COVID-19 Pandemic: Legal Issues And Online Betting In Esports

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Esports also known as (Electronic sports) is a form of sports competition using video games. It can be played on different electronic medium like playstation, Mobile, Computer. Esports often take place in the form of multiplayer video game competitions between players on different computer or over the Internet.

Wagering in simple language means betting on an uncertain future event. The rising popularity of esports among around one billion people taking part in this in one form or the other makes it vulnerable for betting to gain easy money. There are several ways to bet on esports. Esports are also recommended by the International Olympic Committee’s summit in 2017 to be further included in the Olympic games. 

Types of betting 

  • Real money betting- this form of Esports betting involves real money wagers at agreed odds and get paid out if selections are correct.
  • Skin betting(Item betting)- A lot of modern video games feature virtual currencies and other items that can be then transferred between players. The players bet on each other skins for the gameplay. They do not enhance the skills but are there only for fun.
  • Social betting- In this type of betting friends or online contacts place informal wagers on the outcome of events between themselves.
  • Challenge betting- In this gamers compete against each other for real money, items and skins. A lot of gamers organize wagers among themselves. There are also websites that organize things a little more formally where the players and/or teams pay entry fees to enter a contest, and the winner(s) are further rewarded from the proceeds of those fees. 

COVID-19’s impact on online gaming

The lack of traditional sporting events globally as a result of the COVID-19 outbreak has hit the betting industry hard. Mass social distancing has minimized betting opportunities for sport. In their place video game competitions are seeing higher viewership, and data demand, than ever before. The reason for its sudden demand is that it can be played individually and streamed online over the Internet.

The other teammates can communicate safely sitting at their respective homes and entertain the viewers. With the quarantine leading people to spend more time at home, they have nothing but to stream online different types of video’s. High profile events and tournaments (including celebrity matches) coupled with a lack of alternatives has attracted not only new observers and fans but also new punters.

In Brazil during the (CBLoL), a record-breaking 336K simultaneous viewers watched the match on June 7 on Twitch. Famous sports channel ESPN has also started showing various Esports tournament. These examples suggest that Esports is definitely going to rise in the coming years. Many researches claims that the global esports market will generate revenues of $1,059.3 million in 2020. 

Legal issues

1) Intellectual Rights

In Esports, intellectual property generally involves content, characters, and gameplay owned by the publisher or developer of the game. The intellectual property owners often look to protect their copyrights, trademarks, patents, and licensing arrangements. Such protections can create unique issues for those investing in and around the game, such as team owners, players, and sponsors. 

2) Online streaming rights

Game content is the intellectual property of the developer. This can lead to licensing issues when leagues and online streaming platforms use the game at public events. In order to use the game and stream the action for viewers, a license must be obtained from the game developer. Additionally, players develop and monetize their personal brands by creating and publishing videos online. Players must be careful to operate within the confines of the end user license agreements with regard to the material they post online. There is a famous case of SpectateFaker (League of Legends) to understand the streaming and copyright issue. 

3) Legal betting

The eSports industry is a favourite among those who enjoy betting especially in the lockdown. This has created another round of legal concerns. In U.S and India Gambling is a subject under State list. There is no uniformity across the both the countries. In India all types of betting on sports is illegal but there are no laws of betting online or on Esports. Sports and Esports betting falls under the same bracket but the major difference between them is that the latter one involves minors. Most states in India and U.S are against the wagering on performance of minors. Due to this unregulated market the Esports betting industry in India according to the reports from International Centre for Sports Security is worth of 130 billion dollars.

4) Mergers, Acquisitions and Employment

As the Esports industry grows and develops, the issues of mergers, acquisitions and the definition of employment comes into the picture. Professional eSports leagues carry spots that can be further sold at a profit by the teams that fill them. Pro league spots are quite valuable, and legally their sale is then treated in a similar manner to other tangible property. As a result, sale negotiations and contracts may be necessary for these types of mergers and acquisitions. 

5) Advertising and Merchandise

Esports players and teams generate significant revenue via endorsements and merchandising as brands seek to capitalize on the large following that players and teams attract. Likewise, esports gaming companies have a secondary revenue stream from creating merchandise or licensing their intellectual property for merchandising.

Conclusion/Suggestions 

With the advent of online gambling and the anonymity that it ensures, the gambling and betting activities have acquired a global presence. It has, thus, become more challenging for countries to track these activities. If the gambling is further regulated it would ensure transparency in the market.

The revenue so generated by regulating and taxing, betting and gambling, may become a good source of revenue. This revenue can be then used for public welfare. Regulating the market will protect minors. Furthermore, the public will be safe from illegal gamblers.

We can’t ignore the fact that this industry cannot replace the live sporting events. It can take the advantage of this pandemic to grow at its full strength. Once the world retains its past living conditions, hindrance will be then caused in the growth of this Industry. The Law Commission of India report no.276 on Gambling laws suggests the parliament on how to make laws on online betting should be further referred to control and curb this issue.


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