16.10.16

eSports - Employment, Immigration, IP & Integrity

eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity
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eSports is arguably the fastest developing sporting phenomenon, of our generation, and its popularity is sweeping the globe, at a lightning rate, with a vast fan base and growing betting market. Such popularity creates an opportunity for big brands to become involved in eSports and worldwide travel for the players/teams involved. However, on the other hand, it is also creates the opportunity for games to be undermined by match manipulation and corruption. This blog post attempts to cover the main legal issues affecting eSports gamers today.

But firstly...

What is eSports? 
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity

eSports is the competitive playing of video games, at a professional level, for cash prizes (sums regularly in the millions) either as an individual gamer or as part of a team of gamers. The video games are played as part of a tournament and matches are spectated by a growing fan-base.

The sport was first prominent in South Korea as a spectator sport with fans creating 'Beatlemania' type hysteria over their favourite individual gamers and teams. It didn't take long before the Asian phenomenon made its way to the United States with big league video games such as League of Legends and World of Warcraft.

The viewer ratings of eSports in the United States is staggering. In 2014, 31 million Americans watched eSports with 27 million viewers watching the League of Legends final - compare that to the 14 million viewers who watched the World Series (Baseball) that same week. In 2015, that number rose to 36 million watching the League of Legends final. It's clear to see that eSports is taking over, as a spectator sport, and shows no signs of slowing down.

Fans are able to watch games live, either by attending a tournament and watching first hand (the UK opened its first eSports venue, The Gfinity Arena, in 2016), or they can also stream the events live through streaming site, Twitch. Twitch is a social network for gamers and a live streaming video game platform. Amazon.com was not slow in seeing the growth in eSports and was quick to snap up a commercial opportunity with the purchase of Twitch for $1billion. Other such platforms that stream eSports includes YouTube and now, Twitter too. The UK aired its very first eSports TV channel on Sky in 2016, called Ginx which has seen huge success since it went live.

The Legal Issues

What is the status of a gamer's employment? 
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity
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The employment status of eSports gamers is a topic of much debate and one that has yet to reach any firm conclusions, with a different position depending on which country the gamer originates from.

Some gamers are self-employed whereas others are recruited by a team, as an employee, and given full employee benefits - such as Team Liquid who now has the ability to employ other roles within the eSports sector, as well. Other gamers employee status may be as contractors. This is very much a growing area with different advantages and disadvantages depending on status of employment. Each gamer will have to assess their own individual circumstances when determining status of employment. However, this is an area in which eSports does not differ greatly from traditional sport where some athletes are also neither employed nor contracted.

What is important across the employment sector in eSports is that gamers employee rights are protected adequately and they are not taken advantage of. In 2015, Alexander "Zerogravity" Kokhanovsky, created the very first players' union in a bid to promote player solidarity. In 2013, Kokhanovsky pulled his team out of the Copenhagen games for what he described as a 'disrespectful approach to towards the teams' causing him to feel utmost disappointment in modern eSports'. It is considered that it was this event that led to the creation of the union.

Immigration 
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity

Immigration is arguably one of the biggest hurdles that a gamer faces, depending on where their place of residence is. eSports is a global game with tournaments held worldwide and just like big money football clubs, eSports teams are just as eager to sign the best gamers out there, regardless of where they reside.

Gamers who are looking to join an eSports team in another country, such as the United States where some of the biggest tournaments are held, must seek authority from the US Government to permit them to enter the country and play for an eSports team or play within a tournament. The same applies to the UK and other European countries. Likewise, if a player or team resides in the US and wishes to compete in a tournament in the UK, and enter the country temporarily to do so, they too will require permission, in the form of a visa. We have seen from past cases, that entering a country on a tourist visa to compete in tournaments is not permitted and can land a gamer in a lot of hot water, if he/she chooses to do so. Penalties can include deportation or refusual to re-enter the country at a later date.

