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Esports: the publishers’ dilemma

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Publishers of video games don't view esports as a priority when developing games. But should they heed warnings over issues of betting integrity before external agencies decide to get involved?

Publishers of video games don't view esports as a priority when developing games. But should they heed warnings over issues of betting integrity before external agencies decide to get involved?

Scott Longley

To an extent one of the more obvious points of difference within esports between the worldview of the gambling industry and that of the game publishers and developers comes down to a question of perspective.

Viewed from the gambling industry’s end of the telescope, the need for the creative end of the games industry to at least engage with the issue of gambling on esports and work together on integrity issues and other aspects of the relationship between the two is plainly evident.

But that is clearly not the case with the publishers and developers themselves, for whom esports itself is not their number one concern, let alone the betting that takes place on the games and tournaments.

No surprise, then, that the many issues which have arisen within the format around betting integrity and the regulation of gambling get scant attention from some of the leading publishers in the space.

By way of illustration, Activision Blizzard, the publisher of the popular Overwatch game, made just two short references to esports in its fourth-quarter earnings statement in early February.

One was to say it was “accelerating its efforts” in the direction and the other was to mention that its own esports network, Major League Gaming, had extended its viewer reach on social media platforms such as Facebook and Instagram by over 50%.

Getting to know you
And yet. Overwatch is just one game in the esports universe but after the cheating scandal that blew up in Korea in late April, it is a good example of the degree to which the publishers can be blind-sided by events if they don’t engage with the fact of gambling, even if they don’t wish to talk to the gambling operators themselves.

In this instance, the Korean police charged a player-manager and coach with attempting to bribe an opposing outfit to deliberately lose a match in the APEX Overwatch League.

In response to a previous recent scandal involving historical allegations on Valve’s CS:GO, James Watson, head of esports at Betradar, said the publishers should reconsider their current standoffish position.

“The publishers would have everything to gain from being seen to recognise the ecosystem that revolves around their games,” he says.

“They have the opportunity – if they wish to take it up – to engage with leading figures across the eSports spectrum, from legal experts to integrity specialists and develop their own engaged positions.

“I haven’t seen much to suggest that that is their thinking but I remain optimistic that they will adapt their approach.”

At this point it is worth emphasising the diverse nature of the esports ecosystem as it can help explain what can be viewed as a range of responses to the esports phenomenon from many of the leading names in the sector.

This includes the aforementioned Activision Blizzard (which also owns the game Hearthstone), Riot Games with League of Legends and Valve with Dota II and, of course, CS:GO.

Publishers' viewpoint
“Publisher views range from opposition to lack of interest to occasional interest,” says Jas Purewal, partner at video games and esports law firm Purewal and Partners, who suggests that their collective attitude will be determined by factors far beyond the issue of the gambling taking pace on their games.

“The big questions are around brand impact and actual financial impact, particularly bearing in mind the potentially much higher revenues that may come from in-game sales.

The last point is important: if the actual or potential revenue of a game is already extremely high, then the value of the publisher supporting gambling around that game may be significantly less desirable.”

Still, as evidenced by the recent public spat between the publisher of Rocket League, Psyonix, and the esports-only operator Unikrn over the latter launching betting on the game without the publisher giving explicit permission, the relationship between the two parties remains potentially fraught.

Watson at Betradar makes the point that though the publishers are often “no fans of betting… we are not convinced that they have any authority to actually prevent any betting from happening on their games.”

But still, be believes that further attempts at dialogue are needed in order for the publishers to hear not just from the gambling operators but also from the new integrity organisations, like the esports Integrity Coalition (eSIC) and teams and players.

“Integrity scandals do impact on how their games and their brands are perceived by sponsors, tournament organisers, broadcasters, players and fans,” he says.

In effect, it is an issue of ownership that doesn’t so much apply in other sports but which everyone involved will have to deal with sooner rather than later.

“Part of the issue is that these games are proprietary,” says Brett Abarbanel, director of research for the International Gaming Institute at the University of Nevada, Las Vegas.

“That doesn’t happen with traditional sports. FIFA doesn’t own football. Many of the issues of integrity are about game integrity and because many of these developers have such control over their games, there is some role that the developers and publishers are going to have to play.”

“Or they will have to give up control of their game, and I don’t think that is going to happen. It’s their prerogative.”

These thoughts are echoed by Ian Smith, the founder of the aforementioned eSIC, who suggests that the publishers need to acknowledge their leadership role.

“They need to acknowledge that betting on their games exists whether they like it or not and publish clear rules, regulations and guidelines for their players, teams and tournament organisers.”

Moreover, Smith issues a warning for publishers – or tournament organisers and big platform providers – if they don’t control events, someone else will.

“It is a nailed on certainty that, if the esports industry does not address sports-betting integrity issues and a few other common regulatory concerns an external agency will seek to impose something on the industry.”

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