The lead commissioner at the Esports Integrity Coalition (ESIC) says the publicity garnered by the decision to ban two players for match-fixing at a recent Dota 2 tournament has had a “significant impact” as it once again draws attention to the dangers now apparent within esports.
Ian Smith, the integrity commissioner of ESIC, was speaking in the wake of the news of the two-year bans for Leonid Kuzmenko and Dmitri Morozov. They were alleged to have fixed a match at the Uprise Champions Cup tournament held in September.
The publicity over the case will have been beneficial, he suggested.
“Because of the highly confidential nature of a lot of what we do, it makes the task impossible to talk about, at least as much as it is publicly perceived,” he told Esports Betting Report.
“I don’t think players yet understand how increasingly likely it is that they’ll be caught if they try something like this now.”
Specifically in this instance, Kuzmenko and Morozov were found out after rumors surfaced about their behavior in a match at the UCC European qualifiers tournament against a team called Yellow Submarine.
An investigation was undertaken by the esports integrity services team at Sportradar using the esports betting data, which remains the strongest indicator of concerns that need to be followed up and will then usually be cross-referenced against match data.
ESIC is leveraging Sportradar’s multi-year expertise in this area. The company’s fraud detection system has been operating for many years across both traditional sports and esports and has a wide visibility across all the various betting markets.
This includes Asia, where Sportradar provides the only meaningful monitoring system available, but ESIC has as yet a minimal presence.
“Asia will be a major focus for ESIC in 2018,” he says. “In western markets, the chances of getting caught in betting fraud relating to esports markets is pretty high now.”
A work in progress for esports
The task of educating the esports market further remains a work in progress. The tournament organizers are a particular area of focus as ESIC and others continue to try and drive home the importance of integrity and of the concomitant sanctions and banning measures.
“Some do and some don’t understand the importance of this,” suggests Smith. “In my experience, most tournament organizers live at such a pace and in such a hand-to-mouth manner that they don’t have the time or the inclination to really consider these issues.
“Most have mercifully never experienced the reality of a match-fixing allegation or investigation. Most wouldn’t have the first idea of what to do if it happened to them.”
Face-to-face education on esports integrity
To help with the educational effort, ESIC announced earlier this week an anti-corruption online tutorial in collaboration with Sportradar which is being made available to esports players and other participants, including organizers, so that they can build up a “foundational level awareness” of the integrity issues around esports.
Smith says that education is the best deterrent to corrupt behavior.
“Face-to-face education has been very successful across the top end of CS:GO, Dota 2, SC2 and League of Legends, but that only goes so far.”
One area where Smith said he was very pleased with the progress so far was in persuading the esports bookmakers to sign up to the ESIC approach.
“These that have joined the ESIC network each contribute to a ring-fenced education fund that helps ESIC sustain and expand our efforts in that regard.
“We couldn’t do it without the betting operator support. Obviously, the more of them that get engaged with us, the more we can do and the better our alert network will become.”
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Betting and regulatory partners
ESIC’s betting partners include:
It also has agreements with the UK Gambling Commission (UKGC), the Nevada Gaming Control Board and the Malta Gaming Authority.
ESIC recently requested it be included as one of the bodies that shares information with the UKGC’s Sports Betting Intelligence Unit (SBIU). Although ESIC met some criteria, a recent UK government consultation document made it clear that it “appreciates the value ESIC can add” to the esports integrity area. It added that it would encourage the esports community to establish an “overarching esports governing body.”
Smith said ESIC already has an information-sharing agreement with UKGC, signed in May this year. He added that there was now a British Esports Federation, which ESIC supports.
“They have no integrity function, however, so wouldn’t be able to interact with the SBIU in any meaningful way,” he added. “I would hope (and I think this is the case) that the BEF would support ESIC in that role and defer to us on matters of betting fraud and match-fixing.”
A pair of Dota 2 players from team Dx have received two-year bans for alleged match fixing, as a result of their play in an event held in September.
The bans came as a result of an investigation by the Uprise Champions Cup (UCC), the Esports Integrity Coalition (ESIC) and sports data and monitoring company Sportradar.
