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esports monthly round-up: August

30 August 2018

This month we give an update on esports’ unsteady progress towards potential inclusion in a future Olympic Games. We also touch on a recent issue which brings to the fore issues around the treatment of women in esports. Finally we look at Italy’s ban on gambling advertising and its potential effect on investment into the industry and a recent lawsuit in the US which highlights some important issues for start-up esports organisations to consider when trying to secure investment.

If you would like to know more about how we can assist esports organisations, investors, event organisers, sponsors, professional gamers and other stakeholders in the esports industry, please contact us using the details on the right-hand side. Note that we will be at ESI London between 18–20 September at Olympia, and will be happy to meet up there if you are you planning on attending.

esports in Olympic Games remains long way off

Later this month there will be an exhibition of various esports titles at the 2018 Asian Games in Indonesia. This was presented as a big step for esports, a prelude to inclusion as a medal sport at the 2022 Games. However, highlighting the lack of any real governance structure within esports (and crucially across the whole of esports), the Olympic Council of Asia has cast doubt on its viability.

Esports is unique in that it consists of many different esports titles (different games), the IP in which is owned by many different publishers who are mostly competitors of each other. In addition, for each esports title, there are a variety of leagues running and tournaments being staged, often adopting their own regulations and rules. Over time we will see that the regulations which apply to different esports titles will become more consistent, both in principle and in application, as more individuals from the sports industry move into the space and bring their experience in relation to integrity issues, such as doping and match fixing, and player welfare (amongst other things). However, getting the major stakeholders to somehow pool together and create a legitimate, singular governing body which will operate across the esports landscape, and which has functioning national bodies below that, still seems a long way off.

Whether this really matters or not is another question. Many will argue that esports is doing perfectly well without integration into the Olympic movement.

You can read more on the topic here.

Sexism in esports debate is ignited

As one of the world’s most popular Fortnite streamers, Tyler ‘Ninja’ Blevins is used to being in the limelight, but he recently hit the headlines and caused a stir within the esports community after he stated that he would not play with female gamers. He later clarified his statement, saying that the reason for this is that the public reaction to streaming with female gamers may create problems for his relationship.

Whatever the circumstances were, esports stars need to be careful about both their actions and their comments to the press, on social media and on streaming platforms to ensure that they do not inadvertently cause esports to be less accessible to female gamers and fans, who are still greatly underrepresented in the industry and are frequently the subject of online harassment.

In what is often referred to and thought of as a very modern and forward thinking industry, any examples of unequal treatment of women in esports will almost certainly, and quite rightly, hold the industry back. As one of the few mass participation activities which is suitable for almost everyone, regardless of age, gender, appearance or disability, it will be particularly galling if the environment created by the esports community fails to ensure that women can participate and compete in a fair and non-toxic setting.

With many examples out there of the really positive steps taken by certain traditional sports in recent years (the success of the England women’s football and cricket teams, and the increased popularity and participation of women in those sports, being just two examples), esports needs to ensure that it doesn’t lag behind when it comes to fostering a positive atmosphere for female participation, whether as a player or as a fan.

You can read more here.

Ban on gambling ads in Italy

The Italian Government has ratified a new law decree, referred to as the ‘Dignity Decree’, which is set to impose an outright ban on adverts for any gambling products, services or games in Italy. Agreements for advertising entered into before the date of the decree will be allowed to remain in force, but will cease to be enforceable as of 14 July 2019.

Concern has already been raised in the world of football, with several teams in Serie A sponsored by betting companies. However, this ban is also likely to have a significant impact on esports. The language of the decree is very broad and will include sponsorship agreements, in addition to regular advertising. New and established teams have traditionally struggled for funding (and are often loss making), so often look to sponsors to help with cash flow. There has recently been a vast increase in the amount of betting on esports tournaments, and as a result there has been a surge in the number of betting companies looking to sponsor teams and tournaments to raise brand awareness and encourage esports fans to choosing them over their competitors.

If the ban in Italy proves popular then other jurisdictions may consider similar measures, forcing esports organisations to look at other sectors for their sponsorship income, which based on recent history may not be so lucrative.

You can read more here.

Investor sues Unikrn betting platform

Unikrn, a dedicated esports betting platform, recently became the subject of a class action lawsuit in the US. Like many start-up companies in the esports and tech world, Unikrn sought funding using an Initial Coin Offering (ICO), whereby investors purchase tokens issued by the fundraiser, often with other types of cryptocurrency like Bitcoin or Ethereum. One such investor is now suing the platform on the basis that the tokens issued by Unikrn were actually securities and therefore breached securities regulations in the US. Unikrn is defending the claim, arguing that the tokens are simply utility tokens which can be wagered on the platform.

For many start-up esports companies, ICOs are often viewed as a quick and easy way to attract a large amount of investment, but this story and others like it highlight that the rules around ICOs and investment can be very complex. It remains to be seen how the lawsuit will play out, but the rise in claims against companies that have issued tokens may encourage new businesses to focus on alternative methods of funding in the future.

You can read more here.

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