E-Sports and the Law: A Study in Applied Commercial Law

This discussion considers why e-sport is a commercial law issue with reference to existing sport activities taking place online. It considers e-sport from the perspective of Bilginoglu ( 2017) who suppports the global definition of e-sport as: Competition based, Not based on luck, Risk free and harmless to participants and humans, Not dependent on equipment and single supplier. The article discusses the emerging trend of e-sports, traditional sports and e-sports, law suits and challenges in e-sports, gambling and addictions, guarding against piracy and theft, and promoting safety. The subject is E-Sports and the Law, and the course code, course name, and college/university are not mentioned.

E-Sports and the Law
Discuss the proposition that with the rise of E-sports, Sport and the Law is more than ever a
study in applied commercial law, with any other matters being merely peripheral.

Table of Contents
Introduction......................................................................................................................................3
E-Sport as an emerging trend..........................................................................................................4
Traditional Sports and E-Sports.......................................................................................................6
Law suits and Challenges in E-sports..............................................................................................9
Gambling and Addictions............................................................................................................9
Guarding against piracy and theft..................................................................................................10
Promoting safety........................................................................................................................11
References......................................................................................................................................14

Anonatated Bibliography
1. Besombes, N. (2017, May). Comparison between sports and e-sports through the lens of
the sociology of sports. Research Gate. Retrieved from
http://dfat.gov.au/about-us/publications/Pages/australian-sports-diplomacy-strategy-
2015-18.aspx
Besombes (2017) acknowlegdges that in order to understand the in and outs aspects of e-sports it is
necessary to compare it with normal sports. This brings out the new trends in the virtual gaming
experience. He identifies the distict aspec of electronic sport as one in which competitive games take
place within the electronic ecosystem or network. In the discussion, virtual sports is similar with other
sporting action because of the involvement of motor skills, competition, rules and institutionalization.
Written by a PHD student in the industry, the discussion concludes that there are variations in
regulations and structture of sporting activities but legitimacy is important.
2. Hollist, C. E. (2016). Time to be grown ups about video gaming, the rising esports industry
and the need for regulation. Arizona Law Review, 27, 824-849. Retrieved from
http://arizonalawreview.org/pdf/57-3/57arizlrev823.pdf
Hollist (2016) defines e-sports from a professional point of view indicating that this is an industrry with
teams and players who have a collective bargaininig power with orgainzations. The article emphasises
on the role of teams, prizes, championships and sponsorship leagues. The article also highlighs the
populatity of such games which amounts to millions of fans. It identifies the complication of collective
bargaining and the variations in business models which call for new regulations to govern e-sports. The
internationallization of e-sports further complicates the games creating challenges that redifne
broadcasting, prizing, gaming and professional approaches.
3. Kaburakis, A., & Holden, J. (2017). The future is now: Esports Policy considerations and
potential litigation. Journal of Legal Aspects of Sport, 27, 46-78. Retrieved from
file:///C:/Users/BAT/Downloads/22241-Article%20Text-33314-1-10-20180109.pdf
Kaburakis, Holden, & Rodenberg (2017) analyse the challenges in litigation cases in e-sports and its
implications in the industry. From the study, it is evident that e-sport presents employment and business
opportunities. At the same time the industry present challenges in form of contract law, intellectual
property, corruption and torts. The article brings to light the immense legal issues affecting the industry
and stereotypes in the sport. This business structure presents numerous revenue opportunities such as
advertising and future projections indicate even higher potential. The article makes suggestions for
regulations to define emerging stakeholder issues, and new intepretaions to guide claims and law suits.
4. Ahmad, A., & Rahman, O. K. (2016). Consumer's perception of website service quality: An
Empirical Study. Journal of Internet Commerce, 15(2), 125-141.

Ahmad & Rahman (2016) brings out the role of the consumer in the internet services. According to the
article, service quality is paramount for e-sport and includes cost factors, service perception and
marketing activities. From the article, web services influence the customers and advertisers take
advantage of this to influence consumers trends. The article describes an e-service as an experience
based on quality. It looks at how consumers engae with the website for benefits. This article explains
why the internet services have a business approach to customer service. Through quality web owners
strive to meet customer needs by creating a platform with multiple structures for a great impact.

