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Home , Boston Uprising, Item (game terminology), NBA 2K League

A Whole Different Ball Game

BY AARON D. LOVAAS, ESQ.

Boston Uprising, London About Esports Shaquille O’Neal, Joe Montana and the 1 Spitfire, San Francisco Oversimplified, esports is competitive Wilpon family (think New York Mets). play. However, unlike going Clearly, this is serious sports business. Shock, Shanghai Dragons: for the high score on a game like PacMan, If there are any lingering doubts, One might guess these esports involves head-to-head, real-time consider further that the NBA is now the competition, in which players dedicate first of the “big four” sports leagues to were the doomed team themselves to one particular game and venture directly into esports. The NBA monikers of some now- one specific character or avatar, develop 2K League, a joint venture between proficiency in utilizing the skill set the NBA and Take-Two Interactive defunct, professional programmed specifically to that avatar, Software, commenced its first season in indoor soccer league. To assemble teams with complementary skill May 2018, following scouting, a player combine and a full-blown draft at Madison the contrary, these are sets and develop fan bases through online broadcasts of the gaming action. Of course, Square Garden, presided over by NBA four of the 12 franchised, esports is also about money. Commissioner Adam Silver. The NBA city-based teams of the To begin to appreciate the scope 2K League consists of 17 teams, each and popularity of esports today, consider representing and owned by a real- NBA (OWL). the recent launch of the OWL. In 2016, counterpart (e.g. Mavs Gaming: Dallas What is Overwatch? when decided Mavericks; Pistons GT: ; Cavs Legion GC: ).2 Overwatch is a team- to push its wildly popular Overwatch title from amateur tournament status Both the OWL and NBA 2K League based, multiplayer, toward a franchised professional league, award $1 million to their respective first-person shooter it announced a $20 million price tag per champions at season’s end. Both leagues franchise, with 12 city-based franchises (and others in professional esports) set video game published by available. First to the table with checkbook “league minimum” player salaries and Blizzard Entertainment. in hand, securing the franchise, provide the players with relocation, were and The — housing, medical and other benefits.3 In It is also one of the most collectively the owners of the New such a rapidly developing and maturing popular gaming contests England Patriots. The parent companies of landscape, it’s no wonder that the legal in all of esports. What is the Los Angeles Rams, Denver Nuggets issues surrounding esports are rapidly and Philadelphia Flyers also own teams evolving as well. While in no way a esports? Good question. in the OWL. Among partial owners and comprehensive analysis of those issues, investors in OWL teams are the likes of the following highlights some of the more

26 Nevada Lawyer August 2018 prevalent ones, along with some of the the unauthorized streaming and banned certainly emerge as individual states open legal questions in esports today. the streamers from those platforms, the grapple with the decision of whether situation caused a dispute between the to allow sports betting. Esports is not Intellectual game publisher and tournament organizers unaffected. In fact, as of 2017, Nevada is regarding which party had standing to issue the only jurisdiction that specifically allows Property Issues DMCA takedown notices in the first place. wagering on esports.8 Citing to unregulated Video games and sports are rife with After all, the tournament organizers did not black market wagering on esports in most intellectual property issues. In the esports own the images or game play footage they other jurisdictions, the commissioner of world, the video game publisher occupies sought to prevent from being streamed.4 the Esports Integrity Coalition (ESIC) has the top spot in the intellectual property Open then, are questions regarding the recently urged states, in light of Murphy, food chain, but also carries the most at rights, if any, of tournament organizers to look to Nevada as a regulatory model risk if those rights are compromised. 9 regarding the images of game play for esports wagering. As esports and the Because the publisher owns the game, the sports wagering landscape in the U.S. emanating from their own tournaments, publisher also owns the league constructed continue to evolve, the legal issues will no especially vis a vis tournament sponsors around that game. This structure begs the and other parties with whom tournament doubt do the same. question, “what is the sport?” Indeed, the organizers likely have contractual sport is not “video gaming.” The sport, obligations. Anti-Corruption/ specifically, is Overwatch, or NBA 2K, or League Regulation/ of Legends or any Team/Player Issues Enforcement Issues number of other Although esports is a young industry, Finally, the ESIC is attempting to rein esports games there are myriad legal issues involving the in the various esports leagues, games and played professionally. teams and individual players that demand teams, in order to generate some cohesive Players’ skills (and, attention. First, there have been a number regulations and enforcement procedures therefore, their value as players to their of instances, primarily outside of the U.S., within the explosively expanding industry. respective teams and leagues) exist in which minors have been signed to teams, Membership in the ESIC is voluntary, but specifically as applied to that particular only later discovering the disadvantageous more and more participants are aligning 4 video game. So, the publisher owns the nature of their contracts’ terms. These themselves with the organization’s entire environment. situations demonstrate the need for strong regulatory scheme and code of conduct The publisher also owns the rights player representation and advocacy. (www.esportsintegrity.com). A major issue within esports is to broadcast the images of game play and Labor law issues are also emerging, as “e-doping:” the manipulation of the game the images of the characters’ physical at least two separate efforts are underway to grant an unfair advantage to a certain movements, reactions and other behaviors. to organize esports players’ unions 5 player or team. E-doping may take the While the human professional player has or associations. Finally, legal issues form of running surreptitious script within developed superior attention to detail involving amateur vs. professional status and collegiate eligibility will undoubtedly the game code, allowing players to advance and hand/eye coordination within the 10 arise in esports as universities incorporate at an otherwise impossible pace. Other context of his/her chosen game, those e-doping tactics utilize no infiltration of the games into their athletic departments superiorities manifest through depictions the game code at all; for example, a player or extracurricular offerings. Indeed, of the publisher’s character, behaving on a can watch a simultaneous stream of his this process is already well underway: screen and within the game. The question or her own game play in order to obtain a University of Nevada Las Vegas and Boise of whether the professional player has third-party view that gives the player an any rights to the in-game results of his/ State University challenged each other advantage over his or her opponent. The her skilled command of the game controls in the inaugural Mountain West Esports fact that each game in esports, along with 6 appears to be legally untested as yet. Showdown that took place in March 2018; its respective teams and players, exist Third-party broadcasting involves Harrisburg University hosted international entirely separate and apart from any other intellectual property rights as well. varsity esports tryouts in April 2018, creates difficulties when it comes to the One example of this issue cropped up granting full-ride academic scholarships to enforcement of player punishments across at the ESL One Genting 2018 DOTA2 the 16 best players in , game lines. Indeed, a player banned from 7 tournament in Malaysia. Tournament Hearthstone and Overwatch; and the the OWL for e-doping could theoretically organizers provided a free online National Association of Collegiate Esports enter a Hearthstone tournament with broadcast without objection from the game (NACE) was formed to promote and no reciprocal enforcement.4 It is clear publisher. However, when the organizers advance varsity esports at the collegiate that the legal issues surrounding esports discovered that some individuals were also (www.nacesports.org). regulation, integrity and enforcement broadcasting the tournament through their will require ongoing attention as the field own online streaming accounts, they issued Wagering Issues continues to develop. takedown notices, pursuant to the U.S. In light of the U.S. Supreme Court’s Opinions may differ as to whether Digital Millennium Copyright Act, Pub. recent decision in Murphy v. National esports is truly “sports,” or something L. 105-304 (DMCA). While the DMCA Collegiate Athletic Association, legal else entirely, but what is clear is that it is takedown notices effectively terminated issues regarding sports wagering will already big business. The Luxor resort in

