Susan O’Leary, Alderney’s director of eCommerce, says she is concerned by a lack of regulatory oversight for operators offering betting markets on eSports.
The rise of eSports has provided egaming operators with a raft of opportunities. Whether that be sportsbooks offering betting markets on tournaments or online casino affiliates expanding their portfolio with eSports review sites, opportunities are a plenty for those wanting in on the action.
The rapid rate at which eSports has gone from niche interest to global phenomenon with more than 148 million followers around the world leaves those offering betting markets on games and contests somewhat exposed.
The sector has yet to be held accountable against any sort of regulatory and licensing framework. I know some will say there is no need for stringent oversight as eSports has, thus far, escaped any major scandal that suggests the need to disrupt the status quo. That is missing the point; regulation done properly does not impede operators and markets, rather it encourages them to succeed.
The DFS dilemma
Take daily fantasy sports (DFS), for example. The industry was on a similar upward growth trajectory to eSports, with FanDuel and DraftKings offering real-money contests under a perceived loophole in UIGEA 2006. For a while their businesses grew relatively unnoticed, but then their multi-million-dollar ad campaigns brought them into the spotlight and questions started to be asked about whether contests were in fact gambling. Then the DraftKings data leak happened leading to calls of insider trading, and all hell broke loose.
The Alderney Gambling Control Commission (AGCC) takes the view that DFS is, in most cases, sports betting, and that operators offering fantasy contests should be licensed and regulated under our normal regime.
While eSports and DFS undoubtedly have their differences, the former is still at risk of falling victim to its own scandal just like the latter. Already, there have been accusations of match-fixing, while the rise of skin betting – players wager items from the game instead of real cash – are likely to bring added attention and heat from lawmakers as they get a better understanding of the industry and look more closely at how it sits with gambling regulation.
The AGCC does all it can to ensure the industry is accountable and properly regulated. They have been licensing operators from all over the world for the past 15 years, and in the process have tweaked and fettled their regulatory model so that it is best-in-breed. They have focussed on making sure it is nimble and flexible; long before DraftKings and FanDuel ran aground in the US they were licensing other DFS operators under its framework. They can do the same for betting on the eSports industry.
eSports is on the brink of having a larger fan base then the NFL, with more than $8bn expected to be wagered through sports books and skin betting sites this year alone. The sheer scale and scope of the industry means it has to be held accountable, not only to protect players and consumers, but the sector itself.
Susan O’Leary is a lawyer who has represented some of the world’s leading eGambling operators and gambling service providers including many of Alderney’s licensees and has a keen sense of what they require from a jurisdiction: a strong pragmatic regulator who understands the commercial environment, a resilient technical infrastructure, a favourable tax system, excellent support services and a fees system that allows businesses to grow.