We have witnessed a rapid growth of the esports industry in the past few years, a phenomenon that has brought forth various legal concerns around online gambling. One of the key legal issues in esports is intellectual property, as game publishers and developers have full control over their games and content. Also, since the esports industry now attracts millions of viewers and punters across the world, sponsors, gamers, punters, and iGaming operators treat it as a commercial venture. That’s why well-defined contracts are necessary to avoid legal issues.
A contract is considered legally enforceable when it incorporates at least these key elements: offer, acceptance, consideration, legality, and intention. In the case of esports betting platforms, particularly sites not on GamStop, the application of these elements is shaped by the digital and competitive nature of gaming.
An offer must be there for a contract to be available, and it's typically made when a betting platform sets out odds or tournament participation terms. Acceptance happens when a user places a bet or a team agrees to compete under those rules.
Consideration involves the exchange of value, such as wagered funds, prize money, or sponsorship payments, while legality ensures that betting activities comply with local gambling laws and regulations. Also, the intention to create legal relations must confirm that all parties involved expect the agreement to be legally binding. The goal is to protect iGaming platforms, players, and tournament organisers.
To ensure that all parties involved understand the terms of the contract, Terms and Conditions clearly outline how the service operates and what users can expect. They form the legal backbone of esports betting platforms, and apply to your access to and use of the websites, emails, and other online products and services provided by that particular esports platform.
They protect esports platforms legally since you must agree upfront that, by accessing or using their Services, you’ll be bound by specific Terms and Conditions, and if you do not agree to those Terms, you may not access or use their services.
For the most part, real money esports gambling is subject to the same rules as traditional sports gambling. Common legal issues such as age verification, unpaid winnings, jurisdiction conflicts, and regulatory compliance.
In many jurisdictions, age and player verification is mandatory for online gaming complexes, casinos, and e-betting enterprises. Underage participation exposes operators to serious legal penalties. Also, unpaid winnings are often linked to unscrupulous betting operations that breach teams and conditions over match outcomes.
Jurisdiction conflicts particularly affect international betting sites that operate outside the UK because the laws there are stricter than in other jurisdictions. So, regulatory compliance may prove to be partially complex as it requires operators to constantly adapt to changing licensing rules, data protection standards, and integrity requirements.
Esports is an interesting industry for attorneys and their clients. Recently, the High Court ruled against Sky Betting & Gaming’s (SBG) targeted marketing after finding that they failed to obtain valid consent under UK data protection laws. They collected the plaintiff’s data without proper consent and used it for unlawful targeted marketing between 2017 and 2019.
Also, the Gambling Commission has raised concerns that the line between gaming and gambling is becoming blurred. It is actively addressing illegal betting, especially around video games and virtual items, to protect vulnerable people.
To level the playing field, there’s a need to have contracts that protect both punters and operators. Operators have contracts with their customers to ensure there’s fairness, clarity, and accountability in betting activities. The way they achieve this is by clearly defining the terms of engagement, with each betting rule, payout structure, and account responsibility explained to avoid any misunderstandings.
The stakeholder is also given their rights and obligations. This ensures there are no risks of disputes over winnings, creating accountability and remedies where legal contract terminations and fines may occur. Regulatory authorities such as the UKGC play a huge role in this, where they protect both operators and punters by ensuring that wagers are handled transparently and securely.
As a player, the law, such as the UK’s Gambling Act 2005, gives players rights such as the guarantee of fair play, access to clear information, and data security. On the other hand, the player has the obligation to adhere to legal age limits and manage finances responsibly. So, in case of breach of contract, then the player is entitled to formal complaints, arbitration, or legal action. These are all meant to help players and operators protect themselves in case of disputes.
International law regarding esports betting is a complex and evolving area, which means gaming regulators have a role to play in shaping enforceable esports betting contracts. To understand international esports regulations, the role of gaming regulators must be well-defined. That’s because they are responsible for the stipulation of licensing requirements.
Also, regulations that govern the industry at the international level often dictate rules on gambling, taxation, and data protection, particularly in Europe, where determining which laws apply can be complex. That’s because events are typically held online or across different countries, and jurisdictions determine the legal framework within which disputes are resolved and contracts are enforced.
Esports legislation is a rapidly evolving field, and to draft clear, legally compliant agreements that withstand legal scrutiny, contracts ought to be clear, detailed, and legally compliant. Legal requirements for esports betting agreements revolve around these requirements. Licensing, age verification, data security, compliance with AML/KYC regulations, responsible gaming, payment processing, advertising and marketing, intellectual property, and taxes. The laws around those legal requirements must be reviewed and updated regularly to minimise disputes and ambiguity.
It's crucial to seek advice from a legal professional or consult the regulatory body in the jurisdiction you are in to minimise risk and foster trust in esports betting. Platform policies and laws change from time to time, and that's why legal literacy is necessary as the industry expands. As an operator, it's important that you obtain a licence from the regulatory body responsible for esports betting in the jurisdiction you intend to operate in. For players, legal literacy is important to ensure that their rights are well safeguarded.