August 2018 Nevada Lawyer 27 continued from page 27

Esports ‑ A Whole Different Ball Game

Las Vegas now boasts a 30,000 square foot 4. Wee, Richard, “Three key legal issues 9. Press Release, “ESIC Comment on Esports Arena. Conglomerates are paying currently facing the Esports industry: legalized sports betting in the USA,” $20 million per franchise to field esports A perspective from Asia,” https://www. https://www.lawinsport.com/topics/sports/ lawinsport.com/topics/sports/esports/item/ esports/item, May 15, 2018, viewed May teams. The NBA has an esports alter ego three-key-legal-issues-currently-facing- 18, 2018. of itself. Universities recruit and offer full the-esports-industry-a-perspective-from- 10. Staff article, “Riot Games files suit scholarships to those with strong esports asia?category_id=672, May 16, 2018, against eDoping software LeagueSharp,” skills. Whatever esports is, its growth is viewed May 21, 2018 (internal citations https://theusbport.com/riot-games- undeniable, and its unique legal issues are omitted). files-suit-against-edoping-software- 5. Mullen, Liz, “Two groups vie to establish leaguesharp/12886, Aug. 14, 2016, growing right along with it. esports players associations,” https:// viewed May 21, 2018. www.sportsbusinessdaily.com/Journal/ Issues/2018/03/12/Esports/PAs.aspx, 1. ESPN Staff, “Overwatch League Season March 12, 2018, viewed May 23, 2018. 1 – everything you need to know,” 6. Scavone, Jason, “Basketball, Football, http://www.espn.com/esports/story/_/ Overwatch?” UNLV Magazine, vol. 26, no. id/21331089/everything-need-know- 1, Spring 2018. overwatch-league-season-1-teams-roster- 7. Wolf, Jacob, “Harrisburg University hosts AARON LOVAAS is a calendar-news-recaps, Nov. 17, 2017, international esports tryout,” http://www. business law attorney and updated and viewed May 19, 2018. .com/esports/story/_/id/23340396/ business litigation partner 2. Yeboah, Kofie, “Everything you harrisburg-university-hosts-international- in the Las Vegas office need to know about the ‘NBA 2K’ tryout-esports-scholarships, April 27, of Newmeyer & Dillion, LLP. He League Draft,” https://www.sbnation. 2018, viewed May 21, 2018. represents businesses of all sizes in com/2018/4/4/17190364/nba-2k-league- 8. Press Release, “Governor Sandoval draft-time-teams-prize-money-faq, April 4, Signs 19 Bills Into Law,” http://gov.nv.gov/ nearly all industries, and business 2018, viewed May 21, 2018. News-and-Media/Press/2017/Governor- owners from varied backgrounds and 3. See, n. 1; Nadkarni, Rohan, “Inside the Sandoval-Signs-19-Bills-into-Law/, May all walks of life in both transactional NBA 2K League’s Inaugural Draft,” https:// 28, 2017, viewed May 21, 2018; Leg. and litigation matters. Lovaas has www.si.com/nba/2018/04/05/nba-2k-league- Nev. 2017 SB240; Hon. Brian Sandoval, practiced law in his hometown of Las inaugural-draft-adam-silver-esports, April 5, 2017 State of the State Address, As Vegas since 1995. 2018, viewed May 21, 2018. Prepared for Delivery.

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28 Nevada Lawyer August 2018