Watson said that Sportradar opted to avoid “rushing headlong” into esports and instead chose a partner that would give the company a “peerless insight into the ecosystem, how it works and all its idiosyncrasies.” However, he acknowledged that there are “growing pains” in the sector and issues that need to be tackled head on.
“How it relates to the betting industry and how it relates to those who wish to undermine its integrity are two areas that need to be dealt with and ideally in short order,” he said. “Our betting brand, Betradar, has put together a suite of data, content, streaming and odds solutions that will enable regulated and licensed betting operators to offer a comprehensive and professional esports-tailored proposition to their bettors, helping the already healthy amount of betting in esports into the regulated space, where it can be monitored and audited more easily.”
Adopting Sportradar’s Fraud Detection System is a game-changer for esports as it shows “a prominent stakeholder – the biggest tournament organiser in the world – stepping up and taking the lead on a key governance and integrity issue in a fast-maturing sport,” according to Watson.
As recently as January, Australian esports organisation 24/7 Esports cut ties with a newlyrecruited team amid claims of match-fixing. In October the Korean Esports Association said that it planned to impose life bans on one player and two coaches following the arrests of 12 individuals in relation to allegations of corruption.
Esports faces challenges that stem from its unorthodox structure
Additionally, there have been numerous reports of the widespread use of performanceenhancing stimulants such as Adderall, which is banned by American football’s NFL, Major League Baseball, the National Basketball Association and the National Collegiate Athletic Association in North America. The ESL started administering random doping tests after top esports player Kory Friesen claimed in a July 2015 interview that players at a particular tournament were “all on Adderall,” but the scale of the issue is not known.
Forced to confront such issues, one major challenge facing Sportradar and those who wish to put esports on a more stable and structured footing is the rapid increase in the number of players and viewers.
League of Legends reportedly attracts as many as 67 million unique players per month, while Dota 2’s ‘The International’ featured a prize pool worth more than $18m. The sporadic nature of many esports series means physical rather than digital spectator numbers are inconsistent, but events have taken place in iconic venues such as New York’s Madison Square Garden and 40,000 people attended the 2014 League of Legends World Championships in Seoul, South Korea.
“There currently seems to be a debate within the ecosystem as to how the sport should progress and proceed,” Watson added. “There are those who see a more traditional sport model, with an international federation overseeing rules, calendars and administration, perhaps with a look to seek acceptance into the Olympic Games down the road, as the way forward.
“Others are sceptical. They see the existing growth as a clear indicator that the organic, nonconventional route suits this unique ecosystem and that there is no need to try to fit any existing mould. It will be interesting to see how those debates evolve and whether a power struggle emerges.
“There is no doubt that the sport is now starting to face challenges that stem from its unorthodox structure. Interested parties are unclear who to approach, sign with or work with; commentators don’t know who to blame or who to focus responsibility on. The ESL has looked to take a strong stance on certain issues – notably anti-doping and anti-match fixing – and for our part we applaud that initiative and hope others see the importance of these to maintain credibility and growth.”
Betting on esports is becoming increasingly popular. Pinnacle Sports, for example, puts esports inside the top seven biggest markets in terms of volume of wagers – above golf and rugby.
“I think there needs to be a clear distinction in types of bookmakers,” Watson added. “There is an existing unregulated betting market – the lounge sites – where thousands of US dollar values are wagered in the form of in-game items such as weapons or spells. There is legitimate concern about how those are policed and how bettors using them are protected. On the other hand, the traditional regulated bookmakers are also now starting to take a serious interest in offering esports bets and at the last count there were about 50 of the key operators providing esports markets.”
The regulatory outlook in esports’ largest global market of North America – which generated $93m in revenues last year to account for 37 per cent of the global total in the sector, according to Newzoo – is far from clear. Marc Dunbar, a partner in US law firm Jones Walker’s government relations practice group, expects esports to face a two-pronged challenge from lawmakers.
“Regulators are starting to wake up and look at whether it is a fair marketplace in which to compete,” he said. “When someone pays an entrance fee to compete in a competition and it goes into a prize pool, there are about 50 different definitions across the US about whether it is gambling.”
There are currently only four states in the US where gambling on sports is allowed, and the general prognosis for gambling in the country remains convoluted and unpredictable.
“In Florida we have a skill-based statute that says that if you are competing against another person for money, or if you are competing for a pot of money, that is a wager,” Dunbar added. “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.”
While regulatory obstacles may be on the horizon, potential reputational issues also should not be ignored. By its nature, esports is not a physical pursuit. If gaming – and therefore esports – pushes people towards an unhealthy lifestyle, its reputation as a ‘sport’ will become more difficult to justify. Any such negative connotations will give potential commercial entities an additional issue to consider, regardless of the potential eyeballs on offer.
According to Will Kelly, the content and strategy manager at professional esports team Fnatic, “total practice” for players, including conversations, analysis and game time, is between 10 and 12 hours per day. However, some players have claimed that it is normal in places like South Korea to play for at least 16 hours straight, with some even claiming to survive on as little as four hours of sleep per night.
“There are always concerns about their health, which is why we take precautions to improve things through diet, exercise and the likes of daily yoga sessions,” Kelly said.
“Our players are mostly European as well as Asian. The age range is between 18 and 25 years old. Our fans are incredibly diverse geographically, spanning from South America all the way to the far eastern corners of Asia. Demographically speaking, the vast majority of them are between the ages of 15 and 24, and male.”
The impact of gaming on the development of young brains is also an area of concern for some, despite the fact that in the US, for example, more than half of all households have a dedicated video game console.
University of Sydney lecturer Dr Philip Tam is a child psychiatrist, researcher and the co-founder of the Network for Internet Investigation and Research in Australia.
“There are so many studies in Australia and a lot from Asia, America and Europe looking at characteristics of gamers,” he told SportBusiness International. “Multi-user games are probably the most addictive domains on the internet. What is happening in the developing brain is a massive issue.
“Children are the main concern because they still have developing brains. There is a concern about the overuse of screens as opposed to person-to-person contact. It’s a concern about sociability. A recently-published study in Singapore, which featured about 300 children, suggested that there are changes in the brain structure among those children who spend excessive amounts of time gaming. It’s too early to make a definite conclusion as to whether heavy video game use is damaging brains, but there is interesting research out there which suggests it might be.”
Some critics also question how healthy it is for gamers to immerse themselves in a world that belongs behind a screen. “Video game culture creates a self-contained universe, by which I mean that players get everything they need from within the game,” Tam added. “They can meet people and chat to people, compete and win. I have had clients who have played non-stop for two or three days, maybe with a short sleep break. There have been deaths by internet overuse, mostly in China.”
However, Tam acknowledged that there are benefits as well as drawbacks to gaming. “There are positives,” he added. “Video gaming is a cultural phenomenon. It brings people together and people have fun.
“It’s about getting the balance right. I have got many young clients who attend esports events in Sydney which they enjoy thoroughly and use to socialise and meet other fans. Though these events clearly have a commercial and business imperative, if participants do not ‘overdo’ things and game excessively to the detriment of other activities, it is probably a positive thing for them overall.”
To continue reading the Esports Focus, please click the links below:
The Game Changer (1/4) – Esports Focus
The Game Changer (2/4) – Comparisons and Expertise
The Game Changer (4/4) – Market size and Business model