The esports industry is growing fast, but there needs to be more effective regulation to prevent threats to integrity, a panel of experts at SiGMA Europe said.

Giving a keynote address, Ian Smith, head of the eSports Integrity Commission, outlined some of the key concerns, saying that the “market potential is huge, but there is a considerable amount of danger.”

Addressing threats to integrity will be a major challenge, especially given how fast the market is growing and how quickly it can change.

One of the issues is the fact the games are owned by publishers, who make their money from millions of fans making micro purchases. As a result, their primary focus is catering to the needs of these players and games can change just weeks before a major tournament through ad hoc patches.

Changing the esports goal posts

“It’s like FIFA deciding to make the goal wider, or the pitch narrower just ahead of the World Cup,” he said.

Delving further into the integrity issues, Michelle Hembury, an associate with the Melchers law firm, pointed out that in Germany there is huge demand for betting on esports, but no regulation.

This is pushing players into the black market, which poses huge risks for integrity, she said. At present, it’s not being taken seriously enough.

Antti Koivula, a partner with Legal Gaming Attorneys at Law, said regulation was also poor in Finland, where there is a gambling monopoly. He estimated that about 80 percent of sports bettors were currently gambling offshore where there is no protection.?

“The Finnish regulator does not consider integrity issues to be worthy to address,” he said.?

While all the panelists agreed that more regulation is needed, they also pointed out the difficulties in creating an effective framework for such a global industry.?

“International cooperation and enforcement is key, but that’s very difficult to achieve,” Koivula said.?

Enforcement roadblocks

Viktor Gyorgy Radics, Local Partner, Head of Dispute Resolution at DLA Piper Hungary, pointed out that even in Europe if one regulator imposes sanctions against a sports betting operator there is no effective way of having that enforced in another European jurisdiction.

“If Europe cannot do this, how can we do it globally,” he said.

In the absence of an overarching framework, the panelists argued that greater self-regulation is needed. This includes the need for much more dialogue between the various stakeholders, including the publishers themselves.

They said the publishers have been wary of getting involved and have sought to distance themselves from the gambling aspects of esports. However, if tough regulation is imposed from above, then it will affect their business too.?

14 – 18 November for SiGMA Europe

Being one of the first European countries to regulate the gaming sector, Malta is a hub of global business. With a plethora of prospects for both investors and entrepreneurs looking to shape the future, SiGMA’s Malta Week event will bring together industry giants among the affiliates, operators, and suppliers of the sector.