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IAGR CONFERENCE 2017 eSports : Integrity and Regulatory Challenges The story of Sumail • Sumail “Suma1l” Hassan • Born in Pakistan • Dota 2 player for Evil Geniuses • The International 2015 winners • 3rd highest earning Dota 2 player • 18 years old eSports? You must be joking… • The growth of eSports is unparalleled, fastest growing sport in the world • Revenue of $696 million in 2017, will reach $1 billion by 2020 • Global audience of 385 million, expected to increase to 475 million by 2020 *Newzoo – 2017 Global Esports Market Report eSports is REAL… • Major non-endemic sponsors are becoming involved • Visa, American Express, Audi, Adidas, Coca-Cola, Gillette, Sony, Vodafone etc. • • Sports Teams are investing in MGO’s • Manchester City, AS Roma, Miami Heat, Paris Saint Germain, 76’ers • Investors are queuing up to invest in eSports • Mark Cuban, Alisher Usmanov • Shaquille O’Neal, Alex Rodriguez, Magic Johnson • Sports stadiums are sold out for eSports events • IEM Masters at the Spodek arena in Katowice Poland saw 173 000 fans over 4 days • Tottenham Hotspur currently building a new stadium to include hosting of eSports events Integrity of eSports 1. Cheating to win: • Traditional cheating, but a bit different • Software cheats – External software used to change or modify game mechanics and/or environment • Gives players a competitive advantage - prohibited by the rules and monitored by organizers • Cheat detection software is highly advanced • Being caught cheating results in severe sanctions • Disqualification • Results and prize money forfeited • Up to 5 year bans 2. Online attacks • Denial of service attacks • Tampering with internet connections • Has the affect of disabling an opponent • Difficult to prove • Masking of ISP to prevent attacks 3. Doping • Not the same as conventional sports • Adderall, Ritalin • Use stimulates brain function • WADA approved anti-doping plan 4. Match Fixing • Deliberately losing a match • Direct or indirect betting fraud • Various incidents in eSports • iBuyPower CS:GO • AHQ Korea League of Legends • Starcraft 2 • Fraud Detection Services being implemented 5. Corruption • Betting fraud committed by officials • Bias of seeding groups at tournaments • Referee decisions Regulation of eSports • No regulatory body governing eSports • eSports operates differently to conventional sports • Lack of regulation hampers growth • Increases risk of manipulation and fraud • Sponsors are weary of scandals • Is government regulation the answer? • What about self regulation… ESIC • Established in 2015 • Voluntary member association • Deals with integrity issues such as match fixing, fraud, doping etc. • Members are bound by: • Code of Ethics • Code of Conduct • Anti-Corruption Code • Anti-Doping Code • Disciplinary Procedure The Growth of Betting in eSports • Number of eSports events, and games played, have increased • Prize pools offered at events have increased • The International 2017- $25 million • eSports currently represent a small part of the gambling market • Gambling operators view eSports as an attractive proposition *NARUSCOPE REPORT Betting Regulation in eSports • Regulation of betting in eSports should be no different than conventional gambling • However, the existing regulatory framework must be rigorously applied • The environment surrounding eSports is unique • Regulators need to appreciate the differences between conventional Sport and eSports • eSports enthusiasts: • Generally engage on online platforms more frequently • Are predominantly aged between 16 - 29 Underage Gambling • eSports gambling’s biggest concern at the moment • Regulatory framework provides for existing controls • Licenced gambling operators are required to conduct age verification • Unlicensed operators providing gambling facilities to kids are the problem • FutGalaxy – Successfully prosecuted for providing gambling services to minors Skin Gambling • Gambling of virtual in-game items • “Skins “ are used within the video game • Mostly cosmetic enhancements – avatar, weapons, equipment etc. • Some in-game items are valued as much as $1000 • Became popular in 2013 with CS:GO – increased marketing • Buy, sell, trade “Skins on” Steam platform • Steam (i.e. Valve) doesn’t allow gambling, and limits trade value • Creation of websites to bypass Steam restrictions for high value trading • With increased viewership of eSports, increase in gambling and betting on matches Skin Gambling (2) • Completely unregulated industry • Can trade “Skins” for cash or Bitcoin (cryptocurrency) • With increased viewership of eSports, increase in gambling and betting on matches • Unregulated skin gambling sites accounted for more than 90% of eSports gambling activity in 2016 • In July 2016 Valve (CS:GO game publisher) decided to crack down on skin betting sites • Since then there been a steady decline in the prevalence of skin gambling sites, and skin gambling • Despite preventative measures being taken, unregulated skin gambling continues Loot Boxes / Crates • In-game purchase • Unknown quantity and/or value • Random opportunity to win an in game item • UK Gambling Commission Report • Not gambling - items have no real world value • Get something, not nothing • Is this approach correct… • Is some form of regulation needed? Thank you • [email protected] • 071 350 0159 / 011 728 7728 • Skype : evertdebruyn87 .
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