Introduction
Carr & Stone (2017, p. 101) define Commercial Law as a complex area of practice that
transcends corporate law and business law to cover international commerce. Global business
includes e-commerce, deviations laws, consumer protection, and commercial contracts. As part
of Civil Law, it features trade practices, regulations, taxation and emerging business issues
(Trone, Gamble, & Turner, 2016). The business focus on commercial activities calls to mind
principles of commercial law. Among these is the contracts, breach of contract, competition,
security, trust and modes of payment. Ecommerce presents a new challenge because it brings
about issues of civil law such as contemporary business trends and social lifestyle concerns
(Luiijf, Besseling, & De Graaf, 2013). E-sports as part of online business is an industry on the
rise. The growth of this multimillion-dollar industry leaves a gap for structural systems such as a
legal framework to govern its activities. The need for proper legislation includes privacy, piracy
and anti-fraud laws. This discussion considers why e-sport is a commercial law issue with
reference to existing sport activities taking place online. It considers e-sport from the perspective
of Bilginoglu ( 2017) who suppports the global definition of e-sport as:
 Competition based
 Not based on luck
 Risk free and harmless to participants and humans
 Not dependent on equipment and single supplier
This raises questions about gambling as a legal e-sport and the inclusion of e-sport as a sport
category. This is critical for legal definitions, governance and policy matters arising on e-sport
wars and litigations.

E-Sport as an emerging trend
E-sport varies from racing, ball games, fighting games to smashing games. Consumers
participate in games or bet in gambling. Business organizations are highly motivated to offer a
variety of games with online gaming experiences (Clavio, 2017). E-sport categories also include
multiple player games, single players and strategy games. Player participation in the games is as
important as the gaming structures. Developers create secure games with control units for the
game interface. Owners of the gaming elements are developers with copyrights. Designers own
and may co-own products with other producers for greater impacts. The combination of ideas,
concepts, design elements and game devices is a continuous process. The merger between
software developers and brand names for specialization has led to kingpins in the industry.
Popular games in the industry make millions of shillings from millions of fan around the world.
Management of e-sports on a large scale has come under criticism because of the strategic use of
imitations, ethical considerations and business models. According to the South China Morning
Post, the video gaming industry is as competitive as the pop music festival with multinational
sponsors like Coca Cola and Vodafine making millions in investments (Quinn, 2017). This
explains why Comercial law stands as a guard with contract agreements for such business
relations.

Figure 1: Game developer in China cash in as crowds gather to watch video matches (Quinn,
2017)
With increased e-sport activities comes an increase in commercial activities (Baase, 2012). Co-
ownership structures, integrity and security concerns in the existing structures is an indication of
opportunities and challenges. Governments all over the world are at crossroads on whether to
protect or allow businesses to promote sports events. Managing complex issues calls for a
multifaceted approach to the e-sport industry. As a result, international organizations have come
up to support governments in the quest to streamline the business environment. Creating sanity
in e-sports calls for evidence based research on the underlying issues in the industry. Researchers
highlight the sustainability of the business based on concerns about the long-term survival of the
sport (Hur, Ko, & Claussen, 2012). This brings to light the need to create a mutual existence
between the players and gaming organizations. In some countries, gambling is illegal and the
spread of online sports includes sports gambling activities. These activities involve monetary

transactions and is prone to scandals like fraud, cheating, and match fixing. Traditional sports
law is unable to cater for all gaps in e-sport because of the cross-cultural aspect of the games.
The quagmire of poor legal systems continues to expose the consumer to unscrupulous dealings
in online games. The player is unable to distinguish between a credible site and a fake one.
Consumer Law issues feature in broadcasting platforms where e-sport includes credible sites
from reputable brands like Fox Sports and social links like YouTube. These are ground for legal
suits based on advertising wars and competition laws (Pattenden, 2017). Watching real life
games online provides a lucrative platform for advertisers because of the large number of
spectators. Sports brands, betting companies and gaming developers engage millions in IP links.
Game publishers commercialize their activities gaining legal control over the e-sport. This
creates different business models for hosting sites and game owners. Millions of people take part
in internet leisure activities and sports is a leading source of entertainment. The absence of
formal rules and regulations to guide this commercial activity explains why there are conflicts in
regional, national and international courts on sports governance (Foster, 2012). Internet based
platforms have changed the media landscape as popular TV sports channels invest in online
video arena for a wider consumer platform.
Traditional Sports and E-Sports
The American Bar defines e-sports as playing, watching, and competing in video games (Davies
& Purewal, 2016). It points out that online sporting activities are similar to traditional sports
because it has live games, spectators and sponsors. According to this article, the industry has
high revenue collections as high as $ 325 million with projections for higher income as much as
$1.9 bilion. However, the tournaments, prize pools and gaming competition becomes a source of
conflict with rising disputes featuring in the industry. This brings out the need for governance in

