Grey Areas in Unregulated E-Sports Law
E-sports, in its most basic form, are adventure games in which players compete against each other in competition or fulfill organized missions. In this sense, with the first legal regulation made in Maryland, E-sports is defined as video games such as individual shooter games, real-time strategy games and multiplayer online battle arenas, where players compete against each other; it is accepted that the games are not randomly generated by the video game console or other device and that the dominant factor determining the results is the relative skill of the players.
The competition between players in video games, which has been in our lives for decades, has been taken to the next level with e-sports, namely team competition. It is seen that this team competition creates a huge economy with players, teams, sponsors, fans, broadcasters and professionals, where good players are hired in professional teams, individual sponsorships from famous brands, sponsors establish professional teams, tournaments take place around the world, bets are placed on these tournaments, fans of the teams are formed and follow this competition both online and in stadiums.
Bets
In e-sports, there are three types of betting in practice. The first one, as in traditional sports betting, is betting based on the prediction of the winning team. The second one is skin betting, which is betting on in-game items and is quite common because it is easy to play. These in-game items are icons such as weapons, potions, swords or other tools that help players progress through the game faster and more efficiently. In this sense, we can call “skin betting” “equipment betting”. Betting on in-game items alone amounted to 6 billion USD worldwide in 2016 and is growing exponentially every year. The third type of betting is what can be called fantasy e-sports betting. This is where a roster of e-sports players is formed for a tournament or league season, and based on the points collected based on the real-life performances of these rosters, the ranking of the fantasy league is determined and prizes are awarded to the winners. In this sense, in many countries where sports betting is illegal, bets on e-sports are placed in the form of pari-mutuel bets and the parties do not face any sanctions as they do not win real money. In addition, the sites where equipment bets are placed are set up like a forum site for the game, there are no age restrictions and there are no measures regarding the personal data of the players.
Investments
Today, esports organizations are organized in such a way that there is little state control and usually game producer companies create tournaments. In this sense, marketing, concession and sponsorship agreements, ticket and broadcasting revenues are controlled by these esports organizers. In order to increase the quality of the games played in the organizations they license, game production and distribution companies require players, teams and organizations to follow the rules set by the company.
To give an example in this context; Riot Games stands out by protecting e-Sports players against their own teams. In the League of Legends Championship League Official Rulebook, Riot Games itself checks the ages of e-Sports players who will participate in the championship league, the minimum wages they earn, and parental permissions for minors. In addition, Riot Games requires e-Sports players to send a copy of their contracts to Riot Games. In case of disputes between the e-Sports player and his/her team, Riot Games evaluates these contracts and imposes a sanction on the unfair party.
However, it is claimed by the parties that not all game producers and tournament license holders act in this way, in some cases, the player is unfairly blocked, bribe payments and allegations that a player cheated in order for the eSports team to be relegated from the league are put forward, and this raises questions among investors who will invest in eSports teams. In this regard, companies that have the privilege to organize tournaments should notify the relevant federations regarding in-game rules, online sharing of the necessary evidence in case of rule violations, and most importantly, company ethical codes, and these processes should proceed transparently.
Advertisement Activities
Since the standard license terms of most videos or e-games expressly prohibit commercial use of the content in principle, the organizer of an esports competition or event must have separately granted rights. In terms of advertising in esports, the general rules on advertising and sponsorship apply. From an unfair competition law perspective, attention should be paid to the prohibition of confidential advertising. The commercial intent of a sponsor or advertisement must be disclosed to the viewer. Technically, there are two ways for a media provider or broadcaster to advertise: either the provider inserts advertising in the videos or uses promotional content during the game or at the location of the game event. In both cases, there must be a clear distinction between promotional and editorial content and the promotional content must be clear and easily recognizable as such.
Given copyright issues and the organizer’s right to license the broadcast of the event, it is very important that contracts are carefully drafted. Most importantly, consideration of the game publisher’s copyrights and obtaining its effective and unconditional consent should be addressed in detail in an organizer’s agreement for a planned esports event organization. In this case, the organizer’s right to sub-license the broadcast as well as advertising and sponsorship in general should be considered. Furthermore, in order to eliminate potential conflict of interest between the organizer’s sponsors and in-game advertisers, existing contracts should be evaluated for possible liability, exclusivity and non-competition clauses where necessary.
Contracts
-In esports teams, where players come together online and often do not know each other personally, it is generally not possible for a team to sign a contract, associate and take other legal steps unless there is investor support and guidance. However, in this field, professional or aspiring players, sponsors, teams, leagues and even broadcast channels make contracts between them, and in this sense, the contracts between the parties are similar to the contract examples evaluated within sports law. One of the important issues here is the age of the players. The high number of underage players and the esports market, where bets, sponsorships and a serious economy revolve, make it necessary to have measures for the protection of those players, and there is a need for a standardized contract set regulation that guides these contracts between the parties, especially about player contracts.
Conclusion
As new players, investors and fans start to join, the industry is growing rapidly and tournaments and leagues are massive in size and value. In Turkey, which has the potential to lead the way in esports with its dynamic and young population, the industry continues to grow rapidly. In this regard, an e-sports federation called TESFED was established, creating a bridge between major tournament organizers and esports teams. However, it is necessary to set minimum standards for contracts, determine the minimum wage, ensure that the training of players is not interrupted, pay sponsorship shares and other protective measures and regulations should be made.