Gaming experts call for the creation of an official esports governing body

Ian Smith, commissioner at the Esports Integrity Commission (ESIC) sat down with leaders in the gaming industry to discuss some of the challenges facing esports and esports betting.

“Esports and sports betting are not the same thing. You can’t bet on the Olympics, you bet on individual sports,” he said, “Similarly, in esports, you don’t bet on esports, you bet on one of the 20 or 30 publisher titles that people are playing. And, unlike traditional sports, a publisher of one of these games is allowed to make changes whenever they want. They can even stop you playing. Imagine FIFA coming along and doing that to a group of kids in the park.”

With the onset of Covid, the sector saw a period of explosive growth, with operators and suppliers struggling to find solid footing.

Warren Tristram, head of gaming, lottery and esports at Nuvei, made the case that this growth also led to an increase in manipulation.

“Traditional sports weren’t available so we saw as much as a tenfold increase in the amount of tournaments and betting options online. And fraudsters weren’t on furlough so they had to continue to make a living somewhere.”

Mark Balch, VP of product at Bayes Esports, agreed. “Huge amounts of tournaments would spring up daily. People were desperate for content but that meant that games were going up without rules, without regulation. Suppliers and operators struggled to catch up. The normal procedures went out the window.”

The lack of any kind of official governing body – ESIC is a voluntary organization – can make integrity enforcement more difficult.

Thomas Rosander, CEO of Luckbox, said such a body could make a difference in reducing integrity problems.

“Crime is simple but Esports is extremely complicated. We need a governing body. We need oversight of tournaments and we need an integrity rating for organisers so that quality and safety is assured.”

Tristram identified the onboarding process with payment providers as a key first step in reducing risk, as identity verifcation can make it easier to identify manipulators.

“We need to ensure that there’s good risk management. For operators, it’s not just about fraud, they can also incur fines. You need payment companies who have the right techniques and heritage. You need great address verification software. You need the onboarding process to be thorough and consistent.”

Collaboration across publishers, operators and suppliers is essential, Balch said.

“Data is vital. Esports games change so rapidly that often the data coming through to betting operators is minutes behind. Therefore, it’s pretty easy for someone to manipulate the games and the betting. The reality is that publishers made these games to make money from the games, not to make money from people betting on them. For those who want to run bets you have to have up to the second data and so communication between operators and publishers needs to improve.”

However, he added that the sector being new makes much of this fairly difficult, as many businesses are yet to make major profits.

“Most esports companies don’t make money. Commercialisation of Esports fans is really hard. But the betting world is there and ready. With regulation, we can enable publishers to create products that engage this audience. Those new products will come from data and partnerships.”

Rosander is confident that with regulation and a governing body, the reward will far outweigh the risk and he encourages companies to get involved or risk losing out.