the game. The United States eSports Federation is involved in multiple activities such as promoting & developing esports; protecting the athletes; mitigating negativity towards esports; prevention of doping etc.[xv] India too needs a federation for performing all these functions. Although the Esports Federation of India (“EFSI”) was established in 2016, it is yet to be recognised by the Ministry of Youth Affairs and Sports and the Indian Olympic Association; this is despite the fact that it has been recognised by the International e-Sports Federation and the Asian Electronic Sports Federation.[xvi] Due to this non recognition, there is a possibility that other esports federations may be formed, which may lead to further confusion. Thus, suitable intervention is required to either recognise the ESFI or to create a new national governing body for esports.
So far, e-sports are deemed more to be a part of the entertainment industry, instead of sports and are hence, structured in a similar manner . The teams are owned by private players and the competitions are also held by private companies, usually the publishers of the video games.[xvii] With no government involvement and the players usually being young with little knowledge of the law, they are often at a disadvantage when they enter into contracts. As a consequence, they invariably end up contracting away a number of important rights.
For instance, recently during the preparation for the Asian Games, wherein esports were a demonstration sport, there was serious outcry regarding the contracts that the ESFI made the players sign. The contract imposed harsh conditions, such as waiving off any organisational responsibilities of the ESFI.[xviii] Therefore, in order to protect the rights of the players, legislative intervention is imperative. The Government can prescribe minimum standards for terms in the contract such as the tenure, the working conditions etc. so as to ensure that the players are not being taken advantage of.
Betting or gambling in e-sports is a major issue as it does not fall under the traditional definition of gambling and is hence, unregulated. This was recognised by the Law Commission of India in its 267th Report, wherein the Commission emphasised the immediate need to regulate the sector due to rapid increase in online gambling.[xix] This aspect was also one of the main focus of the Private Member Bill that was introduced in the Lok Sabha, but no action has been take yet.
Regulations are also required to prevent any sort of malpractice in the e-games such as, match fixing and cheating. Esports are extremely different from traditional sports and thus, the means of cheating are novel and unprecedented as well. Strict regulations to prevent this as well as to punish are required.
This is evidence of the fact that the Indian law with regard to esports is primitive and in dire need of change. There are several countries around the world which have a robust mechanism for the regulation of esports and this shall be discussed next.
Korea – A Classic Case in E-Sports Laws
South Korea has the fourth largest esports arena in the world.[xx] Evidently, gaming is very popular in South Korea. The world’s first pure eSports stadium was built in Yongsan district of South Korea in 2005.[xxi] A key reason behind this popularity is that during the 1990s, when esports were in its initial stages, the government created a national broadband network. This gave widespread internet access around the country which allowed the rapid spread of video games or esports.[xxii] This was followed by the establishment of the Korea Esports Association (henceforth KeSPA) in 2000, under the Ministry of Culture, Sports and Tourism.[xxiii] The association was established to manage and promote esports in Korea[xxiv], as well as to legitimise esports and conduct its events[xxv].
Since an esports governing body was established so long ago in the country, the governance of this field is robust. The KeSPA is a member of the National Olympic Committee of South Korea. The system created is such that in order to compete for any esports tournament, one must first obtain a license for the same, by providing one’s resident registration number. This is done to ensure that every video game account is linked to a real person, to maintain accountability and to keep a check.[xxvi] In 2011, a ‘Shutdown Law’ was also passed by the government which forbade children below the age of 16 to play online games between midnight and 6 am.[xxvii] Like all other governing bodies, KeSPA is also involved in the promotion and organisation of esports events. For instance, the KeSPA Cup is a tournament that has been introduced wherein players of all games can participate.[xxviii]
The other aspects of the esports network are also strong in South Korea. Competitive integrity is ensured through a system of prevention and strict punishment. Certain kinds of cheating are punishable under the South Korean Criminal Code.[xxix] Recently, the Game Industry Promotion Act was amended to make ‘boosting’; the act of one player playing on another’s account, illegal. The act is punishable by a fine upto 20 million won along with a two year prison sentence.[xxx] Player welfare policies are also in place in South Korea. A minimum salary is guaranteed by all to all professional players and a minimum of a one year tenure is mandatory in all contracts.[xxxi] This is done to ensure that the players are protected by means of adequate income and job security.
Other countries like France also have similar provisions. In 2017, a law was passed to regulate the tenures of esports players, with 5 years being the maximum and 1 year being the minimum.[xxxii]
Comparison and Conclusion
If we compare Korean laws with Indian ones pertaining to e-sports, it is evident that South Korea’s laws are much stronger than Indian laws . The rapid growth of esports and its huge possible revenue turnout renders it very essential that India learn from countries around the globe and pass relevant laws to ensure the smooth functioning and growth of the field. The need of the hour is that Indian lawmakers interact with all interested stakeholders- players, publishers, federations- to come up with ideas for laws that meet the needs of all. Esports is an emerging arena with a great scope of revenue and investment, one that has been accepted and welcomed in countries around the world, and India must not remain behind.