More on the Dota 2 bans
According to a release from the ESIC, Leonid “Sonic” Kuzmenkov and Dmitri “Ax.Mo” Morozov received bans after their play in the World Cyber Arena (WCA) European Qualifiers for the CIS region. (The UCC organized the event, hence its involvement.)
According to the ESIC, the investigation came “following rumours and concerns” about a Dota 2 match involving the two players against the team Yellow Submarine. Sportradar Integrity Services undertook the investigation, using its data on global patterns on the match.
Further details on the investigation were not made available. However, the ban implies that the ESIC and Sportradar concluded the two players sought to influence the match in some way, for betting purposes.
“It is always depressing to see young esports athletes succumb to the temptations that matchfixing presents,” ESIC Commissioner Ian Smith said in speaking about the decision. “But I remain hopeful that this decision will send a powerful deterrent message to esports athletes across the various titles and tournaments – that ESIC are more than happy to follow up questions and concerns around matches, even when those matches do not fall under our existing coverage partnerships.”
“Sportradar’s fully tailored Fraud Detection System was on hand to help us get to the bottom of the betting patterns globally and off the back of that, we have been able to underline our commitment to clean and credible esports.”
Monitoring is working in esports
Even though the event in question was not necessarily a major one, it shows that monitoring of esports betting patterns should be a deterrent for match fixing moving forward.
The more prizes there are for an esports event, the less tempting it should be, in theory, to attempt to fix a match. Risking a long-term ban for the short-term “reward” of money from a fixed match should increasingly make less sense for even lower-level pros, if they know they’ll get caught.
“We have worked with Ian and his team for a few years now, focusing on prevention and education to help ensure players and their entourages can avoid the pitfalls that fixers put around them,” James Watson, head of esports at Sportradar said in the release. “But sometimes it is our monitoring and detection expertise that is called upon, as it was here.
As a keen and committed member of the esports community, I am grateful that, together with my team at Sportradar and with ESIC, we can work with UCC to send a clear message to fixers and the wider community about how seriously we all take this issue.”
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Not a lifetime ban?
Fixing a match is generally a serious violation in any sport. And in many traditional sports, it could (or likely would) result in a lifetime ban.
But the ESIC and ESL recently came to the conclusion that lifetime bans for activities such as cheating were “inappropriate.” That apparently extends to attempting to fix matches.
It brings up the question if a two-year ban is enough, although second transgressions would likely result in a lifetime ban. Still, being cut out of playing an esport for two years is a huge dent in a player’s career as it is. And being caught should discourage them from ever trying it again, should they return to the competitive scene.
The Esports Integrity Coalition (ESIC) has welcomed the results from its first-ever survey of community attitudes to sanctions for being caught cheating, which showed that the majority of respondents agreed with the organization’s view that lifetime bans for those caught cheating are inappropriate.
Commissioner Ian Smith said he had some sympathy with those who believed in banning competitors caught cheating from ever taking part in tournaments.
But he told Esports Betting Report: “It just happens to be the case that I don’t agree with that and, in light of the survey, neither do the vast majority of the community.”
There was controversy this week in the wake of the news from ESIC after league organiser ESL — a founding member of ESIC — moved to change its line on sanctions in the wake of the survey’s publication.
In particular, this meant that the ex-IBUYPOWER players previously serving indefinite bans dating back to a cheating scandal from August 2015 now had those bans lifted.
In its analysis of the sanctions survey, ESIC explained that it was clear from many comments that there were a “significant number” who felt that the IBUYPOWER ban and other historic match-fixing cases were too harsh.
“While a significant number of comments support lifetime bans for such activity overall, many more are critical of the publisher’s (Valve) decision in these cases.”
ESIC said its reasoning on lifting previous indefinite bans and allowing players to continue with their competitive careers from August 1, was that though the players were clearly culpable, the rules were not clear at the time, no education had been provided and the procedures used were not transparent and “did not comply with the principles of natural justice.”
Ball in Valve’s court
It remains unclear what Valve’s response to the sanctions survey will be. Ulrich Schulze, senior vice-president of product at ESL, said: “All of these adjustments do not apply to bans and punishments issued by Valve directly though, which will still be in place for all Valve-sponsored tournaments run by ESL, such as Majors.”