Another example of visa issues, arose in the cases of Unicorns of Love, ROCCAT and H2K (three prominent eSports teams), who all have a player who does not qualify for a work permit in Germany where the European League Championship Series, are held. Germany does not currently recognise eSports as a profession and therefore, if the player resides out with the EEA, he/she must obtain a visa or work permit before entry is permitted. Germany's position in relation to eSports is creating a significant obstacle for gamers and teams that reside out with the EEA, which include some of the most prolific gamers in eSports.  This is not the case for those within the EEA who enjoy the freedom of movement of workers throughout the EU, as a result of Art. 45 TFEU, but organisers of league competitions that are held within Germany may have to consider moving them elsewhere to countries that are more eSports friendly. 

On top of that, many of the world's top gamers also find it difficult to compete in US tournaments, billed as some of the best in the world, as a result of US visa issues. The US Government also fails to recognise eSports as a legitimate sport and it's immigration agency appears to 'cherry pick' the games that it considers to be "professional". For instance in 2013, Riot Games managed to get the very first P-1 visa for a gamer following the creation of an official championship series called 'LCS' for the hugely popular video game, League of Legends. Compare this to Sweden's William "Leffen" Hjelte, who is the 3rd ranked Super Smash Bros Melee player in the world. He was deported from the United States following non-approval for a P-1 visa because the US Government does not consider that particular video game to be a legitimate sport. This led to a petition being filed with the White House asking eSports, in its entirety, to be formally recognised as a legitimate sport. So far, it has not been successful.

The US Government responded as follows:

"According to USCIS, the agency responsible for processing P-1 visa applications, there is no current policy categorically precluding an eSport from being recongised as a qualifying athletic competition. In fact USCIS has approved P-1 petitions for atletes seeking to enter the United States to compete in eSport events. It's important to remember that every case, regardless of what sport it involves, is different and is reviewed on its own merits. USCIS may request additional information when there is not enough documentation or evidence to establish eligibility for the requested classification. Given this case by case adjudication, a particular denial or approval does not necessarily represent a broader policy interpretation or change."

What is the position regarding eSports and visas in the UK? 

The recognition of eSports as a legitimate sport and profession has been a step too far, for many governments - the UK included, however that is all beginning to change. Following a government consultation, the British Association for eSports was created in the UK with a goal to develop grassroots players, establish good practice, raise awareness and to provide education, expertise and advice. This is a step in the right direction for eSports to be considered as a legitimate profession, which will ease the burden of applying for work visas, here in the UK. Further, in April 2016, eGames was launched at the London Games Festival and is a venture that is supported by the UK Government. eGames is an international gaming competition where gamers compete for medals instead of prize money. Teams are entered by country, similar to the Olympics. It is hoped that eGames will be adopted by the Olympics as a recognised sport and will feature in future games.

Whilst the UK Government, has yet to release an official statement with regard to recognising eSports, in its entirety, it is considered that there is certainly growing recognition from Westminster. Given that, gamers who wish to enter the UK to compete in a tournament should apply for a Sportsperson Visitor visa. This is a short term work permit that lasts for up to six months and is useful for gamers who are visiting the UK for tournaments or short-term tours, that are necessary to fulfil brand endorsement commitments. 

Despite the fact that eSports is enjoying an incredible boom worldwide, the immigration restraints (described above) show that it is very much a developing sport that continues to lacks awareness out with the gaming and technology community. Many immigration and government officials lack the knowledge in relation to broadcasting, viewer ratings and even the growing commercial revenues that the sport enjoys. Relevant studies have been few and far between but the tide is beginning to turn with the Olympics Committee seriously considering introducing eGames into its line-up of athletic competition. As the wider sporting community's attitude towards eSports continues to develop and change and more and more associations, groups and organisations are formed, it is only a matter of time before government attitudes change also.

eSports teams and individual players should always be aware of the immigration laws of the country they are visiting in plenty of time before travelling. Ignorance to the law is not a defence and cannot be relied upon in the event of any immigration infringements. As described above, entering on tourist visas, for the purposes of eSports, is strictly prohibited and could land you in hot water. 

Brexit Implications for eSports & gamers in the UK
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity
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In relation to the effect of Brexit on eSports, whilst it is very much a guessing game, at this stage, what we do know is that the UK immigration rules will not change for non-EEA nationals. However, the following may occur, in relation to eSports in the UK, when Britain leaves the EU:-

  • The issues experienced regarding visas and work permits will become stricter for EEA citizens (and will remain the same for non-EEA nationals)
  • The UK may become less attractive as a host nation for European tournaments as a result of immigration rules and the lack of freedom of movement for gamers, who fall within the EEA
  • Reduced trade for eSports goods and services as a result of suspending existing trade arrangements with EU member states and other international suppliers. 
  • The UK will not longer be able to benefit from the 'Digital Single Market' which is likely to benefit eSports, throughout Europe, in the future. 

