Esports Industry, Sportsbooks Still Trying To Get A Grasp Of Integrity Issues, Regulation

Written By Scott Longley on August 29, 2017 - Last Updated on January 22, 2018

[toc]Gambling operators will need to step up their efforts to understand more fully the esports opportunity and grasp the nettle of integrity and regulatory concerns to avoid being left behind by the new betting audience, according to industry experts.

The chief executive of Ladbrokes Australia, Jason Scott, recently appeared on stage at the Gaming, Racing and Wagering Australia conference in Sydney to warn that esports regulation was a “logistical nightmare” and posed an “insurmountable” challenge for regulators.

Responding to these comments, Rahul Sood, chief executive and founder at esports-only betting operator Unikrn, said while he was not “entirely surprised” by what was said, he did feel it betrayed a lack of understanding of where future customers would be coming from.

“I imagine it’s like trying to explain to your grandpa the difference between Facebook and Twitter,” he said. “It feels as if they aren’t prepared for their future customer. It also seems evident both in their response and their product offering.

“In fact, many betting operators are being caught flat-footed and they just don’t know how to cater to this amazing growth opportunity.”

Sood suggested that esports represented no more of a regulatory or integrity challenge than traditional sports such as football, rugby or tennis.

A sympathetic ear for esports integrity

But there was some sympathy for Scott’s position from other quarters.

Notably, Ian Smith, integrity commissioner at the Esports Integrity Coalition (ESIC), said there was “some validity” in what Scott said as from the point of view of operators, there was “no overarching standards of governance or regulation in esports.”

“But that is the operators’ problem, not esports’ problem,” he added. “Esports does not exist for betting, so if operators want to offer markets on esports they have to assume the risk. If operators like Ladbrokes decide it’s too risky, that’s fine — there are plenty of people willing to take their place.”

Intimidation on the part of the operators regarding developments in the esports space is understandable given how recently the form has arrived on the scene.

“Realistically this opinion is probably shared by the senior management of many traditional betting operators, but not all are as forthcoming in their assessment of the industry,” said James Watson, head of esports at data provider Sportradar.

“We can say for certainty that esports doesn’t look or behave similarly to the ‘normal’ sporting world, and that part of this is related to a less formal and regulated structure. However, these are hurdles that can be overcome with a pinch of esports expertise.”

A mission to explain esports integrity

Cheating and resultant bans remain a hot topic in esports circles. At the end of July, ESIC issued the results of its first-ever survey of esports community attitudes to the sanctions being issued when players were caught cheating. It found some sympathy among respondents for the view that lifetime bans were inappropriate.

Watson pointed out that from the perspective of the betting operators, esports does have a “checkered past with regards to match-fixing.” There have been some high-profile cases involving professionals at the top of their game having manipulated fixtures.

“It is Sportradar’s responsibility, by working closely with tournament organizers and independent bodies such as the Esports Integrity Coalition (ESIC) to help monitor and prevent this threat from affecting esports surfacing going forward.”

Smith at ESIC made the point that Scott’s claim that esports integrity represented an impossible task for regulators was erroneous.

“He is wrong about regulating esports betting from a government perspective,” he said. “It is not an ‘insurmountable challenge’ at all. It operates like any other sport from a betting perspective and requires no special regulation.”

He added that esports and the esports betting operators would both benefit from the prospect of the safer betting environment engendered by a properly run integrity program.

“We exist to protect esports against betting fraud, but we do work with good bookmakers to help that along and we are certainly in favour of good regulation and enforcement,” he said. “I talk to bookmakers constantly about this. The best thing they can do, if they want to offer esports safely, is promote ESIC and participant education so the industry is not as vulnerable to corruption as it is right now.”

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Understanding the esports player

However, Watson pointed out that when it comes to the attitude of the esports industry itself, the regulators and the betting operators will need to understand the sensitivities of the participants.

“Full scale educational programs across operators and key executives aren’t likely to be well received given the subject matter. However there is certainly some gradual educational work to be done to bring the industry up to speed,” he said.

“One of the biggest pearls of wisdom I can give to operators and regulators wanting to get involved in the space is to onboard esports natives into their teams. This industry is a notoriously difficult one to grasp, yet alone fully understand and appreciate. Having the internal expertise is not a ‘nice to have’, it really is a ‘should have’ and I would even argue a ‘must have.’ ”

Sood agreed: “I think the biggest thing that would help gambling operators is to hire people who understand the space — people who live, eat, breathe, sleep esports and video games. On top of that they should be open to feedback, and be willing to make changes.

“I’m not at all saying that esports integrity isn’t complex — it is. But one shouldn’t be petrified of it. Instead they should be preparing for it now, and we need to do a better job to help educate the gambling market about esports.”

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