The 2020 pandemic may have brought esports out of the shadows and into our living rooms, but lack of regulation in the esports betting space will hold back the industry’s true potential.
The fault, according to esports experts, lies on regulators, who have been notoriously slow to adapt to changes in their industries.
“The biggest challenge for anybody getting involved in regulating esports is that the industry is constantly changing and evolving,” said Brett Abarbanel, Director of Research at the University of Nevada, speaking at Esports Connect Asia in January.
Unlike traditional sports, things change quickly in the world of esports, meaning that regulators who do not constantly keep up to speed are constantly operating in a knowledge deficit, said Roger Quiles, an esports-dedicated attorney based in the U.S.
“Back in 2015, the esports industry turnover was around three months. So that means every three months, there would be a seismic shift in the esports space that would fundamentally alter how people in the industry would structure their businesses and contracts,” he added.
“If you look at esports organizations that have been around for the last 20 years, even themselves trying to define what esports is, is such a challenge,” added Abarbanel. “The esports industry itself doesn’t make it easy for a newcomer to get involved because it has difficulty even defining itself.”
“I think there is a huge amount of understanding that isn’t present in esports. Because there hasn’t been that kind of exposure to esports as a general trading product.”
One regulator, however, has been particularly nimble in setting up regulations for esports, including the setting up of regulations relating to skin betting, and cryptocurrency several years ago.
“Very early on we ran workshops and got groups together whether that be data centers or CSPs, law firms, to bring them around a table and discuss pain points and what’s to come,” explains Chris Kissack, Head of Esports at Digital Isle of Man.
Ultimately, regulators need to try and immerse themselves as much as possible.
“The esports industry is so fast-moving, and trying to put a pin in something like that can be quite daunting. Ultimately, don’t be afraid to play some games. Whether you’re a consultant or regulator or betting operator trying to bring on new products.”
“Play the games. You don’t need to become a master at anything. As with anything, you need to dive in. Don’t be afraid to catch geek,” said Kissack.