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article imageGrowth of Esports raises legal questions

By Tim Sandle     Oct 17, 2018 in Business
Two Toronto-based lawyers have started Canada’s first law firm dedicated to Esports. Esports are one of the world’s fastest growing industries and it presents several challenges, from streaming rights to contract management.
Esports (sometimes ‘eSports’) are becoming increasingly popular and ever-more lucrative. Esports isn’t simply about playing video games, it is vying with more conventional ‘sports’ to be an organized and international recognized competitive structure with major tournaments and rules-making bodies. As an example, a major tournament, The International took place in Vancouver, Canada in 2018, offering $25 million dollars in prizes and a top prize of $11 million.
Most Esports events are in the form of multiplayer video game competitions. Whereas gaming tournaments are not new these tended to be amateur affairs. In the past few years the rise of the Esports professional has emerged. Large sums of money can be earned by engaging in various competitions involving are real-time strategy, first-person shooter, fighting and multiplayer online battle arena video games. Competitive titles include Fortnite Battle Royale, Counter-Strike: Global Offensive, and Call of Duty.
Big audiences and major sponsors
Esports are not only popular from the participant perspective, they are attracting large audience who follow the action in person or online (via services like Twitch.tv). According to an assessment by Newzoo (reported by ESPN), 427 million people will be watching Esports by 2019. Big audiences are also attracting sponsors: Mercedes-Benz, Gillette and Red Bull to HP and Intel have all carved out sponsorship and partnership deals for Esports events.
High sums of money, a growing number of players and an audience keen to see fair competition mean that Esports cannot remain isolated from the everyday administration and policy matters that affect other sports. This includes matters of a legal nature.
Specialist law practices are needed
While conventional law practice can address some of the issues affecting the burgeoning Esports environment, the growth and complexity of the sport are perhaps signalling the need for specialist law firms. This need for dedicated services is certainly the view of Josh Marcus, who has helped to found Marcus Kubes Management Group’s new law firm and management agency dedicated to Esports. This is the first such specialist practice for Esports in Canada.
Marcus explains, in a statement provided to Digital Journal, how the growing popularity of Esports has created the need for the new venture: “The Esports industry is accelerating at an unprecedented pace. Casual gamers, many of whom are teenagers, can turn into celebrities overnight and find themselves with sponsorships and employment contracts, without a full appreciation of what they’ve signed up for.”
He adds: “We’ve founded MKM to provide clarity and help its clients navigate the complex business and legal landscape inherent in the Esports ecosystem.”
Legal complexities
There are other areas where lawyers will need to start to get involved with Esports, such as: gambling, intellectual property protections (such as ‘what extent does a publisher’s ownership of a game give it legal control over the game’s exploitation as an eSport?’), online streaming rights, and contract management.
As Esports continue to expand, with the drivers of advertising, sponsorship, merchandise, live event revenues, and potentially publisher partnerships, it is likely that other specialist law firms will follow.
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