Smith pointed out the new measures were only “recommendations.” But he does believe that the publishers – and “any other group with competent jurisdiction – should be engaging on with ESIC, the leagues and the teams on these issues.
“Some consensus and consistency is desperately needed across the industry to boost credibility and trust in the system,” he said.
He added he was happy that some clarity had been gained. “I didn’t want to make recommendations in a vacuum or impose my view on the community or the independent ESIC disciplinary panel – I was hoping the community would deliver both consensus and validation and, to a very large extent, they did.”
‘Worrying’ attitude towards match-fixing
One aspect that ESIC and Smith said was of particular concern from the survey was the discrepancy between attitudes of those who took part in the survey who saw match-fixing as a lesser offense compared to cheating to win.
Just under 20 percent of respondents believed a lifetime ban should result from match-fixing at a LAN event. More than 57 percent believed the same for cheating to win using hacks or cheats at the same type of event. Only 20 percent believed a ban for cheating to win should be two years or less. Meanwhile, over 36 percent said the same relatively lenient punishment should stand for match-fixing.
Selected survey results
Cheating to win using hacks/cheats/software – pro/semi-pro player (over 18) – LAN Event
- Lifetime ban 57.14%
- Two years or less 20.54%
- Four years or less 14.68%
Cheating to lose – match-fixing (deliberately underperforming to manipulate the result to commit betting fraud) – pro/semi-pro player (over 18) – LAN Event
- Two years or less 36.25%
- Lifetime ban 21.42%
- One year or less 19.35%
ESIC reiterated that it believes match-fixing to be just as serious and added that it was “committed to engaging with the community to try and persuade them that their current perception ought… to change.”
“We will do our best to inform the community about the very real and serious threat to esports posed by betting fraud and match manipulation,” ESIC added. “It is ESIC’s position that match-fixing offenses should attract at least the same level of punishment as cheating offenses based on the experiences of traditional sports.”
Smith added that he wished there had been more responses from participants outside of the CS:GO community, which accounted over 90 percent of the 7,544 responses. “I would also have liked a wider spread of games, but I think I need to rerun the survey in a few different languages to catch the other communities better,” he said.
Future sanction recommendations
- Cheating: Sanctions to include disqualification from the tournament, results voided, forfeiture of prize money or a ban between two years and lifetime.
- Match-fixing/betting fraud: Sanctions to include results voided, five-year ban (unless there are significant mitigating factors) forfeiture of prize money and monetary fine (if discovered before the end of a tournament, disqualification).
- Doping: Sanctions to include results voided, ban of between one and two years, forfeiture of prize money (if discovered before the end of a tournament, disqualification).
- Competition manipulation and bribery: Sanctions to include results voided, ban of between one and two years, forfeiture of prize money and monetary fine (if discovered before the end of a tournament, disqualification).
The Esports Integrity Coalition (ESIC) has signed a memorandum of understanding (MoU) with the Malta Gaming Authority (MGA). It’s the third such agreement with global gambling authorities since the body was formed this time last year.
Under the terms of the agreement, the Maltese regulator will collaborate with operators which offer esports to provide information on suspicious betting patterns. It will also assist ESIC in investigating any potential insider betting on esports events and competitions.
Among the operators licensed in Malta is leading esports betting brand Betway.
ESIC allied with various jurisdictions
ESIC signed MoUs with the Nevada Gaming Control Board in March and with the UK Gambling Commission in late May.
Joseph Cuschieri, chairman of the MGA, said he was pleased to have signed the agreement with the integrity coalition. “Keeping abuse and crime out of sports betting is high on our agenda and the MGA will always be at the forefront to collaborate in such matters both locally and internationally,” he added.
Ian Smith, ESIC integrity commissioner, said an information-sharing mechanism had already been developed with the MGA. “Adding the experience and vital information of our other partners in the information exchange to the Authority’s intelligence database and vice versa will undoubtedly strengthen all our efforts considerably,” he said.
Smith told EsportsBettingReport.com that each new agreement worked to further aid the fight against those looking to take advantage of the nascent nature of the esports scene.
