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07th November 2019

The rise of E-Sports – is governance keeping pace?

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The last decade has seen the swift (and some would say surprising) rise of the E-Sports industry with global revenue increasing to 1 billion dollars in 2019. Media rights, ticket sales and merchandise make up a large chunk of this income, while almost half of it is brought in by sponsorship deals. Many organisations have jumped onto the ever-growing E-Sports bandwagon, with US colleges now offering E-Sport scholarships and establishing E-Sport teams (which can make their universities millions from participating in gaming tournaments). In addition, the IMG Academy, a prominent school for traditional sport athletes, has established an E-Sport training program. Clearly, the world of E-Sports is not disappearing any time soon.

Being an increasingly popular spectator sport, with a huge amount of fans attending gaming events or watching online, E-Sport organisations will be keen to ensure their star players are not tempted to jump ship. Just as in traditional sports, contracts with players will need to take account of a number of key points including whether a player will be tied to a team or competition. Equally, how a player is paid is important and, for example, whether this should be tied to streaming revenue, or prize money won. If playing in a team, how will the prize money be allocated between players? One will also need to address what rights players will have when it comes to entering into sponsorship deals with other brands. However, as crucial as these discussions are, the welfare of players must equally always be a priority, and codes of conducts (just as in traditional sports) may need to be drawn up by organisations to ensure this. Such codes will also assist with policing what players can and cannot post online - with online player presence already huge in the industry, players' social media usage will likely be a key concern for gaming organisations.

Of course, with such fast-paced growth comes the issue of how the industry should (or can) be governed, and how its integrity can be preserved. Where an integrity issue presents itself in most traditional sports, there is an established structure to manage it, and cases can, should the need arise, be taken all the way up to the Court of Arbitration for Sport. Although there is work being done to resolve this, currently no such uniform structure exists in the world of E-sports, which leaves it open to the risk of corruption. This is a particular concern in regard to the betting market and match fixing, with the amount being gambled in E-sports competitions in many cases seriously outweighing the prize money at stake. Although these concerns are being addressed, the industry still has a long way to go before its governance and administration catches up with that of traditional sports.

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