Legal Issues Affecting ESports

What Are eSports?

“eSports” is the official term describing professional competitive video gaming. Teams of video gamers compete against each other in exhibition matches and tournaments, playing popular titles such as Fortnite, Counter-Strike, Call of Duty, StarCraft II, and Madden NFL. The popularity of video games, YouTube, and streaming video services such as Twitch, can be credited to the recent surge in the popularity of eSports.

While eSports events can be conducted remotely over the internet, its remarkably large fan base has taken the inherently at-home activity of video gaming and elevated it to a level rivaling conventional athletic competitions in its ability to fill sports arenas. eSports is enjoying validation by mainstream culture, attracting the attention of major corporate sponsors like Coca Cola and Nissan as well as sports media networks such as ESPN.

During the early life of the eSports phenomenon, televised competitions involving Blizzard Entertainment’s real-time strategy game known as “StarCraft” swept across South Korea. The country was among the first to raise the stature of eSports, hosting competitions as major stadium-style events. Korean StarCraft gamers enjoyed nearly the same level of fame and popularity at home as professional NFL and NBA athletes enjoyed internationally.

According to research cited in an ESPN article, there were 205 million eSports viewers in 2014. Viewership has only grown, thanks to the popular video-streaming service known as Twitch, which lets gamers broadcast gaming sessions on the internet. Importantly, the eSports fan base enjoys a level of diversity that other conventional sports struggle with, with a remarkable 38 percent of fans being women.

Sports & Entertainment Law

The seemingly uncontainable growth of the eSports industry makes it an attractive area for potential legal disputes. The demand for legal representation in the field of eSports has led to the founding of the eSports-centric law firm in Seattle. Legal issues that face people working in the eSports industry range from endorsements to sports gambling.

Like traditional sports athletes, professional eSports players are paid through endorsements and competition awards. Endorsement deals between players and corporate sponsors implicate issues of likeness rights.

As eSports continue to grow in popularity and commercial success, so will the sophistication of endorsement agreements between players and their sponsors. Endorsement contracts give corporate sponsors the right to use the name, likeness, and image of an eSports player or team with regard to advertising the sponsor’s business.

When endorsements involve major corporations, there will likely be a disparity in the sophistication and bargaining power of the parties. As a result, it may be necessary for eSports players to have experienced legal representation to help them negotiate, review, and draft endorsement agreements to ensure their legal and financial interests are preserved. Therefore, eSports players would greatly benefit from the advice and advocacy of an attorney with experience with endorsement contracts.

Intellectual Property Concerns

The eSports industry heavily depends on video games that are originally marketed to the average video gamer. Video game developers like Blizzard, Square Enix, and Infinity Ward own the intellectual property to their titles.

As copyright holders, developers have the exclusive right to do the following with regard to their video games:

• Reproduction
• Creation of derivate works
• Distribution
• Broadcasting

When gameplay of a copyrighted video game title is broadcasted or streamed during a public eSports event, the producers of the event must obtain specific licenses to do so from the game developer. Teams and individual players may have to receive a license from game developers to stream matches on Twitch or upload them to YouTube. Without an attorney to facilitate a licensing agreement, players and event producers can face a costly infringement lawsuit.

Sports Gambling Implications

The link between sports and gambling isn’t new. However, gambling is an activity that is heavily regulated by governments around the world. The nature and extent of a person’s rights and obligations may differ from jurisdiction to jurisdiction. Because the advent and rise of eSports is relatively new, gaming law issues for the industry may be uncertain. Therefore, eSports enthusiasts can potentially face severe legal problems for eSports activities that may qualify as illegal gambling.

Consult Scaringi Law for Legal Representation

Do you have questions about your legal duties and rights when it comes to business law, such as business contracts and intellectual property rights? If so, you should reach out to one of our experienced attorneys at Scaringi Law.