“With each agreement we paint betting fraudsters and match-fixers further and further into a corner,” he said.
Group highlights esports integrity
Giving an airing to the integrity message remains an important part of the task ahead, suggested Smith. “We continue our player education programme at LAN events and we speak at as many conferences and seminars as we can alongside recruiting more and more members into ESIC.”
One founding member of ESIC is Sportradar. Its head of esports, James Watson, welcomed the news regarding Malta. Watson said it was a another step towards protecting an ecosystem where there were still weaknesses around clarity and hierarchies.
“This kind of fragmented reality does suggest vulnerability to attack and difficulty in bringing about consensus,” he said. “That is why ESIC is so critical. It represents a bold intention to coordinate strategy and action in defence of esports integrity and ultimately reputation.”
Watson pointed out that Sportradar started working with ESIC from its inception and was the first company to provide bet monitoring to ESIC. Sportradar also launched the first of a series of match-fixing workshops to both players and teams at Intel Extreme Masters (IEM) tournament in Katowice, Poland last year.
Increased membership will expand the scope of ESIC
He added that ESIC’s capabilities as a body would only improve as it added “credible and important” stakeholders. One such is the publishers. Smith admitted that particularly when it comes to skin betting, they have a vital role to play to limit the “unfettered” activities of the recent past.
“I do think it’s becoming an issue again, but, to be fair to Valve, it’s a really hard thing to police and take action against. I’m not saying there’s not more they could do, but I think they’re reacting proportionately for now and the pressure’s mounting. It must be very frustrating for them.”
Another gambling regulator to hold discussions with ESIC is the Alderney Gambling Control Commission. Susan O’Leary, the chief executive of the commercial arm Alderney eGambling, said global gambling regulators could act as the policemen in particular areas.
“There needs to be a two-pronged approach,” she said. “The esports industry itself needs to have some kind of independent body to ensure the integrity of games, athletes, sponsorship agreements and so on, just as FIFA and others aim to keep a watching brief over international football.”
“This is not something the Alderney Gambling Control Commission can do, of course. However, they can regulate bookmakers wanting to offer bets on esports – both cash and skin betting – to ensure they are meeting the internationally-recognised gold standards expected of their licensees,” O’Leary remarked.
Esports industry heeded the call for more oversight
She added that this could “go a long way” to stamping out the issue of underage gambling, where esports faces “an uphill battle” because of skin betting.
Watson at Sportradar remains optimistic. He pointed out that bringing the MGA on board – and potentially other regulators globally – “speaks to ESIC’s focus.”
He noted that such moves were in line with various calls from public institutions to strengthen collaborations and information-sharing arrangements.
“Those who love esports should draw comfort from the fact that these stakeholders have heeded that call,” he concluded.
O’Leary from Alderney agreed. “It is important for regulators such as the Alderney Gambling Control Commission and stakeholders in the wider esports industry to work together to understand the challenges the sector presents, and how we can combine forces to ensure consumers remain protected,” she said.
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The Esports Integrity Coalition has issued a position paper on esports cheating. The paper rejects a “one-size-fits-all” approach, arguing that each case must be judged on its merits.
ESIC’s paper is available here.
ESL’s policy has been to impose a two-year competition ban on all players caught cheating.
ESL, which is a member of ESIC, announced that it was standardizing the two-year ban for cheating. But it made no mention of its approach to match fixing:
“This policy of a two year ban was also recently adopted by ESEA, which had previously used only 1 year ban. All of these changes are meant to create consistency for all future bans across all platforms throughout CSGO. So that VAC bans can also be included in this consistent overall framework, we therefore recently updated our competitive rulebook to bring our treatment of them in line with these policies.”
Not surprisingly, a Twitter storm ensued. Players strongly opposed people who had been caught cheating as recently as two years ago being allowed to play in ESL competitions.
