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Regulating the runaway train

Regulating the runaway train

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There may be some who think we give too much ‘airtime’ to certain sectors of the industry, but the pace of change is faster than it has ever been, and communicating this constant evolution is both a challenge and a responsibility.

Such is the case with esports, and specifically its growing relevance within the betting space. It is now a few years since one of the founders of Luckbox told me that he believed it was only a matter of time before betting on esports became second only in sports betting terms to betting on football (soccer).

That’s right, he predicted that the global esports betting market would grow to be bigger than basketball, NFL, MLB, horse racing, tennis, cricket, rugby… all of them. At the time, I wondered what he had been smoking, but now I am thinking his claim might not have been so ‘out there’.

$1.5 billion by the end of this year

Esports betting is still a comparatively new phenomenon. Some traditional sports betting operators offer a good service, some are still playing at it without doing its potential enough justice and several newcomer operators are focused on esports, specialists in the games themselves, but possibly lacking in traditional betting expertise and almost certainly lacking in widespread brand awareness and penetration. Either way, this esports betting is now a serious business, growing ridiculously rapidly, with an expected market value of $1.5bn by the end of this year.

Given all of these variables, and the relative ‘youth’ of the core esports audience, the betting sector faces challenges to the successful management of this rapid growth trajectory, not least of which will be its relationship with, and positioning by, the world’s regulators.

The current position

Esports betting is currently covered by existing sports betting legislation, be that land-based or online. The regulatory framework adopted by individual national and regional governments is applied, with the parallel objectives of protecting players, preserving fair competition and raising government revenues. As esports itself grows, and especially if it becomes a leading betting option, it may be that specific areas of regulation will become necessary. The need for such a possibility remains to be seen and the speed of the sector’s evolution will be a factor. How will governments keep pace with constant advances in the technology?

The problem with lack of regulation

When betting providers are able to operate in an unregulated market, the potential for abuse is tempting. Problems such as lack of player security, poor customer service and wider financial mismanagement are inevitable. Those who operate in such a manner are rarely playing a long game, because they know that, sooner or later, the authorities will kill the goose that lays their golden eggs.

Removing the rogues from the market

The most common of the so-called ‘rogue’ betting sites are ‘skin betting’ sites and pop-up ads that appear during esports broadcasts. Skin betting sites allow players to gamble real money by using in-game items that have no value outside the game. Pop-up ads are frequently bogus, asking bettors to provide credit card information. It is the responsibility of everyone involved in the process of delivering the live streams, and even the games themselves, to remove these rogue operators from what is ‘their’ market.

The role of the regulators

Officially regulating this potentially massive market will control these potential issues and make the entire space more appealing to legitimate operators. Effective regulation protects consumers, ensures the entire market functions ethically and smoothly and encourages the expansion that benefits operators and governments alike.

The Esports Integrity Commission (ESIC)

Effective self-regulation is always viewed positively by both regulators and politicians, and ESIC is a non-profit organisation established by the Association of British Bookmakers (ABB) to preserve and promote of the integrity of esports. ESIC is also committed to the prevention of corruption and manipulation in the esports betting industry.

The ABB is a respected UK gambling industry trade association and founder member of the Remote Gaming Council (RGC). The RGC is a self-regulatory body created by the industry to bring integrity to remote gambling and the world’s first industry-led initiative to be recognised by a national government as a self-regulatory body. By putting in place strategies and responsible practices that will assist with the regulation of esports betting, the ABB is already preparing for a future that most of the smart money believes is going to be spectacular.