However, it is not all doom and gloom! Brexit may also carry benefits for British eSports for once the UK is free from the economic and legal restraints of the EU, it will be in a position to focus on its strengths as a business friendly state with low tax and a big culture for sports. This could provide a huge opportunity for eSports in the UK to strengthen it's position as a global leader in the recognition of the sport.

I stress that much of the analysis of the effects of Brexit is very much a guessing game. There has been no research on the effects of Brexit on eSports in particular, and therefore we will just have to wait and see how UK eSports develops post-Brexit. 

Intellectual Property - Maximising revenue for individual gamers & teams
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity
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Where there is a growing popularity and rising fan-base, there is an increased opportunity for commercial pursuits with merchandise, sponsorship and brand endorsement. This is an area that gamers need to learn quickly to ensure that they are not being exploited and shortchanged! In all sports, there is a strong focus on intellectual property to form the basis of commercial revenues. In traditional sports, like football, this could be in relation to trademarks such as club crest and club nicknames etc being used on merchandise to form a profit. Further commercial revenues may come from sponsors in the form of the kit, boots and gloves sponsorships. An example of that is Chelsea and their recent £900m kit sponsorship deal with Nike.

eSports is no different, with its growing market and global fanbase. This gives brands such as Red Bull the perfect opportunity for wider brand exposure, possibly to a market they have never had the opportunity to reach before, and in return the gamer or team, receives money and/or equipment in return. The sale of merchandise and other goods, along with sponsorship and brand endorsement, will be a very important revenue stream for individual gamers and teams. Gamers must be aware of the various intellectual property rights that they own, ensure that their rights are registered and that there are no improper use of their rights, such as trademarks. Improper use of trademarks, for instance, could not only lead to them being incorrectly associated with the infringer but also result in loss of important revenue. Given the global nature of eSports, gamers or their representatives need to be thinking globally when it comes to intellectual property opportunities and infringements. 

eSports gamers and teams can own a whole range of intellectual property including crests, badges and logos as well as gamer nicknames which should all be registered as trademarks in order to secure their rights. Indeed, many gamers and teams are easily identifiable, to their fans and the wider eSports community, through their logos and nicknames. This creates their very own brand and encourages other brands to affiliate themselves with the gamer or team. In the event that a brand wishes to use a particular team's logo, on a product, they will have to buy a licence first of all before they are authorised to use it. On top of logos and crests, lots of gamers have dedicated nicknames such as prominent gamers, 'Loomus', 'ppd' and 'UNIVeRsE'. It is likely that such nicknames will be able to be registered as a trademark due to their wide recognition with the gamer or team. The prime example of trademarking a nickname comes from footballer, Cristiano Ronaldo with his brand "CR7". Once the trademark is secured, as above, it can be licensed out to brands wishing to affiliate themselves with the gamer, in return for revenue. The registration of trademarks, like the examples above, will be very important as the games' popularity increases, dedicated eSports stores are introduced and the potential for unofficial merchandise increases. In the event that a trademark is used without authorisation, the gamer can take action and claim damages from the infringer as well as obtaining an injunction to prevent further infringements. 

When determining contracts for sponsorships and brand endorsements, gamers must be very careful in relation to what they agree in contracts. They should be very clear as to what products they are endorsing or what part of the kit the brand is sponsoring. For instance, in an ideal situation, Red Bull may sponsor a team and provide various clothing items in terms of a "cap", "t-shirt" and "hoodie" and Sony may sponsor  and provide the "controller", with LG sponsoring and providing the "headset". This allows for maximum sponsorship opportunities and revenue gains for the gamer or teams. 