From the FaZe Clan, player Karrigan made his displeasure clear:
Apparently its okay to cheat for years at LAN tournaments(only 2 years ban) but 1 matchfixing match is life time ban. Welcome back cheaters
— FaZe karrigan (@karriganCSGO) March 23, 2017
His team mate kioShiMa put his tongue firmly in his cheek in replying:
sup dude, your turn to get into it, get few hundred of thousands $$ and get caught and comeback 2 years later 🤔
— FaZe kioShiMa (@kiocsgoo) March 23, 2017
ESIC more soberly said that ESL’s position “gives rise to a number of serious issues.”
The industry needs a common position on integrity
ESIC says that focusing on any one policy is missing the more important point that “the esports industry is inconsistent and uncoordinated across the board on the issue of cheating.”
In setting out its position as the starting point for a wider dialogue, ESIC wants to begin the process of standardizing the industry’s response to breaches of integrity.
ESIC identifies six broad areas where a common approach is required:
- Reasonable sanctions
In its approach to cheating, ESIC wants a just response that reflects the seriousness of each case:
“We would hope that it is accepted that a 15 year old cheating with a free download aimbot is not guilty of as serious an offence as a seasoned pro winning prize money matches using cheat software and they do not deserve the same punishment.”
ESIC argues that each case must therefore be judged on its own merits. The response should be proportional.
ESIC agrees with the approach used in traditional sports. There, match-fixing is considered to be a more heinous offense than cheating.
Although unstated in the paper, match-fixing is often allied to some form of money-making opportunity, typically involving esports betting.
Match-fixing has the potential to affect many more people than a simple case of cheating. And it would involve much larger sums of money.
On this issue, ESIC defends ESL’s approach:
“Match-fixing, on the other hand, usually results in longer bans – 5 years and upwards even for first offences and, in a number of cases, jail time and criminal records. Consequently, the criticism levelled at ESL in particular in this regard was not fair when viewed against what happens in traditional sports.”
On the issue of consistency, ESIC displays unexpected vehemence. It says that the VAC ban may be consistent but it is not fair. ESIC describes the resulting situation in extremely negative terms:
“It is confusing, inefficient, inherently unfair and will lead to bad outcomes and controversy (as has already happened).”
Even though Valve is an individual company, ESIC argues that a coordinated response is necessary regardless of the differences of opinion within the industry:
“Valve is the obvious vehicle for facilitating this, but the industry stakeholders need to get past their personal biases, entrenched positions and preconceptions.”
There is a strong element of “it’s time to bang heads together to get a solution” in ESIC’s tone and approach. Whether it will work or not is debatable. But it is surely time for the industry to follow ESIC’s advice.
Failure to agree leaves esports companies open to reputational risk, which at this stage of the industry’s development is not just a financial risk, it is an existential risk.
ESIC says that current procedures have serious problems and can appear “arbitrary and inconsistent.”
Although recognizing that the power to resolve problems lies with game developers, ESIC puts itself forward as an independent potential provider of process:
“Realistically, only Valve can force this agenda in CS:GO (and DOTA2), but ESIC is best placed to provide it through the ESIC Programme where we already have clear rules, a clear and fair procedure and an independent disciplinary panel to make fair, unbiased decisions and provide an appeal mechanism.”
The ESIC recognizes the anger expressed by the Twitterati as being an important consideration that wiser heads must not ignore.
ESIC explains that life bans in traditional sports are reserved for the most serious or repeat offenses being seen as “the absolute limit of acceptable and then only for the very worst offences.”
However, ESIC adds:
“Having said that, if the CS:GO community believes that a person who cheats should never play CS:GO again, then that needs to be taken into account.”
Such an approach may sound good to the player community. But in practice, there will inevitably be cases where a life-time ban is clearly an egregious punishment.
The same community which currently demands the harshest punishments will soon be arguing that the rules are despotic.
ESIC advocates for players to have the right to present their defense. They should also be able to appeal a disciplinary decision at least once.
“Anything less undermines the integrity and appeal of esports and makes us, as an industry and community, look unprofessional and immature and undermines any effort to be considered anything other than a fringe activity despite the amazing support, passion, revenue and loyalty we engender.
Moving in the right direction slowly
ESIC is now preparing a questionnaire, with input from Valve. It will provide that to a wide group of stakeholders.
The consultative process is arduous, slow and subject to the caprice of Valve, at least in regards to CS:GO.
