Esports: One year on from the start of the pandemic

The quotes below are a selection from the digital speakeasy held on 11 May as part of the ICE 365 Esports content series.

As operators realise the potential of esports betting, money is being poured into facilitating events and providing opportunities to bet. But many operators are still unsure of how best to handle the boom.

“I think everybody is interested, but they’re having a hard time figuring out how to monetise the space,” said one participant. “There is a lot of top line excitement about the space.”

Some companies are still figuring out how to generate basic profit from it.

“In esports, there’s not really a good example in Europe of how anyone’s been able to monetise it in any material way,” the same participant added.

“There are selective examples, and certainly individuals have monetised it. But in terms of a company that’s been able to take advantage of that so far, it’s hard to find that example.”

Esports and the pandemic

It’s important to consider that although esports and esports betting has been rising in popularity for several years, the recent boom has likely been propelled by the effects of the novel coronavirus (Covid-19) pandemic. 

While live sports, and live sports betting, ground to a halt, esports was the choice replacement of many, including lives sports teams and associations.

Leyton Orient, a football club based in London, organised a 128-team FIFA tournament in 2020 while in-person play was suspended. Some clubs were represented by players or staff, while some chose to be represented by professional esports players.

The tournament, won by Wolverhampton Wanderers, raised over £57,000 for charity.

It’s also a bonus that esports is naturally suited to the online world. Clubs and operators can easily stream esports events on sites such as YouTube or Twitch, while streaming live sports events online can be more difficult.

That’s not to say esports was not impacted by lockdowns. A key part of its appeal are the large in-person events, such as the 2020 League of Legends World Championships, which took place in Shanghai to a limited crowd of 6,000 fans in September 2020. One year prior, the event took place in France’s AccorArena to a sold-out audience of over 20,000.

“[The] pandemic hurt esports in a lot of ways, obviously being events focused,” said one attendee. “But to be to be fair, it became one of the only forms of entertainment that was there, so in terms of putting a spotlight on the industry from a wider perspective… the pandemic, ignoring the human cost, has put a lot of focus back in the industry, especially on the brand side.” 

“It was something that brands could do that was different and interesting,” they continued. “I think it became a bit of a catalyst for brands to do things and take it more seriously. I think the industry’s capitalised on that.”

As with every discussion regarding the effects of the pandemic, there were questions as to how esports could continue to grow while recovering in certain areas, such as from the lack of live events.

“It could be merchandise, it could be retail, it could be live events,” suggested one attendee. 

“Clearly live events are extremely successful in some parts of the world, and even in North America on an occasional basis. Obviously, in the last year and a half we haven’t seen much of that.”

Betting, integrity and esports

One participant pointed out that many sports betting bills feature college-aged betting opportunities, like college basketball or football, and questioned whether betting on the outcomes of children is ethical.

“Correct me if I’m wrong, but I know you know you see a lot of college betting bands in these bills, because they feel like they are a susceptible population. I’m wondering with esports, given the age of the participants, if that would be a problem?”

In terms of gambling, some participants seem to think that the concept of children being involved, and the inherent risks with that, has obstructed some potential growth.

“I think there’s like two separate strands here- there’s esports as an esports industry, and then there’s the gambling side,” one participant suggested.

“To speak to the gambling area first, I think it’s a just a huge misconception that the people within the betting industry broadly think: “oh this thing is for kids,” answered another. “It’s not, and it’s not making money like because… people are a bit more traditional like that.” 

The need for regulation

One Ampersand participant noted that regulators know too little about esports to understand the benefits it can provide. As an operator themselves, they provided insight from their perspective.

“I’d say the main question is, have the regulators understood what esports can offer? There’s a lot of ignorance… but as an operator I would say that there is a proper regulation.”

Continuing with the example of the Olympics, esports would need to meet several requirements to be involved in the lineup. For one, it needs a professionally recognised body to outline rules of conduct and prevent match-fixing and cheating. A recognised body, plus outside regulation, is also necessary to ensure safety with both players and bettors. One member of the discussion admitted that this level of regulation could be an arduous process.

“We have a very interesting esports market, and now we have a work in progress to regulate esports like real competitions. There is a big debate about that.”

Betting on the future

As established, in the wake of the pandemic, esports became the game of choice for many. But esports is a diverse offering, with no two games providing the same experience.

“A pandemic hit, suddenly there’s no traditional sports, so people can’t bet on them, but they still have the appetite to bet on something,” noted one member of the discussion. 

“But what do they bet on? They don’t bet on League of Legends, because it’s something quite difficult to understand. And I think that looks right in terms of most esports titles out there. The betting aspect isn’t a big part of it.” 

It’s difficult to imagine how the esports industry can continue to evolve without consistent interest from bettors and operators. It’s unsure whether esports can even maintain its initial pandemic-fuelled boom.  One participant noted that there had already been a fall in momentum since Covid-19 restrictions eased worldwide.

“But now things have kind of normalised to where traditional sports have come back… as you would expect, there’s been a significant dip in the betting of those sports simulator titles.”

This is backed up by data from the Gambling Commission, who reported an esports revenue dip of 25% month-on-month when betting shops reopened in the UK in July 2020.

Although there is clearly a continued interest in esports, the industry may struggle to compete with what live sports has to offer.

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