new sports laws, integrity issues, trasparency, gambling law reforms, and universal laws for the
indutry. The creation of new laws may also codify existing laws or come up with hybrid
solutions for the emerging challenges (Suggs, 2015). The competitive e-sport landscape is a
merger between the creative and technology industry for business. This calls for new laws to
govern the business models and overcome litigation challenges. E-sports has a legal perspective
that reveals unlawful practices from the lawful within its own confines. Its freestyle management
system has been instrumental in the spread of gambling as a legal part of the gaming process.
The figure below shows the increasing revenue stream from online videos in Australia.
Figure 2: Revenue streaming for video games (Gibbs, 2017)

Active sport has health benefits that e-sports does not offer. This makes it less attractive and
some parent’s complaint that it is a waste of time. Both young and older people engage in video
game activities. Although professional gamers are earning great money from online games, there
are questions as to whether e-sport is professionally acceptable and healthy. Some e-sport games
promote vices such as deception, killing and destruction. Overexposure to the video games has
an effect on the mental development and it affects the ethical values of a young mind (Cairns,
Yap, Pilkington, & Jorm, 2014). The digital games create a generational disconnect because the
older generation may not enjoy some video games as much as the youth. This is different from
traditional sport, which brought together both the young and old. This has a civil disadvantage
but may also pose a commercial challenge because of the involvement of commercial sponsors.
For example, alcohol brands may want to take advantage of such platforms to lure millions of
immature clients into buying liquor. This has been a cause of disagreement in the legal system.
Similar to traditional sports, e-sports attracts corporate sponsorship in form of sponsorships
(Shank & Lyberger, 2014). Gaming platforms are grounds for partnerships with reputable brands
and niche marketing. Sales is an integral part of commercial activities. E-sport accrues benefits
from different business models influenced by the corporate world. Online players have an
influence in the games but may not be as popular as traditional sports men and women. The
virtual system has a communication process that supports interaction between players in a virtual
manner. However, its influence tends to be greater than the traditional sports because of the
massive influence it has on the global platform. Competition in the online sports is wide and
features competitive matches between players as well as live streaming platforms. This makes it
a bigger platform for business yet it also faces numerous challenges.

Although traditional sport is approved as a co-curriculum activity in the education system, E-
sport is still a new phenomenon used in the classroom learning experience (Bai, Pan, Hirumi, &
Kebritchi, 2012). This presents benefits as well as challenges because learning institutions have
to acquire copyrights issues from developers before accessing such games. Noncompliance leads
to litigation issues with trade dispute issues emerging. Changes in policies designed to access the
benefits of e-sports focus on the social benefits but there are existing challenges on how to
control the risks involved in e-sports.
Law suits and Challenges in E-sports
Gambling and Addictions
Although there are commercial benefits of the video games, allegations of corrupt dealings in the
gaming system are rife. Hattenstone (2017) identifies e-sports as a global game that provides a
virtual experience to fans. Sports is no longer a reserve of the stadium experience because
spectators can gather for a live match on big screen. This hinders physical activity and many
people have become addicts. Gambling companies have also taken advantage of this to influence
young. Online games promote addictive lifestyles such as alcoholism and gambling. For some
people, betting as an economic activity has become a lifestyles for some people. Complaints
about its influence on young people reveals that many spend their precious time gambling at the
expense of productive work (Gainsbury, 2015). Mobile internet makes it worse because
productive people can easily use mobile banking services to squander all their earnings on
gambling. This often goes unnoticed or unmonitored because of the unclear legal provisions
governing the disordered gambling.
Report by the World Health Organizations indicate that gaming addictions are part of mental
health problems (WHO, 2018). Consumer protection laws target millions of people today who