Nonetheless this is an essential process if the world of esports is to achieve the same levels of integrity and discipline that have brought traditional sports such respect.
ESIC is a relatively new organization. It is sticking its nose into business which many tournament organizers and game developers consider to be their own proprietary domain.
In other words, it is doing exactly what its founders intended it to do.
MTG describes itself as “an international entertainment group. Our operations span six continents and include TV channels and online platforms, content production and distribution businesses, radio stations, multi-channel networks (MCN) and eSports.”
Esports is in investment mode
For the first six months of 2016, the MTGx business division, which operates the esports vertical, reported a negative operating income of SEK98 million ($11.4 million).
The figure for the whole of 2015 was SEK111 million ($12.9 million), suggesting that MTG is content to take the loss as it builds its market position. The loss in Q1 of 2016 was SEK50 million, and SEK48 million for Q2.
The investment is reported to be achieving “high sales growth” across all of the MTGx businesses. Sales for the full year in 2015 were SEK451 million ($52.4 million) compared to SEK360 million in Q2 of 2016.
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MTG lists several specific achievements for the MTGx businesses:
- Acquisition of leading U.K. esports agency Kuoda
- Launch of a 24/7 esports channel in May 2016
- Establishment of the World Esports Association (WESA)
- Foundation of the Esports Integrity Coalition (ESIC)
- Launch of the DreamHack Masters international tournament
- Entry to the U.S. market with DreamHack Austin
MTG reported that ESL received 108 million online views in Q2, aided by the ESL One events in Frankfurt and Manila. The recent ESL One Cologne event fell in Q3, so did not contribute to the total.
MTG selling some traditional TV broadcasting to focus on digital entertainment
MTG President and CEO Jørgen Madsen Lindemann explained that MTG’s strategy was shifting from traditional broadcasting to focus on a broader concept of digital entertainment. To this end MTG is exiting several businesses:
“We completed the sale of our shareholding in CTC Media in Q2 and have now withdrawn entirely from traditional broadcasting in the CIS region. As part of our ongoing portfolio optimisation, we have also signed an agreement to sell our free-TV and production businesses in Ghana and Tanzania, subject to local regulatory approvals.”
“We are now not only the leading digital entertainment player in most of our markets, but also a global leader in key digital categories such as esports and MCNs.”
As the competitive video gaming industry grows in size and popularity, so too are the number of organizations aimed at promoting integrity, player development, regulatory oversight, and fraud prevention in esports.
At least five bodies have recently launched. Some of them have the backing of tournament organizers, while others have the backing of national governments. Several have expressed the intent to operate globally in scale.
The self-stated goals of these groups range from addressing match-fixing, to developing a player’s bill of rights, to promulgating gameplay rules with the hopes that teams and leagues opt in to them.
What oversight groups exist thus far?
Some of the recently formed esports oversight groups include:
Esports Integrity Coalition (ESIC)
Launched earlier this month, this anti-fraud group has the support of companies like Intel, organizers like Esports League (ESL) and DreamHack, and esports book Unikrn. It will aim to identify and address match-fixing, in-game cheating and doping. Its chairman is yet unnamed, but its integrity commissioner is Sporting Integrity Matters director Ian Smith.
A press release directing users to its website said that in response to a threat assessment survey it carried out in 2015 it’s developed a “Programme for acceptance and implementation,” for tournament organizers, game publishers and bookmakers.
World eSports Association (WeSA)
This player-representation effort launched in May with the support of eight of most well-known esports organizations in the world, but only one league (ESL). WeSA says its player council will, “represent, strengthen and advocate on behalf of pro gamers on a number of important topics, such as league policies, rulesets, player transfers and more.” The group will also attempt to appoint players to an executive board, and develop an arbitration court.
WeSA almost immediately became the subject of scrutiny when one of the founding organizations, FaZe Clan, left the group less than two weeks after it launched, citing concerns over what it called a lack of transparency, a lack of other American organizations in the group, and a lack of receiving a $150,000 fee it says it was owed.
