eSports betting could eventually "necessitate some specific regulations"

The British Gambling Commission (‘GC’) has confirmed in its Annual Report and Accounts 2015-16, published on 13 July 2016, that eSports betting will be an area for its continued focus, with the GC highlighting the emergence of real-money betting markets in eSports and the trading of in-game content ‘which blur the lines between gambling and social gaming.’

eSports is competitive video gaming, with large prize pools won in national and international competitions; the global wagering market for eSports is estimated to reach $23 billion by 2020, according to data analysis company Betradar. The GC plans to focus on engaging with key stakeholders and will work wherever it can to ensure the risks posed, particularly to young people, are minimised.

“Only once a comprehensive risk assessment of eSports betting has been undertaken by the GC (and other national regulators) can recommendations properly be made,” said Kevin Carpenter, Consultant at Ramparts and Chairman of the Disciplinary Panel for the eSport Integrity Coalition (‘ESIC’). “The unique nature of the market, in particular skins betting, will in my opinion necessitate some specific regulations, policies or framework to be developed and implemented to protect consumers.”

Betting in-game content, often referred to as skins - virtual items such as outfits or customised weapons - has become commonplace, including amongst young gamers who are under the legal age to gamble. “Along with the integrity of eSports betting, undoubtedly the other major area of concern is in relation to the availability of eSports betting to young eSports players and followers,” said Carpenter. “This is particularly the case once again with skins betting. One could certainly view this as a new element of child protection policies in sport. Yet with no recognised governing body or proper regulation of eSports or eSports betting this would currently have to be done on a voluntary basis or be imposed using existing child protection laws in individual countries/jurisdictions.”

On 19 July 2016, Valve, creator of the popular CS:GO game, took action of its own to shut down illegal skin betting websites by issuing cease and desist letters to 23 websites that allow users to verify their accounts through an OpenID API, which hides a user’s identity and creates bot accounts to access Valve’s online marketplace, Steam, in order to bet anonymously. This action violates the terms of the Steam Subscriber Agreement, which prohibits commercial use of the platform.

Source: eSports betting could eventually "necessitate some specific regulations" | world online gambling law report