The Rise of eSport and a new field of Law

While interesting in terms of cultural trends, eSports has actually brought some unique concerns from a legal viewpoint. Just like any new and growing industry, there are issues for eSports, from contracts to endorsements. Players and everyone involved must understand the legalities of this new field of entertainment.

In fact, the need for professionals who understand this field of law has grown to the point that the first law firm dedicated entirely to eSports law was opened in early 2017, according to ESPN.

E-Sports in Malaysia

E-Sports in Malaysia is a relatively new industry which developed in recent years where a number of young players have emerged, making their names in national as well as international e-Sports competition. The e-Sports industry had gained recognition from the Malaysian government with the launch of e-Sports Malaysia (ESM). ESM is registered under the Malaysia Sports Commission where the government had allocated about RM20 million in the recent 2020 Budget in order to develop the local e-Sports industry.

Here are some legal issues to be aware of:

1. Contract Law

As mentioned earlier, the majority of e-Sports players may consist of teenagers thus they may be too young to understand any contract let alone the importance of it. As a result, tournament organizers for instance may take advantage of them and may draft a one-sided contract or worse, no contract may be drafted at all.

Players, teams, tournament leaders and leagues will need to negotiate, draft and sign contracts. It is well established that in traditional sports players have managers and attorney to

help them make business deals and navigate legal situations, the case is not the same for esports players. Formal representation would help the players get the compensation they deserve as well as level the playing field when negotiating contracts with sophisticated companies with skilled legal representation.

2. Intellectual Property

There are many intellectual property issues which may revolve around e-Sports however this article will focus on a few issues namely copyright ownership or authorship over ‘avatar’ of the game and broadcasting rights problems in e-Sports;

a) Copyright

Authorship – Ownership

‘Avatar’ is a graphical representation of the user or the user’s character in a particular game. Question may arise as to who owns the copyright to the avatar created especially if the players customize the avatar on their own by using the tools of the game.

There is a possibility that the person who customized the avatar is assumed as the ‘author’. However, in copyright law, even though the person is deemed as the author, it does not necessarily mean that he can claim ownership of the ‘avatar’ Hence if the avatar is created under the course or employment or commission which is highly unlikely, the ownership will vest upon the employer or the person who commission the work to create the ‘avatar’. Question prevails.

b) Broadcasting Rights

Broadcasting rights are one of the main intellectual property issues in e-Sports which is yet to be resolved. One example is the dispute between Korea e-Sports Association (KeSPA) and Blizzard Entertainment over the broadcasting rights of the popular game Starcraft. The dispute arose when KeSPA decided to sell Starcraft’s broadcasting rights without first seeking permission from Blizzard Entertainment. Blizzard Entertainment claimed that since they are the creator of the game, the broadcasting rights should remain with them which they eventually awarded to GOM.tv, the competitor of KeSPA.

Nonetheless it is worth pondering whether tournament organizers have the right to sell the broadcasting rights of a tournament in the absence of any intellectual property rights over the game. Since broadcasting rights generate big revenue, it is no surprise tournament organizers would want a shot in claiming their rights.

3. Gambling

Gambling is already commonplace in traditional sports, but is untested in the e-Sports world. It is likely that real money eSports gambling will be subject to the same rules as traditional

sports gambling, but there will be unique complications. Children have much more access and anonymity in e-Sports, so underage gambling will be a large concern with children stealing their parents credit cards.

Nevertheless, the eSports industry is gaining attention among those who enjoy betting, and this has created another round of legal concerns. From betting scandals, including rigging games to ensure a certain outcome, to the legality of whether or not players can bet against or on themselves all need to be addressed. Many e-Sports teams are based in other countries, which means international gambling issues can be persistent.

As professional standards for betting are embraced across the industry, legal professionals can expect to see a rise in the number of lawsuits related to gaming that they handle.

4. Regulation

Unlike badminton that has the Badminton World Federation and football with FIFA, there is no one regulatory body for esports. As there are so many different games in esports, each with vastly different rules, it is difficult to have a single body to regulate the sport.

Without a global authority, international tournaments will be difficult due to lack of consistency in rules and regulations. Right now, individual games are regulated by the game publishers, but it will be interesting to see how national or global rules fit in, once they are established. The sustainability of the eSports world is only possible if there is consensus in regulations on issues such as cheating, match fixing, and doping. There are different conversations considering a pan-regional regulatory body, national regulation, eSport-specific regulation, and tournament-specific regulation. Still others propose following traditional sports governance. Only time will sort out these different approaches.

While e-Sports is still in its infancy globally, esports law has definitely started to pick up. Everyone involved in the scene is beginning to understand their rights and how they can enforce them. There are still a lot of unexplored areas of esports law that the industry will definitely have to tackle someday. From hacking and e-doping to advertising and merchandise, there will definitely be intriguing developments and exciting times ahead.

As the popularity of this field grows, so will the demand for legal services. Those studying law who can get the right training to position themselves to help in this field could find profitable career potential in this up-and-coming specialty.