World eSports Council (WeSC)
WeSC launched in late 2015 with aspirations of organizing the investment of more than $1 billion into the infrastructure of eSports, including teams, players, venues and events. Its website says its goal is to form an overarching global governing body, and that its goal is to bring “stability to the eSports industry through organization and regulation.”
It plans to both organize its own esports tournament and develop sets of regulations to govern other tournaments via its own sanctioning committee. Its founder is Robert Kuntz, the CEO of venture capital outfit Sprocket Cafe, who says WeSC found itself in a “unique and strategic position to becoming (sic) the professional esports association for the fastest growing spectator sport in the world.” An outline of the council’s various aims can be found here.
British eSports Association (BEA)
This non-profit agency is chaired by gaming industry veteran Andy Payne. It says it will work to represent player interests at all levels of esports, develop a grassroots competitive video gaming scene in the United Kingdom, and support British professional players.
The association has the backing of a government entity and will report to the UK government’s Department of Culture, Media & Sport. The formation of this group follows that of the erstwhile United Kingdom Esports Association, which launched in 2008 as the “official regulatory body” for British esports, only to file for bankruptcy one year later amid a prize-payout scandal.
France eSports (FES)
This federation launched in April and will advise the French government on how to best regulate esports. An announcement from the French secretary of state said the group would partner with the French National Olympic and Sports Committee for all matters relating to the recognition of electronic sports.
One of the group’s first courses of action was to advocate for the removal of esports from the remit of the national gambling regulator. The group’s president, Matthieu Dallon, the CEO of technology company OXENT, said “I believe the essential point is to get eSports out of gambling regulations, and end up with easy to follow regulations.”
What challenges could these groups face?
Independent coalitions could end up facing different challenges than their government-backed counterparts, who will at least theoretically help influence and implement national esports standards.
While independent groups will likely attempt to do the same, they could be forced to overcome adversity in the form of:
A crowded, contentious space
As Esports Observer notes, professional esports exists across a fragmented climate, with different teams in different sports from different countries each facing different needs. Unlike the four major American sports leagues, where one organization (Boston Basketball Partners, LLC) owns just one team (Boston Celtics) that plays in just one league (NBA) in just one sport (basketball), there is considerable overlap in esports between teams and leagues and games.
All 16 organizations who fielded teams in this past week’s ESL One Cologne tournament, for example, also fielded those same teams in the ELEAGUE, which still has three weeks remaining in its first season. It’s proven difficult for coalitions thus far to get all major organizations across one title to even agree to agree on broad policies and procedures, let alone decide what those policies and procedures are.
Not enough stakeholders involved
According to officials affiliated with various groups who spoke to ESBR on condition of anonymity, non-governmental coalitions could find themselves boxed out of esports governance before they even start governing by virtue of launching before they’ve involved a critical mass of stakeholders.
WeSA, for example, has seven organization members: Fnatic, Natus Vincere, Virtus.Pro, mouzsports, Ninjas in Pyjamas, EnVyUs and G2 Esports. But each of those organizations’ teams compete regularly against other teams who aren’t a part of WeSA, including American organizations Liquid, Cloud9 and FaZe Clan, Nordic organization Astralis, British organization Dignitas, and the group with arguably the world’s best CS:GO team, SK Gaming.
If the association wants to promulgate player-protection standards that it says tournament organizers must adopt, it remains to be seen whether those will apply to all players and teams, or just to the teams who are members of WeSA.
Similarly, it’s unclear if tournament organizers who aren’t affiliated with WeSA (all except ESL) will refuse to recognize WeSA’s policies, rulesets and its arbitration court.
Questionable regulatory authority
The two prior concerns could inhibit the amount of legitimate authority non-governmental groups have to regulate standards and practices in esports.
For example, it’s unclear even if ESL (which backs both ESIC and WeSA) will automatically force players and teams competing in its tournaments to abide by whatever regulations ESIC and WeSA develop.
Even if it does, none of the groups appear to be recognized by any non-member leagues, organizations, players, or teams. It would therefore appear that coalitions lack the power to compel those bodies to act a certain way. Each group launched with the self-stated goals of being the globally recognized authority in their respective missions.
Despite getting to this space before other similar efforts, and despite branding themselves as authorities, that does not mean all stakeholders recognize groups as authorities. Yet.
