eSports Law Growth

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Imagine a scene where a group of gamers get together to play their favorite game. They join a tournament, pitted against other equally skilled players, and battle for hours for victory. Now, picture those players sitting in a stadium where their actions are broadcast for thousands to see. At the same time, additional people are logging in online to watch from a distance. Suddenly, those gamers have gone from geek to valuable commodity. This is the phenomenon known as Electronic Sports, or eSports.

A gamer “at work.”
Image credit: Flickr by Shane K.

In the world of eSports, players play computer and gaming system games for profit, while fans watch and even create wagers on who will win. This seemingly innocent phenomenon has grown tremendously in recent years, and now thousands will come to live events where leading teams of gamers go head to head against each other, battling to see who can come out on top. Online viewing of popular tournaments can draw millions of viewers. With this phenomenon, video gaming has become a spectator sport.

The Rise of eSports: A New Field of Law

While interesting in terms of cultural trends, eSports has actually brought some unique concerns from a legal viewpoint. From contracts to endorsements, players, leagues and teams 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.

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. Here are some of the considerations that have come to light through the growth of eSports.

Endorsements and Intellectual Property

For professionals to make money in eSports, they often turn to endorsements. These endorsements usually involve a player’s name, image or likeness. An endorsement contract allows a company/brand to use the player’s image, name, and likeness in connection with the advertising of a certain product/service/brand. Players should pay close attention to endorsement contracts to ensure they are benefiting from them appropriately – for instance, players have to pay close attention to how much and when they get paid, the length of the contract, the countries in which the contract applies (or doesn’t) and exclusivity terms (among other concerns).

Intellectual property is another concern that affects the eSports world. Game play and game content is, legally, the intellectual property of the developer. This can lead to licensing issues when the professional leagues and tournament organizers use the game at a public event. Those who wish to use a game must seek a license from the developer.

This licensing must extend past the overseeing body and to the players, as well. Players who choose to stream their play or create YouTube videos for additional profit need permission from the developer. Some developers have banned players from streaming or creating content from specific games, and players who ignore these rules could end up in legal trouble.

Contract Law

The eSports phenomenon has created a need for better understanding of contract law. Teams, players, tournament leaders and leagues will need to negotiate, draft and sign contracts. Unfortunately, many players and teams in the early days of eSports did not understand or embrace the need for contracts, and as such were taken advantage of by leagues and tournament providers who did not pay them on time or at all. As teams have become more business savvy, the need for legal counsel to help with contracts has grown. Legal professionals with an LL.M. degree can assist with this type of need.

While teams need help with contract negotiations, individual players in some ways are even more vulnerable when presented with a contract. One of the biggest areas where players need assistance in contract law is with endorsement contracts. A player may be quick to sign for an endorsement in order to get some great gear, only to find later that by signing, he or she was promising to not use other products while under contract. These kinds of legalities are not always easy to catch in a multi-page contract document, and legal assistance can protect players from signing away rights in hope of gaining a little bit of benefit.

Legal Betting Concerns

The eSports industry is a favorite 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. This issue is not unique to the U.S. – 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.

Mergers, Acquisitions and Employment

As the eSports industry grows and develops, the issues of mergers, acquisitions and the definition of employment all must be addressed. Professional eSports leagues carry spots that can be sold at a profit by the teams that fill them. Pro league spots are quite valuable, and legally their sale is treated in a similar manner to other tangible property. As a result, sales negotiations and contracts may be necessary for these types of mergers and acquisitions.

The players themselves have to consider their position within the team and leagues. Similar to professional sports players, these players are where the industry is centered, yet they are often at the mercy of the teams with which they play. Players must know what legal means they can take to protect their income and their reputation as a professional as they negotiate with teams and leagues.

Growing Legal Needs Require Well-Rounded Professionals

The growing field of eSports law covers everything from gambling legalities to intellectual property and endorsements. Because of the broad nature of the concerns surrounding eSports law, those interested in practicing in this area will be faced with a rapidly changing field and a unique set of challenges.

If you are interested growing your legal expertise, consider pursuing an advanced degree from the USC Gould School of Law. The online Master of Laws degree can prepare you to work in new and growing industries and stay ahead of important trends. Learn more about USC’s online law degree today.

Recommended Reading:

Resistance is futile: eSports is massive … and growing
7 Legal Issues In The Murky World of eSports Competitions
First esports-dedicated law firm is launched
The Intersection of ESports and the Law
eSports: What Teams and Players Need to Know About Endorsement Deals