8 Potential Legal Issues in Esports

8 Potential Legal Issues in Esports

A team of esports players sitting at a table competing in an esports competition.

Back when video games first rolled out in homes all over the world, multiplayer gaming was severely limited. With the introduction of the internet and online multiplayer capabilities, people could compete in massive competitions involving dozens or even hundreds of players. As a result of this global competition and interconnectivity, the esports industry was born.

Today, esports is a billion-dollar industry that attracts millions of spectators around the globe. Sports networks like ESPN might have balked at esports two decades ago. However, they are now some of the biggest hubs for esports tournaments.

As esports continues to grow in popularity, we can expect certain legal issues to arise. The following blog discusses some of the biggest legal issues affecting the world of esports today.

1. Gambling Controversies

Gambling is a concern with every sport, and esports are no exception. Developers are required to make sure that micro-transactions don’t allow illegal gambling to take place. All purchases made in-game need to be for in-game currencies and items and not actual money.

Match-fixing has actually become a prevalent issue in esports. Certain organized criminals and others have attempted to influence the outcomes of matches and make a profit.

2. Regulations and Governance

There currently is no central governing body or established industry-standard rules and regulations for esports. Although tournament organizers and developers may have specific rules in place to prevent gambling, cheating, or other types of manipulation, uniform regulations and standards should be established to effectively avoid any issues in these areas.

3. IP Protection

Intellectual property (IP) in esports encompasses content, gameplay, brands, and characters to which the developer and/or artists retain rights, which could include the tattoo on a character’s arm. IP holders can protect their copyrights, patents, and trademarks, provided that they know about, or take action to control, their ownership interests. Users should not infringe upon those rights but may do so unintentionally. A business lawyer or intellectual property attorney can help you discern these rights.

4. Investment Issues

It’s important to engage in smart investing practices when it comes to esports. Whether supporting, creating, selling, or acquiring an esports team, you should understand all of the risks involved with the help of experienced and knowledgeable legal counsel. The more you understand the industry and the various risks that come with investing, the more likely it is that you could avoid investment issues.

5. Visa Issues

Many esports players acquire P-1 immigrant visas that allow them to compete in the U.S. Still, many others are unable to obtain them, mainly because of the highly specific criteria required for P-1s. Unfortunately, U.S. Citizenship and Immigration Services (USCIS) has yet to address this particular issue, even as more players and others in the esports industry have worked to direct the department’s attention toward it.

6. Streaming Rights

As a growing number of online streaming platforms develop and gain viewers, both streaming personalities and esports players will want to make sure that they still have the ability to monetize their brands. It can be tricky to avoid potential intellectual property issues as streamers attempt to improve brand awareness, especially with the threat of takedown notices from the DCMA. A good way to avoid takedown notices is to make sure you have a full understanding of the various laws that impact live-streaming.

7. Contracts

Esport players and teams may see a variety of contracts regarding endorsements, appearances, or services. One way a business lawyer can help you avoid certain contract issues is to identify problematic provisions. These could include terms that would assign the individual IP to the sponsor, or lock them into an employment relationship rather than being an independent contractor. Make sure you clearly understand the terms and conditions of the contracts you sign. If you don’t, such a lack of clarity or understanding could result in problems early or later on.

8. Merchandising and Advertising

Popular esports teams and players alike gain tremendous visibility over time. This popularity often results in a number of endorsements and merchandising opportunities. As and more brands want to sponsor the most popular teams and individual players, certain advertising and endorsement issues can arise due to a lack of transparency. Many sponsors may take advantage of players or teams who aren’t familiar with FTC endorsement guidelines or other aspects. This lack of understanding could result in a host of issues, including forfeiture of monies earned.

How Can We Help?

The aforementioned issues make it important to understand the various elements of business law, contracts, IP, and how they impact the esports industry. Contact the business lawyers at the Law Office of Elliott J. Brown to learn more about these issues and how we can help.

Adam Blaier, Esq.

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