[i] Lisa Marie Segarra, “The International Olympic Committee will host a forum on E-Sports”, Fortune, 27 June 2018, accessed via http://fortune.com/2018/06/27/olympics-esports-forum/.
[ii] Lisa Marie Segarra, “Why the Olympic Games are steering clear of E-Sports”, Fortune, 23 March 2019, accessed via http://fortune.com/2019/03/22/esports-olympic-future/.
[iii] Eric James Valmonte, ‘Esports is now officially in the dictionary’ (2015) Mineski, available at https://www.mineski.net/news/esports-is-now-officially-added-in-the-dictionary (Last accessed 28 June 2019).
[v] Andrew Lynch, “Tracing the 70-year history of video games becoming eSports”, Fox Sports, 6 May 2016, accessed via https://www.foxsports.com/buzzer/story/esports-explainer-league-of-legends-heroes-of-the-storm-hearthstone-cs-go-dreamhack-050616.
[vi] “The History and Evolution of Esports”, Medium, 3 January 2018, accessed via https://medium.com/@BountieGaming/the-history-and-evolution-of-esports-8ab6c1cf3257.
[vii] Hilary Russ, “Global Esports revenues to top $1 billion in 2019: Report”, Reuters, 12 February 2019, accessed via https://in.reuters.com/article/videogames-outlook/global-esports-revenues-to-top-1-billion-in-2019-report-idINKCN1Q123M.
[viii] BetIt Staff, “How much do professional esports players make?”, Medium, 2 October 2018, accessed via https://medium.com/betit/how-much-do-professional-esports-players-make-40da51eba542.
[ix] Rich Huggan, “Esports is hiring- and you don’t need to be a player”, VentureBeat, 30 August 2018, accessed via https://venturebeat.com/2018/08/30/esports-is-hiring-and-you-dont-need-to-be-a-player/.
[xi] Andrew Paradise, “How strong infrastructure lifts the esports industry”, VentureBeat, 7 May 2017, accessed via https://venturebeat.com/2017/05/07/how-strong-infrastructure-lifts-the-esports-industry/.
[xii] Eoin Bathurst, “Bryce Blum creates first Esports-exclusive law firm, already planning expansion”, The Esports Observer, 27 June 2019, accessed via https://esportsobserver.com/esg-law-is-the-first-esports-only-law-firm/.
[xiii] Gaurav Laghate, “Shashi Tharoor moves Bill to regulate online gaming”, The Economic Times, 15 January 2019, accessed via https://economictimes.indiatimes.com/news/economy/policy/shashi-tharoor-moves-bill-to-regulate-online-gaming/articleshow/67534323.cms.
[xiv] Shaun Star and Nirav Bakshi, “The growth of esports in India- a short review of the main legal and regulatory challenges”, LawInSport, 3 April 2019, accessed via https://www.lawinsport.com/topics/articles/item/the-growth-of-esports-in-india-a-short-review-of-the-main-legal-and-regulatory-challenges.
[xvi] Visvak, “eSports makes it way to Asian Games”, The Hindu, 24 August 2018, accessed via https://www.thehindu.com/society/esports-is-on-the-rise-in-india/article24770235.ece.
[xix] The Law Commission of India, Two Hundred and Seventy Six Report on ‘Gambling and Sports Betting including in cricket in India (2018)’.
[xx][xx] Naandika Tripathi, “India in the e-sports arena”, Forbes, 15 November 2018, accessed via http://www.forbesindia.com/article/real-issue/india-in-the-esports-arena/51779/1.
[xxi] Florian Larch, “Seoul-The Home of Esports”, ISPO, 10 January 2019, accessed via https://www.ispo.com/en/markets/seoul-how-city-addicted-esports.
[xxii] Valentina Popova, “Esports and Gaming Culture in South Korea: A “National Pastime” or Addictive Disease?”, Novasia, 13 November 2018, accessed via http://novasiagsis.com/esports-gaming-culture-south-korea-national-pastime-addictive-disease/.
[xxiii] Emin Ozkurt, “Esports in South Korea- a short overview of the legal ecosystem”, LawInSport, 10 April 2019, accessed via https://www.lawinsport.com/topics/articles/item/esports-in-south-korea-a-short-overview-of-the-legal-ecosystem.
[xxiv] Supra note xxii.
[xxv] Supra note xxiii.
[xxvii] Jiyeon Lee, “South Korea pulls plug on late night adolescent online gamers”, CNN, 22 November 2011, accessed via https://edition.cnn.com/2011/11/22/world/asia/south-korea-gaming/index.html.
[xxviii] Supra note xxii.
[xxix] Supra note xxiii.
[xxx] Owen S. Good, “South Korea criminalizes ‘boosting’ with new law”, Polygon, 9 December 2018, accessed via https://www.polygon.com/2018/12/9/18133391/south-korea-boosting-esports-league-of-legends-law.
[xxxi] Supra note xxiii.
This blog is a part of the RSRR Blog Series on E-Sports in association with Ikigai Law. By Bhumesh Verma, Managing Partner, Corp Comm Legal, New Delhi. (The author has been assisted by Stuti Srivastava, Junior Editor, RSRR)