ICE: Is eSports gambling?

ICE: Is eSports gambling?

Tuesday, February 2, 2016 Totally Gaming
The sector could face regulatory challenges in the US

The growing eSports sector faces several hurdles before it becomes a significant wagering platform in the US, according to a panel of experts.

Speaking today (Tuesday) at ICE Totally Gaming at the ExCel in London, Jones Walker partner Marc Dunbar said that he expects eSports to face challenges on two different levels before becoming a regulated betting market in the country.

Such obstacles are likely to leave eSports facing a scenario that is a “blend of what is happening with daily fantasy sports (DFS) and sports betting”.

Dunbar said: “It’s the logical extension of the debate, because of the growth and significant amount of money already being wagered on eSports.

“Regulators are starting to wake up and look at whether it is a fair marketplace in which to compete, and there will be issues on two levels.

“Firstly, when someone pays an entrance fee to compete in a competition, there are about 50 definitions in the US about whether it is gambling.

“In Florida we have a skill-based statute that says that if you are competing against another for money, or if you are competing for a pot of money, that is a wager. That view is fairly common in places like New Jersey.

“Secondly, you then have the other type of ‘competition’ in terms of people wagering on the performance of competitors. It’s an incredibly fast-moving competition, but I think it will be a long time before eSports has a significant wagering platform in the US.”

Michael Cohen, senior vice-president, general counsel, and corporate secretary at Caesars Interactive Entertainment, said that another potential area of concern for regulators would be the opportunity to cheat.

“For an industry that is handling millions of dollars in terms of player entrance fees and third-party wagering, you have to wonder who is looking at the software,” Cohen said.

“Who knows whether it is possible to use software manipulation or cheat codes? I’d expect regulators in the UK and Asia to take the lead on this and ask gaming producers to open up their source codes in the not-too-distant future.”

The Porter Group’s president and chief executive, Jon Porter, said that the broader issue of skill-based gaming had left a “cloud of confusion” in Congress.

“My role is to try to interpret what the industry wants to do in the US and relay that to policymakers,” Porter said.

“There’s a lot happening in the US. There are blurred lines for elected officials, and it’s our role as an industry to educate them so they can understand and make the right decision.

“There really is a debate amongst members of Congress about whether the Federal Government should legislate on skill-based gaming, sports betting and DFS, because there is confusion about what to do.”

 

The development and challenges around eSports and how the industry should adapt will be covered in depth at GiGse, running from April 27-29, San Francisco, CA. For updates on GiGse 2016 and to register for tickets visit: www.gigse.com or follow www.twitter.com/gigselive

 

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