However, the use of a general word, such as "clothing", in a sponsorship contract, could limit the scope of any future sponsorship opportunities for the gamer, with other sponsors. For instance, a sponsorship contract may state that Red Bull will sponsor the gamer and provide "clothing", it may not go into detail as to the nature and extent of clothing provided.  The gamer, thereafter, receives a cap with the Red Bull slogan embossed over the front. He receives no other clothing and the contract duration is for two years. Two months later, online betting and gaming site, Dafabet, contacts the gamer and proposes to sponsor him. They state that they will provide a "T-Shirt" and a "hooded top" with the Dafabet slogan over the front of both garments. The gamer naturally wants to take up Dafabet's proposal but Red Bull could legitimately block Dafabet's sponsorship proposal as it falls under the term "clothing" and the contract that Red Bull has agreed with the gamer has yet to expire. As you can see the general wording of the Red Bull contract, thus, potentially prevents the gamer from entering into any other sponsorship opportunities that fall under the category of "clothing", despite the fact that Red Bull is only providing caps. This, thus, limits the gamer's earning potential.

As the eSports fanbase continues to grow, the opportunity for gamers to receive commercial revenues through sponsorship will become greater. It is, therefore, important that gamers recognise their intellectual property rights, understand how to maximise their earnings and are protected from exploitation, at all times. Some of the brands getting a slice of the eSports pie include: Red Bull, Dafabet, Coca-Cola, LG, Steelseries, Nissan, Samsung, Sony, FIFA, Adidas, Intel, Xbox, Blizzard and Mountain Dew ... just to name a few.

Integrity - Betting and Match-fixing already taking a hold
eSports - Legal Issues - Employment - Immigration - Brand Protection - Integrity
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The explosion of eSports globally has naturally created a betting market for the sport and where there is a betting market there is the potential for integrity and corruption issues.

Despite eSports relatively short history, it has already seen a number of match-fixing cases, one of which caused the downfall of it's biggest game, Starcraft. In 2010, eight gamers were sanctioned for manipulating the outcome of Starcraft tournaments. One of those gamers was Ma Jae-Yun, aka Savior (pictured above), the most popular gamer in South Korea, who enjoyed a superstar fanbase, during his peak. This scandal brought an end to the game, Starcraft (although Starcraft 2 was quickly developed in its place), and caused a dramatic drop in eSports ratings in South Korea as viewers lost interest and faith in the sport, as a result of the corruption.

Starcraft 2 was to see further corruption scandal, when 12 gamers were arrested by Korean Law Enforcement in 2015 for alleged match-fixing of, at least, five games. Other instances of match-fixing include the attempted suicide of Korean gamer 'Promise' after he revealed that his team was set up specifically to fix matches and gamer 'Solo' who was banned for one year after he deliberately underperformed during a tournament to win a bet.

e-Sports games can be tampered with in a number of ways including electronic hacks and cheats and doping. You may wonder how a video gamer can use drugs to enhance performance compared to that of a physical athlete. Well drugs, in eSports, tend to take the form of cognitive supplements to keep the mind active for longer, prevent fatigue and generally keep the gamer more alert so they can concentrate on the game. If a gamer is suspected and charged with either match-fixing or doping, sanctions are available just like any other sport. Sanctions usually result in an instant ban for a period of one year to a permanent ban. With the lack of an official recognised governing body for eSports (although associations are in the early stages of development such as the World eSports Association and British eSports Association), the game publisher or league platform, such as the ESL, will usually impose the sanctions on those found guilty of doping or match-fixing.

In 2015, the ESL (one of eSports biggest leagues) developed and created the 'eSports Integrity Coalition'. It was created in response to the increasing risk of betting fraud and includes numerous board members for across the world. It's main responsibilities, for eSports, include disruption prevention, investigation and prosecution of all forms of cheating to include both match-fixing and doping offences as well as providing an education programme for participants to not only be aware of match-fixing and doping risks but also how to handle an approach to become involved in match-fixing. In an attempt to provide regulation and protect the integrity of eSports, the Coaliation has created a number of codes and policies including:

  • Participant Code of Conduct
  • Anti-Corruption Code
  • Anti-Doping Policy
  • Independent Disciplinary Procedures

It is hoped that once the Associations & Coalition reach full development, rules and regulations will be imposed, centrally, to create a tighter regime in the fight to prevent doping and match-fixing in eSports.

IMPORTANT: This post is not intended to be a legal briefing, it is not intended to be a statement of the law and no action should be taken in reliance on it without specific legal advice. 

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