The Gambling Commission made its position clear on the matter in early 2016 when the new chief executive Sarah Harrison took the opportunity in a speech at the ICE Totally Gaming show to suggest the Commission’s approach to esports in general would be the same as it to other sports-betting products.
Regulatory thinking on skin betting in the UK
But what wasn’t clear then – perhaps because the Commission itself had yet to truly clarify its thinking – and would now seem to be the case is that the Commission is coming round to the view that skin betting should perhaps be seen in the same strict manner.
James Cook, corporate affairs officer at the Commission, says the regulatory body is “paying close attention” to the popularity of skin betting.
“If GB-based players are being invited to gamble with money or money’s worth then this requires an operating license,” he says.
“If we suspect unlicensed gambling is taking place, we will write to the operator to inform them that they need a license and will take further action if they do not stop.”
As one legal source with knowledge of the gambling regulatory scene puts it: “A year ago, I’m not even sure the UK Gambling Commission initially even understood what eSport skin betting was about, and certainly wasn’t sure whether it fell within their ambit. Clearly, now they think it does.”
The inevitable intersection of esports betting and regulation
It is easy to see why the Commission should have taken some time to fully understand the mechanics of skin betting and its implications.
As recently as last October Sportradar announced a deal with gaming network ESL which see the company develop a range of integrity products and services. It seemed to mark a point at which worries regarding the integrity of esports took centre stage.
Under the terms of the deal, the company is already deploying its Fraud Detection System (FDS) in order to monitor 450 traditional sports-betting operators, as well as those operators offering skin betting markets across various esports competitions.
The company has already begun rolling out integrity workshops for players, officials and coaches, such as at at the Intel Extreme Masters in March this year, advising them on how to avoid being exploited by outside fixers.
Skin betting long a focus for Sportradar
But James Watson, head of esports at the data provision company, points out that the company’s involvement in the monitoring of skin betting predates that deal and was “jumpstarted” by some high-profile match-fixing cases that occurred prior to the signing of that agreement.
“Skin betting… was of major interest for us from the outset. Although it was something we had never seen before in traditional sports-betting, we quickly recognised its importance to our coverage,” he says.
On top of the ESL deal, Sportradar has also conducted bespoke risk assessments for other stakeholders in the esports ecosystem which, Watson says, detailed the betting coverage, the turnovers and the outlooks for the next 12 months.
The company has also produced a 30,000-word report for one of the game publishers which examined the betting patterns across hundreds of matches in 2015.
Says Watson: “The bottom line is that we have managed to acquire a reputation in the esports ecosystem which means that almost anyone invested in protecting the integrity of the sport or the individual games has already called upon us in order to benefit from our detection, investigation and prevention expertise and services.”
How to locally regulate a global market
Sportradar’s deal with ESL and the other work it does is obviously not confined to the Europe but has a global aim and ultimately it is easy to envisage a need for a global self-regulatory body to oversee issues regarding integrity and corruption in much the same way that traditional sports rely on worldwide federations and associations.
The traditional betting partners will no doubt have a say on this. Harry Lang, head of marketing at Pinnacle, points out that the company has a zero tolerance with regard to corruption issues regardless of whether it is esports or traditional sports.
“Whether it’s doping or fraudulent betting activity: they need to be stamped out in esports and more traditional betting markets for the good of the industry,” he says.
Will traditional books go skin?
Watson from Sportradar believes the recent spate of publicity surrounding integrity and skin betting will have an effect on how the traditional bookmakers view skin betting.
“I don’t think it’s likely we’ll see a traditional operator take the plunge into offering skin betting markets any time soon,” he says. “The potential risks for a bookmaker looking to operate in such a grey market far exceed the benefits as things stand.”
“However, we cannot conclusively say that this won’t change further down the line.”