Educating lawmakers and regulators
As government-affiliated and non-government-affiliated groups work to promote best practices across esports, both could be faced at some point with the task of working with government regulators.
As a recent U.S. Congressional hearing on daily fantasy sports illustrated, stakeholders are often required to significantly educate lawmakers and regulators before successfully engaging with them. BeSA and FES, who are positioned closest to state agencies that could implement integrity procedures, could be forced to distill the needs of a complex industry down to a set of specific policies, as FES has already done with gambling. ESIC and WeSA could be integral in educating policy makers on the broader societal aspects of esports betting.
But developing relationships with lawmakers and effecting actual legislative change takes time. With multiple esports betting scandals already occurring, the time to act to promote transparency could be sooner than later.
How is esports betting connected to preventing fraud?
Much of the fraud in the esports space—including cheating and match-fixing—appears to be driven by unregulated and growing esports gambling markets. Thus, integrity and anti-fraud efforts are likely to address the growing esports gambling space, whose handle Narus Advisors and Eilers & Krejcik Gaming estimates will reach $8 billion in 2016. More than $7.4 billion of that esports betting handle will come from skin betting.
“Esports appears to be facing an alphabet soup problem on the integrity and governance front,” said Ryan Rodenberg, an associate professor of sports law analytics at Florida State University.
“With several acronym-friendly entities now emerging, it is reminiscent of tennis about 10 years ago when the ITF, ATP, and WTA all kept to themselves, before finally putting their differences aside to create a quasi-independent integrity unit after a major gambling scandal.”
Whether or not a set of independent esports coalitions eventually join forces, the groups’ formation is occurring at a time when multiple esports betting websites have admittedly perpetuated varying degrees of misrepresentation and dishonesty.
Last month, betting site CSGODiamonds admitted to giving a sponsored player the outcomes of certain dice rolls in advance, effectively ensuring that player would win skins. That player streamed extensive sessions of his own apparently successful gambling on the site to his followers, making it appear relatively easy to win. Diamonds is a website that allows users to bet skins on the outcome of variable-odds dice rolling.
Earlier this month, a YouTube account brought to light the fact that popular fellow YouTuber Tmartin did not disclose that he owned betting site CSGOLotto while he promoted it and filmed videos of himself winning on it.
It is possible that Tmartin, who also reportedly owns a small stake in WeSA-member EnVyUs, had access to the outcomes of slot-style rolls, or “hashes,” in advance of his betting as a result of owning the site. If that were the case, he would have a significant advantage over other players on the site at winning skins that he could then converted to cash.
Meanwhile, betting site CSGOWild, a coin-flip and roulette style skin betting site, abruptly left the U.S. market in late June, citing the regulatory climate around esports wagering.
How do large prize pools affect match-fixing?
Other recent betting scandals in South Korea and America have implicated players involved in match-fixing. Companies like Genius Sports help detect betting patterns that might constitute suspicious activity surrounding a match, and work with sports leagues to monitor potential match-fixing based off of this data.
“The prize pool of many competitions is dwarfed by the average wagers on any event of the tournament,” Genius Sports’ Head of Esports Moritz Maurer told Narus Advisors earlier this year.
“We see this as very problematic for competitions that have a very small or even no monetary prize pool and the participating teams are often newly formed rosters. The betting volume in comparison with the incentive to win the entire tournament is at a concerning ratio,” Maurer said.
Meanwhile, two lawsuits seeking class-action status have been filed against Valve Corporation, the maker of Counter-Strike: Global Offensive, alleging that the company fosters an illegal gambling market that targets underage gamblers. While these lawsuits likely face significant hurdles, a recent panel of legal experts suggested that these would certainly not be the final lawsuits against esports companies.
Valve has not responded to the allegations against it, but it has taken action against match-fixing in the past. In 2015 it banned seven players from Valve-sponsored events for their role in a match-fixing scandal.
At the time it wrote that, “Professional players, their managers, and teams’ organization staff, should under no circumstances gamble on CS:GO matches, associate with high volume CS:GO gamblers, or deliver information to others that might influence their CS:GO bets.”