face addiction challenges because of watching live video games or playing computer games.
People who have such addictions will exhibit symptoms such as intensity in the frequency of
playing video games. Such players prioritize and spend too much time on video games. The
interactive online gaming brings in a large audience and advertising opportunities for sponsors
and merchandise. This is subject to abuse because many people engage in it. However, similar to
drug joints, the games involve money scandals hence requires strategy. With millions of fans
globally, law enforcers are devising policies that govern effective video game experiences.
Controlled mechanisms such as micro transactions offer solutions to reduce consumer
exploitation and gambling. However, this encourages players to play more games thereby
stimulating addictions and raising further litigation questions (Kaburakis & Holden, 2017).
Guarding against piracy and theft
Contract and Copyrights Law high profile cases such as the NCAA athletes’ verses EA sports
involve millions of dollars issued as compensation and settlement (Eder, 2013). In this case, the
developers used EA details without consent and ended up paying each player $ 40 million in
settlement. Sports governance has immense challenges today. Endorsement deals have gone sour
and celebrities featured in video games have filed law suits agaings mulimillion dollar
companies for succesful settlements. Risk factors in e-sporting activities include piracy and theft
cases. The use of player information including private data in the gaming exercise raises
questions about the display of data on gaming machines. Such cases have featured in the
Supreme Court and international intellectual property cases (Bilginoglu, 2017).
The violation of privacy pushes game developers to make changes on the type of games with an
aim of incorporating privacy enhancing applications. Privacy and copyrights law suits is a law in
many states include internet interaction but may not fully cover online gaming experiences.

Consumers toady are outraged against the violation of privacy by companies that expose their
personal data. Multinational companies such as Walt Disney are willing to put up a fight against
consumers and digital distribution rights. One consumer Chad Eichbenberger filed a case against
ESPN for data privacy violation leading to changes in policy by the International Association of
Privacy Professionals (Higgins, 2018).
Promoting safety
Cybercrime such as hacking affects everyone online. Accessing e-sport sites is one way to place
a personal computer device at risk. Every now and then, popular sites give warnings of potential
or existing cyber-attacks. The cyberspace is a high-risk zone because of the limited regulations
managing the cyberspace. Gambling regulations revolve around the gaming standards and
conditions. Casino games and the use of corporate logo in advertising presents challenges.
Breach of data is one of the contentious issues in online business. Multinational companies face
off in legal battles involving stolen data and consumer manipulation in competition wars. The
absence of pool betting rules in Australia creates a challenge about the taxation, fee deductions
and licensing under state controlled agencies (Tsukayam, 2013).
Controlled gaming includes prohibitions on casino operators, profits from gaming machines and
restricted monitoring. In Australia, the 2003 Gambling Regulation Act incorporates territory
legislation on gambling. Operator license issues brings out the role of clubs and group licenses
for associations. Commercial services offering raffles face complaints about maximum fee (Law
Reviews, 2017). The e-sport disputes become civil cases when there are general issues involved
and these may be resolved through organizations such as the Australian Competition and
Consumer Commission and the Australian Competition Tribunal.

Secure banking is another legal tussle that requires an improved technology in the global sports
industry. Money transactions in competition and betting. The culture of sports excellence
covered under Australian strategic sporting plan displays regional sports governance. This
strategy encourages sports integrity and innovation. E-commerce is a success across the globe
but it faces challenges of secure online transactions (Ahmad & Rahman, 2016). Employees in the
industry also have duties and functions. Infringement on individual rights and customers rights is
a reason for numerous court battles in the industry. Streamlining standards ensures that there is
quality in the gaming machines and there is need for license renewal. E-sport service providers
should be clear about the difference between charitable give always and commercialized gaming
(Healey, 2012).
Conclusion
The similarity between traditional sport and e-sport raises questions about the best modes of
governance for the emerging online industry. Although internet sport is gaining in popularity, it
shows gaps in terms of its clear classification and sports governance. Disputes arising from e-
sports feature commercial law problems such as copyrights, privacy laws, consumer protection,
taxation, and contracts issues. This explains why some researchers consider it as a business
oriented industry than a leisure activity. Betting as an integral element in e-sports brings out gaps
in the definition of e-sports as a sporting action. E-commerce is a multibillion-dollar hub and e-
sporting activities are a crucial part of this system. As an international activity, it brings together
individuals and groups from all over the world. The virtual gaming experience is also an
advertiser’s haven and companies continue to cash in on it.
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